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While the authorities in major economies are taking a cautious approach to cryptocurrencies, the developing world is showing much greater acceptance of the value of digital tokens, in every sense.
Charles Randell cited celebrity influencer Kim Kardashian, who was recently paid to ask her 250m Instagram followers to speculate on crypto tokens by “joining the ethereum Max Community”, a digital token created only a month before by unknown developers.
“Of course, I can’t say whether this particular token is a scam,” he said. “But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all.”
His comments come as the UK Treasury considers a proposal to give the FCA a larger role in controlling the promotion of crypto assets, under tougher standards than those currently applying to marketing traditional financial products. The speech echoes calls from Gary Gensler, chair of the US Securities and Exchange Commission, for Congress to give his agency more powers to protect investors in “Wild West” cryptocurrency markets that he said were “rife with fraud, scams and abuse”.
However, today’s Big Read looks at how crypto is advancing in the developing world, especially in countries with a history of financial instability or where the barriers to accessing traditional financial products such as bank accounts are high.
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Data company Chainalysis ranks Vietnam first for crypto adoption worldwide — one of 19 emerging and frontier markets in its top 20, with only the US among advanced economies making an appearance at number eight in 2021. Separate data from UsefulTulips.org, tracking bitcoin transactions on the world’s two biggest peer-to-peer crypto trading platforms, show that in the past few weeks, sub-Saharan Africa has overtaken North America to become the geographical region with the highest volume of this kind of crypto activity.
Tomorrow, the small central American nation of El Salvador — population 6.4m — becomes the first in the world to make bitcoin legal tender, meaning merchants from car dealers to coffee shops will be obliged to accept it as payment. The project faces the scepticism of the IMF and others in the West, but countries with weaker currencies and banking systems will view this as groundbreaking.
The Internet of (Five) Things
1. Didi rival gets state cash
Chinese state-owned funds are piling into a fast-growing rival to Didi Chuxing, taking advantage of regulatory pressure on the country’s largest ride-hailing app. Cao Cao Mobility announced on Monday that it raised Rmb3.8bn ($588m) from a group of state-owned funds based in the eastern city of Suzhou, to accelerate its expansion and improve driver safety.
2. China stunts next-gen gamers
Analysts fear tough new restrictions on minors playing video games in China will hit the long-term prospects of Tencent and NetEase, as their supply of future gamers will be constricted. China’s children are not the only ones addicted to video games, argues Camilla Cavendish. All of us should worry about the control gaming and social media companies exert
3. Amazon’s roll-up merchants
A handful of ecommerce “aggregators”, led by Massachusetts-based Thrasio, raised $1bn by the end of 2020 to buy up the most successful independent merchants on Amazon’s marketplace. Nine months later, dozens of lookalike Amazon “roll-up” businesses have now raised more than $8bn to date between them, reports Tim Bradshaw.
4. How chipmakers will cope with Covid
The global semiconductor industry needs to adjust its operations and supply chains to a world where resurgences in Covid-19 are “business as usual”, according to the chief executive of Renesas Electronics. Hidetoshi Shibata, who heads one of the world’s largest suppliers of automotive chips, told the FT that new outbreaks of coronavirus had also posed a challenge for the Japanese group’s €4.8bn takeover of Dialog Semiconductor.
5. Theranos’s blood brothers
Silicon Valley still believes it can build a computer that can diagnose medical problems from drops of blood, even as the founder of failed start-up Theranos appears in court on charges of defrauding investors with such a vision. In the past 12 months alone, investors have poured more than $200m into three start-ups that are trying to build small blood-testing devices, reports Miles Kruppa.
Tech tools — Seven happy home gadgets
How To Spend It has reviewed seven products to use around the house, including Sage’s smart pizza oven, Jura’s Z10 coffee machine, Zwilling’s vacuum food storage, the Arlo Essential Indoor Camera and the voice-controlled Smarter iKettle 3.0 (pictured). Time for a brew, I think.
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