IMF urges El Salvador to remove bitcoin as legal tender

IMF urges El Salvador to remove bitcoin as legal tender
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Updated 26 January 2022

IMF urges El Salvador to remove bitcoin as legal tender

IMF urges El Salvador to remove bitcoin as legal tender
  • Bitcoin shot up in value in 2021 as Wall Street showed a growing appetite for cryptocurrency

he IMF on Tuesday called on El Salvador to change course and stop using bitcoin as legal tender, citing "large risks" posed by the cryptocurrency.


The small Central American nation in September became the first country in the world to embrace the digital money, allowing consumers to use it in all transactions, alongside the US dollar.


The call by the Washington-based crisis lender came as the cryptocurrency dropped in value amid wider volatility on Wall Street in recent days, undoing much of the gains it had made during a record-setting climb in value last year.


The IMF staff had previously called on El Salvador's President Nayib Bukele to reconsider putting bitcoin at the center of his country's finances.


The latest pronouncement used much stronger language and came from the IMF's board, which is comprised of representatives of member governments including the United States.


The board's directors "urged the authorities to narrow the scope of the bitcoin law by removing bitcoin's legal tender status," according to a statement.


They "stressed that there are large risks associated with the use of bitcoin on financial stability, financial integrity and consumer protection" and with issuing bitcoin-backed bonds.


Bitcoin was trading at about $37,000 on Tuesday, having lost about half its value compared to the record of $67,734 hit in November.

Bitcoin shot up in value in 2021 as Wall Street showed a growing appetite for cryptocurrency, while Tesla boss Elon Musk's controversial tweets about the digital assets helped the market rise and fall alike.


The trend was not lost on Bukele, who was elected in 2019 with promises to fight organized crime and improve security in his violence-wracked country.


His move last September to legalize bitcoin in El Salvador drew worldwide attention and sparked protests on the streets of the capital San Salvador that were also over his administration's judicial reforms, which critics said threaten democracy.


Thousands took to the streets carrying signs reading "No to bitcoin" and at one point burning one of the bitcoin ATMS that had been installed nationwide.


They didn't appear to deter Bukele, who announced in November plans to build the world's first "Bitcoin City," powered by a volcano and financed by $1 billion cryptocurrency bonds.


His administration had also taken advantage of price drops to buy the digital asset for the country.

The IMF was wary of the cryptocurrency's adoption from the start, with spokesman Gerry Rice saying before Bukele made the move official, "Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis."


In Tuesday's statement from the board, they noted the fund supports the aim of "boosting financial inclusion" which could be advanced using the country's "Chivo" e-wallet, but warned about the high levels of volatility in the cryptocurrency's exchange rate.


Bitcoin's value has shown some correlation with Wall Street equities, but pressure has also come from China's crackdown on the trading and mining of cryptocurrencies, and also the risk of wider regulatory action from the likes of Europe and the United States.


Analysts also say it faces increased competition in 2022 from rival digital assets like ethereum.


Lucid Motors to establish its first overseas factory in Saudi Arabia

Lucid Motors to establish its first overseas factory in Saudi Arabia
Updated 11 min 27 sec ago

Lucid Motors to establish its first overseas factory in Saudi Arabia

Lucid Motors to establish its first overseas factory in Saudi Arabia

JEDDAH: US-based Lucid Motors has signed agreements on Wednesday to build a production factory in Saudi Arabia with an annual capacity of 155,000 zero-emission electric vehicles.

The deals are estimated to provide financing and incentives to Lucid up to $3.4 billion in total over the next 15 years to build and operate the manufacturing facility in the Kingdom.

To be located in King Abdullah Economic City, AMP-2 is the electric vehicle manufacturer’s first production facility outside the US, according to a statement. 

The project is expected to create over 4,500 jobs in KAEC, said Cyril Piaia, CEO of Emaar The Economic City, master developer of KAEC. 

Saudi government and Lucid Motor’s officials at a ceremony to sign agreements for the development of a production facility in the Kingdom. AN photo

“Attracting a global leader in electric vehicles such as Lucid to open its first international manufacturing plant in Saudi Arabia reflects our commitment to creating long-term economic value in a sustainable, enduring, and globally integrated way,” Saudi Investment Minister Khalid Al-Falih said. 

“This project demonstrates the confidence investors have in Saudi Arabia’s competitiveness, its ability to create opportunity, and serve global demand for a highly complex product such as electric vehicles,” Al-Falih added. 

The agreements were signed between the Saudi Investment Ministry, the Saudi Industrial Development Fund, Emaar, The Economic City, at King Abdullah Economic City and the Gulf International Bank.


Investing in Metaverse is a waste of time: Futurist-in-Chief at Dubai Future Foundation

Investing in Metaverse is a waste of time: Futurist-in-Chief at Dubai Future Foundation
Updated 18 May 2022

Investing in Metaverse is a waste of time: Futurist-in-Chief at Dubai Future Foundation

Investing in Metaverse is a waste of time: Futurist-in-Chief at Dubai Future Foundation

DUBAI: As the business world is increasingly fascinated by the Metaverse, Noah Raford, futurist-in-chief and chief of Global Affairs at Dubai Future Foundation, claimed that investing in this advanced technology is just a waste of time. 

While speaking at the Top CEO Forum, Raford argued that people should invest in video games, as it is the only successful digital economy so far. 

However, Fady Kassatly, partner of Enterprise Solutions and Cloud, KPMG, said the Metaverse is nothing but the next evolution, which will make people live differently. 

He also added the Metaverse is going to evolve quickly in different directions, and this is just the beginning of the journey. 

On his part, Philippe Blanchard, founder of Futurous, stated the Metaverse will change the relationship between humans and nature. 

Predicting an inevitable Metaverse future, Valerie Hawley, Director of Sorbonne Center for Artificial Intelligence, said every business will look at the Metaverse space and consider using it in the coming years. 

She also added the Metaverse is a projection of the world that humans would like to live in. 


Blockchain creating ‘Internet of value’: Crypto Oasis co-founder

Blockchain creating ‘Internet of value’: Crypto Oasis co-founder
Updated 18 May 2022

Blockchain creating ‘Internet of value’: Crypto Oasis co-founder

Blockchain creating ‘Internet of value’: Crypto Oasis co-founder

DUBAI: Blockchain technology is transforming “internet of information into internet of value,” according to Saqr Mashhor Ereiqat, the co-founder of Crypto Oasis. 

While speaking at a session in the Top CEO Forum, Ereiqat also noted that the majority of the people use the Internet, but do not know how it works.

Ereiqat added that he used to advise governments on how they can use blockchain to benefit them. He, however, made it clear that governments like to control the network they offer.  

Ereiqat also noted that blockchain provides a way to trace a value from beginning to end. 

Franck Mandon, chief operating officer of Nujumz, during the session told that blockchain is going to transform the way humans trusted each other. 

However, Paritosh Ghambir, partner audit KPMG, noted that most clients need education about blockchain. 

Gambhir added: “Just because it is a blockchain does not mean it could be fully trusted.” 


China In-Focus: Goldman Sachs revised China’s GDP downwards to 4% amid COVID-19 control 

China In-Focus: Goldman Sachs revised China’s GDP downwards to 4% amid COVID-19 control 
Updated 18 May 2022

China In-Focus: Goldman Sachs revised China’s GDP downwards to 4% amid COVID-19 control 

China In-Focus: Goldman Sachs revised China’s GDP downwards to 4% amid COVID-19 control 

RIYADH: Tight Covid-19 controls are seen exacerbating China’s economic stance. America’s Goldman Sachs revised the Asian country’s gross domestic product downwards to 4 percent. The country’s stocks also fell on Wednesday due to the lockdown consequences. On top of this, several factories and plans are expected to leave the country in light of rising labor costs, worsening trade tensions with the US, and Covid-19 impacts. Meanwhile, some buyers are eyeing liquified natural gas demand rebound as covid-19 is expected to unwind soon.

·      American multinational investment bank and financial services company Goldman Sachs Group Inc. has revised China’s GDP downwards to 4 percent, down from 4.5 percent previously, Bloomberg reported, citing economic data from April. In addition to this, the investment banking company also cut forecasts for the second quarter to 1.5 percent year-on-year, down from 4 percent originally. 

·      China’s stocks dropped on Wednesday amid fears that government stimulus and policies will not be enough to help the economy recover from COVID-19 repercussions. This comes as China’s blue-chip index, also referred to as CSI300, lost 0.4 percent while the Shanghai Composite Index lost 0.3 percent.

·      Several factories and plants might leave China amid rallying labor costs, exacerbated US-China trade tensions, and tight Covid-related controls, CNBC reported, citing multiple firms and analysts. However, the issue that prevails is that supply chain diversification is difficult to implement, CNBC reported, citing Nick Marro, global trade leader at The Economist Intelligence Unit.

·      Some Chinese buyers are contemplating the purchase of LNG cargoes from August onwards on the hopes that virus restrictions will ease thus raising demand for the fuel once again in the process, Bloomberg reported. Nevertheless, spot prices will still have to further drop before any deals are sealed. 

 


MBC-backed Al Arabia more than doubles profit to $17m on strong client base

MBC-backed Al Arabia more than doubles profit to $17m on strong client base
Updated 18 May 2022

MBC-backed Al Arabia more than doubles profit to $17m on strong client base

MBC-backed Al Arabia more than doubles profit to $17m on strong client base

RIYADH: Outdoor advertising provider Arabian Contracting Services Co., known as Al Arabia, has more than doubled its profits during the first quarter.

Profits of the Riyadh-based firm, partly owned by media giant MBC group, soared to SR64.9 million ($17.3 million) in the first quarter from SR29.6 million during the same period last year, a bourse filing revealed.

Economic recovery, along with a continued digitization push in the Kingdom, led to a 93 percent increase in revenues year-on-year to SR287 million.

Al Arabia said that digital transformation led to an expansion in its client base in the current year to include new sectors, which in turn propelled solid first-quarter figures.