Daily Archives: July 5, 2021

Government urged to recognise the role of councils in ‘tackling climate crisis’ – Circular Online

Posted: July 5, 2021 at 5:33 am

Ahead of the publication of the governments Net Zero Strategy, which sets out where carbon emissions savings will be made, a coalition of local government, environmental and research organisations have called for urgent powers and resources for local authorities.

Recognising local authorities as key partners in the Net Zero Strategysets out how local authorities have developed plans and could rapidly scale up actions to meet climate targets, but only if they are supported by government.

The coalition believes that the Net Zero Strategy must include a clear commitment to a mutually agreed central framework.

The Association of Directors of Environment, Economy, Planning and Transport (ADEPT), Ashden, Friends of the Earth, Grantham Institute at Imperial College, Green Alliance, Greenpeace UK, London Environment Directors Network (LEDNet), Place-Based Climate Action Network (PCAN) and Solace are seeking recognition of local government as key partners in achieving net zero.

The paper is supported by the Local Government Association and London Councils.

The coalition recognises that significant reductions in carbon emissions have been made by the power sector, in particular, but argues that government must now focus on sectors such as housing and transport which are far harder to decarbonise.

Tackling these requires on behavioural change as well as the delivery of low carbon solutions, which is why the coalition is advocating that local government is best placed to influence due to having a closer relationship with local communities.

Local authorities also have control over key sectors in the push to decarbonise. Transport planning, waste management, economic regeneration, land use planning and regulation of energy efficiency standards are all managed by local government.

The government will not meet its targets without the work of local authorities, and we want to ensure the transition to a low carbon society is just.

They also have huge influence over emissions through their procurement, which was worth at least 63 billion in 2019/20 and accounts for 70-80% of an individual councils carbon footprint. But in some of these areas like planning national policy and regulations can hinder not help local climate action.

The coalition says that empowering local authorities is not a nice to have, but essential not just in decarbonisation, but also in contributing to other government priorities, including levelling up, reducing inequality, health and wellbeing, and delivering a green economic recovery.

Paula Hewitt, ADEPT President said:The government will not meet its targets without the work of local authorities, and we want to ensure the transition to a low carbon society is just.

As leaders in our areas, we bring together partnerships from across different sectors, as well as our communities, businesses, suppliers, strategic bodies and the voluntary sector.

No-one else has the reach, the levels of trust or ability to provide targeted support that will encourage and enable behavioural change. We have already started this work as our case studies show. What we need now is the recognition and resource to go further, faster.

The organisations have called on the government to adopt four key priorities to ensure the success of the Net Zero Strategy:

Visit link:

Government urged to recognise the role of councils in 'tackling climate crisis' - Circular Online

Posted in Resource Based Economy | Comments Off on Government urged to recognise the role of councils in ‘tackling climate crisis’ – Circular Online

Special Rapporteur on Extreme Poverty Calls for the Creation of a Global Fund for Social Protection during Interactive Dialogue with the Human Rights…

Posted: at 5:33 am

Council Starts Interactive Dialogue with the Special Rapporteur on Extrajudicial, Summary or Arbitrary Executions

30 June 2021AFTERNOON

The Human Rights Council this afternoon held an interactive dialogue with the Special Rapporteur on extreme poverty and human rights and started an interactive dialogue with the Special Rapporteur on extrajudicial, summary or arbitrary executions.

Olivier De Schutter, Special Rapporteur on extreme poverty and human rights, said a Global Fund for Social Protection should be set up to increase the level of support to low-income countries, thus helping them to both establish and maintain social protection floors in the form of legal entitlements, and to improve the resilience of social protection systems against shocks. Such a Fund was affordable. He also spoke on his visit to the European Union.

European Union spoke as a country concerned.

In the ensuing dialogue, speakers expressed concern that nearly 700 million people in the world were living in extreme poverty, and that COVID-19 may drag over 100 million people into poverty. Some nations suffered disproportionately from the poverty effects of the pandemic due to multiple challenges they were facing. Some speakers said that the COVID-19 pandemic had only exacerbated what already existed before: extreme inequality had its origins in the global order imposed by powerful countries for their own benefit.

Speaking were Egypt on behalf of the Group of Arab States, Peru on behalf of a group of countries, China on behalf of a group of countries, United Nations Children's Fund, Paraguay, France, Sovereign Order of Malta, Indonesia, Luxembourg, Ecuador, Cuba, Senegal, Iraq, Armenia, Togo, Burkina Faso, China, India, Morocco, Algeria, Venezuela, Egypt, Kenya, Nepal, Botswana, Namibia, Malaysia, Sudan, Pakistan, Belgium, Nigeria, Timor-Leste, Mali, Afghanistan, Ethiopia, Mauritania, Philippines, Viet Nam, Yemen, Panama, Tunisia, Bangladesh, Albania, Malawi, Democratic Republic of the Congo, Bolivia, Cameroon, Djibouti, Bahamas, Iran, and South Sudan.

The following non-governmental organizations also took the floor: Friedrich Ebert Stiftung, Consortium for Street Children, VIVAT International, FIAN International e.V., Instituto Brasileiro de Analises Sociais e Economicas, International Youth and Student Movement for the United Nations, Rahbord Peimayesh Research & Educational Services Cooperative, Lutheran World Federation, Sikh Human Rights Group, and Federatie van Nederlandse Verenigingen tot Integratie Van Homoseksualiteit - COC Nederland.

The Council then began an interactive dialogue with the Special Rapporteur on extrajudicial, summary or arbitrary executions.

Morris Tidball-Binz, Special Rapporteur on extrajudicial, summary or arbitrary executions, presenting two reports by his predecessor, said that the first report was an overview of the work conducted during the tenure of the former Special Rapporteur Agns Callamard, in which she recommended that the title of the mandate be renamed as Special Rapporteur on arbitrary deprivation of life or, alternatively, on unlawful killings and unlawful deaths or on the right to life. He also spoke about Ms. Callamards visit to Nigeria.

Nigeria spoke as a concerned country.

Speakers noted that the reports demonstrated a grim reality of extrajudicial, summary or arbitrary executions that continued to be committed by both State and non-State actors. Some speakers thanked the Special Rapporteurs predecessor, especially for her report on the killing of journalist Jamal Khashoggi and the gender-sensitive approach she incorporated in her work. Other speakers said that the former Special Rapporteur went beyond her mandate and politicised her work, hoping the new Special Rapporteur would remain impartial. What was the view of the Special Rapporteur on renaming the mandate to on the right to life?

Speaking were the European Union, Sweden on behalf of a group of countries, China on behalf of a group of countries, Liechtenstein, Sierra Leone, Libya, France, Indonesia, Switzerland, Cuba, Fiji, Iraq, Armenia, Syria, Chile, and China.

Indonesia and Brazil spoke in right of reply.

The webcast of the Human Rights Council meetings can be found here. All meeting summaries can be found here. Documents and reports related to the Human Rights Councils forty-seventh regular session can be found here.

The Council will next meet on Thursday, 1 July at 10 a.m. to continue the interactive dialogue with the Special Rapporteur on extrajudicial, summary or arbitrary executions, followed by an interactive dialogue with the Special Rapporteur on the rights to freedom of peaceful assembly and of association.

Interactive Dialogue with the Special Rapporteur on Extreme Poverty and Human Rights

Reports

The Council has before it the reports of the Special Rapporteur on extreme poverty and human rights (A/HRC/47/36) on the Global fund for social protection: international solidarity in the service of poverty eradication, and (A/HRC/47/36/Add.1) on his mission to the European Union, as well as comments by the State (A/HRC/47/36/Add.2)

Presentation of the Reports

OLIVIER DE SCHUTTER, Special Rapporteur on extreme poverty and human rights, said that as a result of the COVID-19 pandemic and the measures adopted to protect populations, an estimated 115 million additional people may have fallen into extreme poverty in 2020, and 35 million more may follow this year. The COVID-19 pandemic had caught the world unprepared: 61 per cent of the global workforce was still made up of informal workers or workers in precarious forms of employment, with little or no access to social protection; 55 per cent of the world's population, 4 billion people, had no social protection whatsoever; and an additional 26 per cent were covered only against some forms of economic insecurity. A Global Fund for Social Protection should be set up to increase the level of support to low-income countries, thus helping them both to establish and maintain social protection floors in the form of legal entitlements, and to improve the resilience of social protection systems against shocks. Such a Fund was affordable.

The International Labour Organization estimated that the funding shortfall for low-income countries, representing 711 million people, was $ 79 billion per year, including $ 41 billion for health care. While this represented 15.9 per cent of the gross domestic product of low-income countries - an altogether unaffordable amount for these countries - it was half the total level of official development assistance provided by the Organization for Economic Co-operation and Development countries in 2020. The international community could and must do better. While international support was crucial, it should not be seen as a substitute for the mobilisation of domestic resources to finance social protection floors, but rather as an incentive to encourage recipient countries to build capacity and to invest more in this area. International support therefore should be seen as launching a process that would allow recipient countries to gradually increase the levels of domestic resource mobilisation: it would ensure a predictable level of support to countries committed to establishing social protection floors. The Human Rights Council was now being given an opportunity to support what the Special Rapporteur saw as a major step towards the realisation of the right to social security as a human right.

On his visit to the European Union, he noted that while the bloc had launched a number of programmes to combat poverty, Member States still encountered a number of obstacles to effectively address poverty and inequalities, including unhealthy social and fiscal competition between countries and socio-economic governance frameworks that did not favour social investment. The economic recovery provided a unique opportunity to rethink these constraints.

Statement by Country Concerned

European Union, speaking as a country concerned, said its social policy was in full compliance with the Sustainable Development Goals and international human right frameworks. In the European Union, economic considerations and social rights were both components of a highly competitive and sustainable development. In international comparisons, the European Union as a whole ranked among the best performers in terms of equality of income and opportunities and social policies. While differences persisted among and within the Member States, upward social convergence towards the best performing countries not only in the European Union, but at the global level too - had been steadily continuing before the current crisis. At the European Union level, poverty and exclusion were considered as multidimensional phenomena, as regards their components, their drivers and the policy measures to tackle them. The agreed definition related to people at risk of poverty or social exclusion, which was a much more ambitious concept than extreme poverty and demonstrated the determination of the European Union to strive for high standards of living for all.

Discussion

Speakers were very concerned that nearly 700 million people in the world were living in extreme poverty, and that COVID-19 may drag over 100 million people into poverty. Some nations suffered disproportionately from the poverty effects of the pandemic due to multiple challenges they were facing. Speakers called on the international community to expand resources on combatting poverty. Other speakers noted that it was important to ensure that the proposed Global Fund was well integrated with the multitude of existing regional and international mechanisms working on this issue. Some speakers said that the COVID-19 pandemic had only exacerbated what already existed before: extreme inequality had its origins in the global order imposed by powerful countries for their own benefit. At the same time, these developed countries were also experiencing unprecedented income inequality at home, with millions sliding into poverty. Speakers hoped that the Special Rapporteur would pay particular attention to the situation in these countries.

Interim Remarks

OLIVIER DE SCHUTTER, Special Rapporteur on extreme poverty and human rights, said the International Labour Organization had received a mandate from its constituent members to initiate proposals and launch discussions on such a fund. His mandate and the International Labour Organization would cooperate in that context. The International Labour Organization had the capacity to support a secretariat for the Fund. Rather than reinvent the wheel, all should strive to build on existing structures and achievements. The Fund would encourage States to invest their own resources in social protection; it would not replace such investments. In an interlinked, global world, all populations needed to benefit from social protection.

Discussion

Speakers said foreign debt was an impediment to the provision of social protection in developing countries and encouraged Member States of the Council to support the creation of a Global Fund for Social Protection. Pointing out that gaps in social protection were mostly due to a lack of financial resources, speakers said if such a fund was to offer a meaningful, dignified and rights-based approach to helping countries scale up social protection, it should prioritise unconditional and universal support. Speakers urged the allocation of resources to non-governmental and community-based organizations to assist with implementation and monitoring. A wider recognition of women partaking in the non-monetised care economy was required as they desperately needed access to social security. Several speakers expressed their deep concern for the ongoing increase in extreme poverty, hunger and human suffering and the lack of basic protection of impoverished communities, especially in low-income countries. They pointed out that, meanwhile, global wealth continued to grow.

Concluding Remarks

OLIVIER DE SCHUTTER, Special Rapporteur on extreme poverty and human rights, said social protection was not the end result of a development process but rather a precondition for sustainable growth. Countries facing conflict as a result of poverty showed that deprivation could beget violence. Rich countries would only deliver if civil society and labour unions maintained the pressure. The Special Rapporteur said he was nevertheless convinced that Governments would be responsive to his proposals, and concluded by saying he was looking forward to engaging with them.

Interactive Dialogue with the Special Rapporteur on Extrajudicial, Summary or Arbitrary Executions

Reports

The Council has before it the report of the former Special Rapporteur on extrajudicial, summary or arbitrary executions (A/HRC/47/33) on a reflection of her work over the past five years, and (A/HRC/47/33/Add.2) on her mission to Nigeria.

Presentation of the Reports

MORRIS TIDBALL-BINZ, Special Rapporteur on extrajudicial, summary or arbitrary executions, stated that during the short time since his appointment last April, he had issued, alone or jointly with other Special Procedures, a total of 37 communications to States and non-State actors as well as 16 press statements, and had met with 18 Permanent Missions. The stark reality of extrajudicial, summary or arbitrary executions continued to be brought to his mandates attention from around the globe and on a daily basis. From cowardly killings of humanitarian health workers and mine-clearance personnel; to massacres, including of children; from the pandemic proportion of gender-based murder, in particular femicides; to State-sponsored and often racist-driven killings of those labelled as undesirables; as well as the imposition of the death penalty in violation of international law.

The first report he was presenting was an overview of the work conducted during the tenure of the former Special Rapporteur Agns Callamard, in which she recommended that the title of the mandate be renamed as Special Rapporteur on arbitrary deprivation of life or, alternatively, on unlawful killings and unlawful deaths or on the right to life. In the second report on her visit to Nigeria from 19 August to 2 September 2019, she had specifically examined the situation of women and lesbian, gay, bisexual, transgender and intersex persons and included a focus on Nigerias criminalisation of abortion.

Turning to his work so far, Mr. Tidball-Binz identified the following themes for engagement: deaths in custody, their documentation and prevention; femicide; the role of medico-legal and death-investigation systems in preventing unlawful killings; the protection and respect for the dead following unlawful killings; lessons learned from the Ebola epidemic in 2014 and 2015 and from the COVID-19 pandemic; and the right to life in disaster prevention and response. In addition, the Special Rapporteur committed to continue monitoring the implementation of all standards relating to the imposition of capital punishment. He may also engage research into the growing view that the death penalty raised serious issues in relation to the dignity and rights of all human beings, including not only the right to life but also the right not to be subjected to torture or other cruel, inhuman or degrading treatment or punishment.

Statement by Country Concerned

Nigeria, speaking as a country concerned, thanked the former Special Rapporteur for her visit, adding that Nigeria had taken copious notes while reading the report, even though it disagreed with some of its conclusions. The Government had faced several security challenges in the past years, including Boko Haram and kidnappings, and had taken adequate measures to ensure security and uphold human rights in that context. Nigeria condemned all acts of extrajudicial or summary executions. It should be remembered that human rights violations were contributing factors to numerous conflicts around the world. Stressing that they were a reflection of broader problems related to criminal justice and law enforcement, Nigeria said it had improved its judicial framework to ensure accountability and provide reparation to victims while bringing an end to extrajudicial killings by investigating and prosecuting all allegations related to this practice. Nigeria remained strongly committed to human rights.

Discussion

Speakers noted that the reports demonstrated a grim reality of extrajudicial, summary or arbitrary executions that continued to be committed by both State and non-State actors. They thanked the Special Rapporteurs predecessor, especially for her report on the killing of journalist Jamal Khashoggi and the gender-sensitive approach she incorporated in her work. Other speakers said that the former Special Rapporteur went beyond her mandate and politicised her work, hoping the new Special Rapporteur would remain impartial. Summary killings had no place in the modern world. Wealthy nations had amassed COVID-19 therapeutics and vaccines hoping to protect their citizens, but no one would be safe in an interconnected world of migration and international travel until everyone, including those in the global south, had access to these medicines. Was this state of affairs tantamount to an infringement on the right to life in the opinion of the Special Rapporteur? Speakers expressed their hope that the Special Rapporteur would continue to focus on the abolition of the death penalty. What was his view on renaming the mandate to Special Rapporteur on the right to life?

Link: https://www.ungeneva.org/fr/news-media/meeting-summary/2021/06/afternoon-special-rapporteur-extreme-poverty-calls-creation

For use of the information media; not an official record

View post:

Special Rapporteur on Extreme Poverty Calls for the Creation of a Global Fund for Social Protection during Interactive Dialogue with the Human Rights...

Posted in Resource Based Economy | Comments Off on Special Rapporteur on Extreme Poverty Calls for the Creation of a Global Fund for Social Protection during Interactive Dialogue with the Human Rights…

World Bank project set to boost Tanzanian higher education – University World News

Posted: at 5:33 am

TANZANIA

The allocation will be done as part of the World Banks Higher Education for Economic Transformation Project.

According to Dr Roberta Malee Bassett, a senior education specialist at the World Bank, about 80% of the funding will be used to boost enrolments and to improve the quality of teaching at Tanzanian universities.

But the ongoing expansion of Tanzanias upper secondary education, with a current gross enrolment ratio of 7%, is expected to put pressure on the tertiary education system to admit more students.

According to the governments predictions, the demand for higher education is expected to surge to at least 482,000 places by 2030 and, in this case, the World Bank says, there is an urgent need for expansion of university education in Tanzania to accommodate the growth.

Annual enrolment numbers at Tanzanias higher education institutions grew from about 112,000 in 2016-17 to more than 210,000 in 2017-18, thanks to improvements in infrastructure and initiatives to provide higher education loans, but then dropped again as the government closed down some programmes at private universities because of quality concerns.

Tanzanias tertiary gross enrolment rate of 3.1% is one of the lowest in Eastern Africa and lags behind Kenyas 11.5%, Ethiopias 8.1%, Rwandas 6.2% and Ugandas 4.8%, according to UNESCO.

Bassett says the overall quality of post-secondary education in Tanzania is also low and does not adequately prepare university graduates for current and future formal jobs or self-employment.

The reasons for this include a shortage of qualified lecturers. Currently, only 52% of academic staff members have a masters degree and about 33% have a PhD. The rest have lower qualifications.

Outdated teaching methods

The World Bank notes that many lecturers are not trained in the use of the latest technical developments and global knowledge in their fields, and use outdated, mostly lecture-based teaching methods, [thereby] limiting the development of adequate competencies among students.

Although the Tanzanian economy needs more skilled workers, many university graduates have struggled to find jobs.

The reasons for this include a mismatch between the skills that are taught and those that are in demand on the labour market. Curricula and teaching and learning facilities in Tanzania are often outdated, the World Bank says.

In terms of the project, several public universities have been selected to become high-quality centres of learning that will focus on priority areas.

These universities include the Muhimbili University of Health and Allied Sciences, the University of Dodoma, the Moshi Cooperative University, the Dar es Salaam University College of Education, the Mkwawa University College of Education, the Sokoine University of Agriculture, the Mbeya University of Science and Technology, the University of Dar es Salaam and the Open University of Tanzania.

Bassett says 14 priority areas have been selected based on the key disciplines required to build the countrys industrial economy and propel its development agenda.

These areas include engineering and technology, information communication and technology, material sciences, health sciences, urban and environmental engineering and technology and renewable energy. Others are water resources, climate change, agriculture, wildlife conservation, tourism and hospitality, academic industry linkages, humanities, and education.

The challenge is to build a higher education system with the capacity to provide skills and create jobs for the growing number of young people entering the labour market each year. Although Tanzania has, in the past 10 years, expanded access to education, only 9% of the labour force has completed secondary education and just 1.3% has a university education.

Looking for jobs

About one million young people have been entering the Tanzanian labour market annually since 2015. By 2030, this number is projected to reach 1.6 million per year, the World Bank says in the project report.

The project will also assist universities to promote an inclusive and equitable environment for students with disabilities. Specifically, this will include renovation and the rehabilitation of classrooms and lecture rooms to suit special-needs education, as well as the construction of hostels, specialised examination rooms and resource centres for students with disabilities.

The project also has an explicit focus on reducing gender gaps while increasing access to higher education for both women and men. Bassett says special attention will be given to disabled women, women living with albinism, and women from vulnerable groups who may be more subjected to barriers to higher education by negative socio-cultural factors.

See original here:

World Bank project set to boost Tanzanian higher education - University World News

Posted in Resource Based Economy | Comments Off on World Bank project set to boost Tanzanian higher education – University World News

As mining booms in Bhutan, environmental damage and allegations of corruption are rampant – Scroll.in

Posted: at 5:33 am

Thick forest covers most of Bhutan, making the tiny Himalayan nation famous for its pristine natural landscape. But increasingly, a stark sight is appearing amid the lush greenery: across the country, mines are springing up.

With the issuance of new licences, the past decade has ushered in a golden age for mining in Bhutan. As of 2013, the latest year for which official data is available, there were 27 mines and 46 quarries in operation, from just 17 mines and 10 quarries in 2006.

The sector has long been embroiled in controversies and criticised for putting corporate interests before people and the environment. Critics say that the current system benefits only a few rich individuals while burdening local communities with a host of environmental impacts, from air pollution to road and infrastructure destruction and poorly managed waste.

Corruption allegations are rife. As the mining industry grows, Bhutan is struggling to reform it and its chronic issues are becoming more severe.

The government acknowledges that mining and quarrying have an impact on the environment, stripping vast swathes of land of their vegetation and affecting ground stability and water reserves. But it has also stated that taking advantage of the countrys rich mineral resources can help the economy.

Mineral deposits in Bhutan include a vast wealth of resources such as coal, dolomite, limestone, slate and copper. According to the 2017 Mineral Development Policy, 33% of the country has been geologically mapped on a scale detailed enough to enable exploration.

Currently, only 0.04% of the land is used for mining activities. Despite its relatively small size, the sector is due to play a significant role in Bhutans economic development, and the government is determined to tap into the potential of its unexplored resources.

Loknath Sharma, the minister for economic affairs, told The Third Pole that there is a need for resource mapping of the country to enhance geological information, and create an environment for attracting investment and promoting the sustainable development of mineral reserves.

Sharma said that Bhutans mining sector accounted for 4.81% of the gross domestic product in 2019, and supplies more than half of the top-10 export commodities. The sector also plays a vital role in revenue generation, he added. Mining is becoming increasingly strategic for Bhutan as it strives to diversify its revenue streams and reduce the gap between its imports and exports.

However, with the sectors expansion, many are starting to question whether the environmental trade-offs are worth it.

Environmental conservation remains a key principle at the heart of Bhutans development path, and one of the four pillars of its Gross National Happiness guiding philosophy.

The only existing assessment of the mining sectors impact was released in 2013 by the upper house of Bhutans bicameral parliament, the National Council. It found that the non-renewable nature of the mining industry does not align with sustainable development. Despite controversies engulfing Bhutans growing extractive activities, no other studies have been carried out to date.

In Bhutan, all mines extract minerals from an open pit, a technique that has a particularly severe impact on landscapes, wildlife and water systems, which are often altered and polluted. Because mines are long-lasting infrastructure and involve activities such as extensive drilling, blasting, road construction and heavy machinery usage, experts warn the deep environmental damage they cause are difficult to repair after projects end.

In light of what they perceive as government inaction, communities affected by mining are taking the matter into their own hands. Choney Dorji Tamang, a 30-year-old resident of the western district of Samtse, said: We have lodged a complaint with the local government against the mining and quarrying operators in the locality for causing cracks in our homes and dust pollution.

He added that pollution from the activities of mining companies operating in the area is threatening his communitys health, crop production and water resources.

Prem Bdr Yakha, who also lives in Samtse district, said his community is surrounded by four mining sites. With so many industrial activities being carried out on a daily basis, we are living in and breathing polluted air, and are exposed to all kinds of pollution including sound, water and environment more generally, Yakha said. We are worried about our future and also about our childrens future.

He also complained that mining operators dump unwanted materials into nearby water bodies. This increases the risk of flooding during the monsoon season, posing a threat to local peoples homes, Yakha said.

The 2013 assessment report found that illegal dumping of soil in ravines and rivers was a common sight in the vicinity of mining and quarrying operations. It also highlighted the damage caused by dust to crops such as oranges and chillies, as well as the impact of blasting on heritage sites such as monasteries.

In another claim against mine operators, residents of Neygang, part of the broader Pugli village cluster in Samtse, have requested the local government find them alternative drinking water sources, because traditional water sources have dried up due to mining activities.

All complaints lodged so far are currently with the local authorities, but villagers are yet to receive an answer to their plight.

Mines and quarry operators need to obtain public clearance prior to seeking official approval. Rinzi, a local leader of the Mewang village block near the capital Thimphu, said that when seeking public clearance and approval, mining companies promise to rigorously comply with existing laws and also to contribute to the development of local communities. But once they get hold of the contract, you can expect that most of these pledges will be all but forgotten, he said.

In 2020, several villagers in Dewathang block, Samdrup Jongkhar district, filed an official complaint against a coal mining company for causing cracks in their houses. The coal mine covers a lease area of 27.5 hectares.

The Third Pole was able to carry out a rare interview with Bir Bdr Ghishing, the senior general manager of the operator responsible for the project involved in the complaint, SD Eastern Bhutan Coal Company. Ghishing discussed some of the controversies and allegations facing the mining sector in Bhutan.

In response to the Dewathang residents allegations, he said that the nearest private house with cracks was not less than 150 metres away, and there was a buffer area between the village houses and the mining site. If these houses are affected by mining there should be cracks developed in the buffer zone, but there were no such cracks noticed in that area.

Ghishing said that while mining disturbs the local environment, it also transforms difficult terrains into proper landscapes. Some of the mines his company has developed have been repopulated with greenery once the government lease expired, he added.

Back in 2013, the environmental impact assessment report found that restoration efforts were minimal across most mining and quarry sites. Similarly, the Performance Audit Report on Mining and Quarrying 2014, the only study to have assessed the performance of Bhutans mines, flagged companies widespread failure to pay compensation for the environmental impacts of excavations and plan for sites restoration.

Ghishing rejected the accusations, saying that we would not have been allowed to operate a mine without an approved environmental restoration plan. Local people say they still have not seen any restoration carried out at the site.

Lam Dorji, an environmentalist and chief executive at the Centre for Environment and Development, was also a lead researcher for the National Councils 2013 report. Dorji told The Third Pole that the natural resources are currently exploited in the context of relaxed regulatory and monitoring mechanisms.

He said that Bhutan needs stronger governance, so that the probability of [rogue] mine operators being caught is high. This would improve the condition of affected communities and reduce environmental impacts, as well as increasing the mining sectors contribution to the countrys tax revenues.

A senior expert with direct knowledge of the mining sector agreed to speak with The Third Pole, on condition of anonymity, about how poor oversight is exacerbating the impacts of mining operations. They explained that the Department of Geology and Mines is required to deploy an inspector at every mine and quarrying site, maintaining a record of the minerals extracted and transported across the country.

These records, the expert said, are key to helping the government calculate royalties and other taxes based on the amount of minerals being extracted. However, the mine inspectors routinely hand the record-keeping duty to the mine operators and their employees. This enables a number of operators to manipulate extraction and sales figures, the expert said.

A lack of transparency also has serious environmental consequences, a former mine inspector, who asked to remain anonymous, said. On-site monitoring ensures that operators take the right steps to reduce dust and noise pollution, manage their waste appropriately and ensure that mine owners carry out the promised environmental restoration.

Choiten Wangchuk, the director-general at the Department of Geology and Mines, told The Third Pole that he could not categorically deny that such fraudulent episodes may have happened, but in the year since he joined the department he had not received any such complaints.

In January 2020, the Economic and Finance Committee of the National Assembly, the elected lower house of Bhutans bicameral parliament, conducted a public hearing that brought together mine operators, affected communities and governing agencies. Residents of the affected areas said mine operators have not contributed to villages development and caused irreparable environmental damage.

During the hearing, the current opposition leader Dorji Wangdi stated that mines and minerals are national wealth, but hard evidence proves that only a few individuals are reaping the benefits.

At the time, Wangdi was one of the 13 members of the Economic and Finance Committee tasked with reviewing the Mines and Minerals Bill 2019. To ensure all voices were heard in the policymaking process, the committee organised a bipartisan field visit to mine sites across the country.

Talking to The Third Pole, Wangdi said his concerns are based on the shocking reality on the ground he and the committee members witnessed during their visit.

After personally assessing the impacts of mining on both the community and environment, he said, I can conclude that mining is both a human and an environmental catastrophe.

He described the scale of destruction brought by the industrial development, with air, drinking water, homes and crops polluted, as well as damage to infrastructure and even roads.

The bipartisan committee agreed that despite suffering large-scale destruction, local communities have not reaped any benefits. The mining industry has brought some benefits in terms of jobs, but the experts agreed their prospects would have been much better without mining activities.

Considering Bhutans emphasis on environmental conservation and the mining impacts on communities and environment, I am convinced that large-scale industrial mining should be avoided as much as possible, while smaller quarries and mines for cement production can be continued to meet local developmental needs, the opposition leader concluded.

Mining and quarrying companies contribute to society through royalties, lease fees and corporate income tax, which constitutes the lions share of the governments revenues from the sector. However, a lot of substantial potential taxes are cut by adding various kinds of fake expenses, said an official source, speaking on the condition of anonymity.

Dorji Wangdi, the opposition leader, confirmed that the 2019 bipartisan commission uncovered several instances of tax avoidance in the mining sector, mostly through accounting manipulation.

He recalled how a mining company he audited had created a long list of ghost employees, including the chief executive, who was supposedly paid a monthly salary of 5,00,000 Bhutanese ngultrums. But when I asked the mineworkers about the whereabouts of that CEO, the staff had no clue and told me the CEO had not visited the site for two years, he said.

Corporate income tax is calculated based on net profits. Miners have been found to create a vast pool of fake roles, ranging from chief executives to various directors, including fictional expenses such as duty vehicles, fuel payments, housing and travel, all of which could be deducted from the taxes due.

Without conducting an inspection and audit, it becomes difficult for the government to unveil the truth, the anonymous officer said. The issue calls for a revision of royalty and lease fees as well as the annual auditing of all mines and related companies.

Minister Loknath Sharma conceded that mining in Bhutan is still a developing and dusty affair, and without proper pollution-control technologies and modern extraction methods, affected people have a point when they complain they are not benefitting from the industry.

While the expansion of large-scale mining remains controversial, he said that most mining activities in Bhutan remain small-scale, with much lower impacts on the environment.

The government will discuss mining reforms during the next parliamentary session, which usually takes place between November and December. Whether to nationalise the mines to address some of the corruption issues plaguing the sector will be on the agenda.

This article first appeared on The Third Pole.

Read more here:

As mining booms in Bhutan, environmental damage and allegations of corruption are rampant - Scroll.in

Posted in Resource Based Economy | Comments Off on As mining booms in Bhutan, environmental damage and allegations of corruption are rampant – Scroll.in

We Just Ripped The Pin Out Of The GrenadeRadical New Bitcoin Company Issues Stark Coinbase Price Warning – Forbes

Posted: at 5:31 am

Competition between bitcoin and cryptocurrency exchanges is heating up as millions of new users flock to crypto following huge price rises this year.

The bitcoin price, after soaring to around $65,000 per bitcoin in April, has fallen sharply but the likes of San Francisco-based Coinbase continue to make millions in transaction fees.

Now, Jack Mallers, the chief executive of Chicago-based bitcoin payments company Strike, has warned that Coinbase is not "competing in the free market"announcing Strike will let U.S. customers buy and sell bitcoin for almost no fees.

Sign up now forCryptoCodexa free, daily newsletter for the crypto-curious that explains the world of bitcoin with brevity. Arriving in your inbox at 7am EDT every weekday

The bitcoin price has fallen sharply since it hit highs of around $65,000 per bitcoin in April, ... [+] coinciding with the Nasdaq market debut of major crypto exchange Coinbase.

"Its unclear if Coinbase can attempt to compete on fees, even if they wanted to," Mallers, who recently found fame among the bitcoin and cryptocurrency community when it was announced Strike would be working with the El Salvador government to bring mass bitcoin payments to the country, wrote in a blog post.

Mallers, who's also the CEO of Strike's parent company Zap Technologies, warned that bitcoin-buyers using Coinbase are paying to "help subsidize the rest of [Coinbase's] efforts" with other cryptocurrencies, asking how can Coinbase afford this "customer acquisition?"

"Well, probably because they overcharge users to acquire bitcoin. Make no mistake, when you buy bitcoin on Coinbase, you are supporting sh*tcoins," Mallers wrote, using a term adopted by so-called bitcoin maximalists who think cryptocurrencies other than bitcoin are worthless, and pointing to a quote from Coinbase chief financial officer Alesia Haas who said Coinbase is "not trying to win on fees."

This week, chief executive Brian Armstrong detailed plans to launch a marketplace for decentralized apps, a project seemingly inspired by Apple's App Store, and accelerate the pace it adds digital assets. The exchange will "bring more assets to Coinbase, faster," Armstrong wrote in a blog post.

CryptoCodexA free, daily newsletter for the crypto curious. Helping you understand the world of bitcoin and crypto, every day

The bitcoin price has surged over the last year, helping make bitcoin and cryptocurrency exchanges ... [+] millions in transaction fees, with Coinbase one of the biggest winners.

Strike, which uses bitcoin's experimental second-layer Lightning Network to process trades, said it will charge around 0.3% for bitcoin transactions. Coinbase, for comparison, scoops almost 4% from some trades. Strike's service, which Mallers claims won't make money for the company, also undercuts PayPal and its subsidiary Venmo, Square's Cash App and Swan Bitcoin.

Coinbase, the largest U.S. cryptocurrency exchange with 56 million verified users and $223 billion in assets, became the first crypto exchange to go public in April, listing its shares directly on the Nasdaq. In May, Coinbase said it brought in $1.8 billion in revenue during the first three months of the year, up from $191 million in the same period a year ago while profits jumped to $771 million from $32 millionalmost entirely from trading fees.

"We just ripped the pin out of the grenade and tossed it into the crowd," wrote Mallers. "Buying bitcoin will not cost more than it takes to acquire. Buying bitcoin will not subsidize sh*tcoin casinos."

More here:
We Just Ripped The Pin Out Of The GrenadeRadical New Bitcoin Company Issues Stark Coinbase Price Warning - Forbes

Posted in Bitcoin | Comments Off on We Just Ripped The Pin Out Of The GrenadeRadical New Bitcoin Company Issues Stark Coinbase Price Warning – Forbes

Bitcoin had a wildly volatile first half. Here are 5 of the biggest risks ahead – CNBC

Posted: at 5:31 am

Chris Ratcliffe/Bloomberg via Getty Images

Bitcoin had a solid start to 2021, hitting an all-time high of nearly $65,000 in April. But the digital coin closed out the first half of the year down about 47% from its record and a number of looming risks could result in further pain ahead.

While proponents appear to be holding onto bitcoin for now, other investors are wary about wild volatility in the market and what it means for their portfolios. With that in mind, here are five of the biggest risks facing the cryptocurrency as we enter the second half of the year.

One of the biggest risks for bitcoin right now is regulation.

In recent weeks, China has clamped down on its cryptocurrency industry, shuttering energy-intensive crypto mining operations and ordering major banks and payment firms like Alipay not to do business with crypto companies.

Last week, the global crypto crackdown spread to the U.K., where regulators banned leading digital currency exchange Binance from undertaking regulated activities.

Simon Yu, co-founder and CEO of crypto cashback start-up StormX, told CNBC that China's moves should be viewed as a "positive" thing for bitcoin and other cryptocurrencies like ether as it will lead to more decentralization. However, he added that "over-regulation" of crypto in the United States could be a problem.

"As a country, the U.S. has too many departments regulating it from different angles is crypto a security? A commodity? A property?" Yu said. "As of now, the U.S. hasn't figured out how to properly regulate the industry, which oftentimes leads to decisions that are difficult for crypto to operate."

U.S. Treasury Secretary Janet Yellen and other officials have recently warned about the use of cryptocurrencies for illicit transactions.

Last year, former President Donald Trump's administration proposed an anti-money laundering rule that would require people who hold their crypto in a private digital wallet to undergo identity checks if they make transactions of $3,000 or more.

"We've long warned that shifting investor sentiment or regulatory crackdowns could pop bubble-like crypto markets," UBS wrote in a note this week.

Another big risk is persistent, extreme swings in the price of bitcoin and other digital currencies.

Bitcoin rallied to an all-time record of around $64,829 in April this year, on the day of crypto exchange Coinbase's blockbuster debut. It then tumbled as low as $28,911 in June, briefly sliding below $30,000 and turning negative for the year. It's since risen back above $34,000.

Bitcoin bulls see it as a kind of "digital gold" an asset uncorrelated to the wider marker that could provide sizable returns in times of economic turbulence. But while volatility can be good when the price of an asset is going up, it goes both ways.

While you would have doubled your money if you bought bitcoin in January and cashed out in April, today those year-to-date returns would be 18%. Still, that's above the performance of the S&P 500 index, which is up 16% since the start of the year. And over the last 12 months, bitcoin has more than tripled in price.

"Limited, highly inelastic supply on single cryptos can exacerbate volatility," says UBS. "Limited real world use and extraordinary price volatility also indicate many buyers are seeking speculative gains."

Meanwhile, the trend of traders who have made highly-leveraged bets on bitcoin getting flushed out of the market has led to intense price fluctuations this year.

While continuous volatility could put off some investors, Ross Middleton, chief financial officer of decentralized finance platform DeversiFi, said that volatility in itself isn't a barrier to institutional adoption.

Volatility "can actually be a significant draw as the potential for large price movements means that funds can make significant profits with a relatively small allocation compared to the size of their overall portfolio," he told CNBC.

"The longer that Bitcoin moves sidewards in the $30-$40k range," Middleton added, "the greater the perceived 'base-building' and the sooner that new capital will flow into both the asset and the wider crypto market."

Musk's electric car firm stunned both fans and skeptics of bitcoin this year when it bought $1.5 billion worth of the digital currency and began accepting it as a method of payment. But he subsequently roiled crypto markets after deciding to halt bitcoin payments due to the currency's "insane" energy usage and a reliance on fossil fuels.

It raises some questions for asset managers who are under heightened pressure to limit their investments to ethically-conscious assets.

"At the very least it may deter some investors from holding Bitcoin," analysts at Citi wrote in a research note earlier this year, adding it could also "spur government intervention to ban mining, as seen in parts of China."

So-called stablecoins, whose prices are meant to be pegged to real-world assets like the U.S. dollar, are also facing growing scrutiny.

Last week, Federal Reserve Bank of Boston President Eric Rosengren said tether, a stablecoin that ranks among the world's largest digital currencies, was a risk to the stability of the financial system.

Tether maintains that each of its tokens are backed 1:1 by U.S. dollars held in a reserve, the idea being that this keeps the price stable. Crypto investors often use tether tobuycryptocurrencies, as an alternative tothe greenback But some investors worry tether's issuerdoesn't have enough dollar reservesto justify its dollar peg.

In May, the company behind tether broke down the reserves for the stablecoin, revealing that around 76% was backed by cash and cash equivalents but just under 4% of that was actual cash, while about 65% was commercial paper, a form of short-term debt.

Tether has been compared to traditional money-market funds but without the regulation and, with almost $60 billion worth of the tokens in circulation, has more deposits than that of many U.S. banks.

There havelong been concernsabout whether tether is being used tomanipulate bitcoin prices, withone studyclaiming the token was used to prop up bitcoin during key price declines in its monster 2017 rally.

"Tether is a massive problem," Carol Alexander, professor of finance at the University of Sussex, told CNBC. "Regulators seem unable to stop them so far."

"Traders need tether to open accounts and trade. Or other crypto. But since most large traders are U.S.-based, tether is the obvious choice."

Rising speculation in crypto markets could prove another risk for bitcoin.

Dogecoin, a cryptocurrency that started out as a joke, surged wildly earlier this year to record highs as growing numbers of retail investors piled into digital assets in search of outsized gains.

At one point, dogecoin was worth more than Ford and other major U.S. firms, thanks in no small part to support from celebrities like Musk. Its value has depreciated significantly since then.

Elsewhere in the crypto market, a decentralized finance, or DeFi, token called titan crashed to zero. Self-made billionaire investor Mark Cuban was a holder.

"Another concern is the number of scams that have appeared throughout the year," StormX's Yu said. "With certain meme coins, we've seen many pump and dump activities and have seen retail investors getting burned."

"Whenever retail gets burned, the government steps in. And if things are over-regulated to a point, as we have seen with 2018 and ICOs (initial coin offerings), the industry as a whole could be negatively affected."

Originally posted here:
Bitcoin had a wildly volatile first half. Here are 5 of the biggest risks ahead - CNBC

Posted in Bitcoin | Comments Off on Bitcoin had a wildly volatile first half. Here are 5 of the biggest risks ahead – CNBC

Ransomware Is the IRS of Bitcoin – The Wall Street Journal

Posted: at 5:31 am

Ransomware is to bitcoin as the Internal Revenue Service is to the dollar. Just as the taxman forces you to use dollars to pay your taxes, electronic ransom demands have been set in bitcoin, forcing companies, individuals and even some governments to use the cryptocurrency if they wish to regain control of their computer systems.

If this sounds wacky, bear with me. Before getting into the full explanation, we need a brief tour of theories of money. The most widely accepted is that money was created because early humans found it so inconvenient to barter with pigs, llamas or berries. It would be much easier to swap my llamas for widely accepted itemscowrie shells, fancy feather boas or carved stonesand then swap those items again for grain than it would be to find someone with grain who happened to want llamas.

Money was also a means of accounting for debts; easier still than using cowrie shells would be to take the grain now, get some notches on a tally stick, and later provide llamas, or grain, or whatever was promised to pay off the debt.

The first of these theories focuses on money as a means of exchange, an area where bitcoin has floundered because of the cost and hassle required to actually buy something in bitcoin. Only when its anonymity and international nature help enough to offset these disadvantages, such as in evading money-laundering laws, taxes and capital controls, is it much used. The rest of bitcoin trading is speculation and exchange arbitrage.

The second theory focuses on moneys role as a unit of account, an area where bitcoin hasnt had any success so far. Even in El Salvador, where bitcoin is being made legal tender, stuff will still be priced first in dollars, then translated into bitcoin for anyone paying in crypto.

Read more:
Ransomware Is the IRS of Bitcoin - The Wall Street Journal

Posted in Bitcoin | Comments Off on Ransomware Is the IRS of Bitcoin – The Wall Street Journal

The SEC should have approved a bitcoin ETF a long time ago, regulator Peirce says – CNBC

Posted: at 5:31 am

Hester Peirce, commissioner of the U.S. Securities and Exchange Commission (SEC), center, listens during a House Financial Services Committee hearing in Washington, D.C., U.S., on Tuesday, Sept. 24, 2019.

Andrew Harrer | Bloomberg | Getty Images

Hester Peirce is perplexed.

For years, the Securities and Exchange Commission, of which Peirce is a member, has denied applications by the nation's exchanges and financial firms to list securities that track the performance of popular digital currency bitcoin.

Earlier say, 10 years ago concerns about potential market manipulation and liquidity may have made sense, but things have changed.

"That is the probably the biggest, the most-often-asked question that I get: When will the SEC approve a bitcoin exchange-traded product?" Commissioner Peirce said in an interview with CNBC on Thursday.

"I thought that if we had applied our standards as we have applied them to other products, we would already have approved one or more of them," she said. "With each passing day, the rationale that we have used in the past for not approving seems to grow weaker."

The SEC applies a "unique, heightened standard" to filings related to digital assets, she wrote in 2020. And she has argued that the agency is asking exchanges and would-be ETF sponsors for assurances beyond what it asks for traditional, equity-based products.

"People of a regulatory mindset, when they encounter something new like this, say, 'Oh, wait a minute: The market for bitcoin looks a bit different than the markets we're used to,'" Peirce said Thursday.

Now, she added, the bitcoin market looks more like an established market that has more participation from institutional and mainstream retail investors.

"So, I think the markets have matured quite a bit," Peirce said.

Renewed calls for an SEC-approved bitcoin ETF come just weeks after the regulator said it would again delay its decision on whether to approve an application by VanEck to list shares of its Bitcoin Trust on the Chicago Board of Exchange's BTZ Exchange.

Regulators said in a letter dated June 16 that they would take additional time to seek comments from the public. Specifically, the SEC is asking investors and academics for their opinions on whether bitcoin ETFs could be vulnerable to manipulation, or whether bitcoin itself is sufficiently dispersed and therefore resistant to similar underhanded tampering.

But Peirce, a Republican appointed as one of the SEC's five commissioners by former President Donald Trump, has long decried what she sees as a double standard at her own agency when it comes to bitcoin products.

Perhaps her most pointed objection came in a 2018 dissent, when she argued that the SEC should have approved an application filed by the Chicago Board of Exchange's Bats BTZ Exchange to list and trade shares of the Winklevoss Bitcoin Trust.

"By precluding approval of cryptocurrency-based ETPs for the foreseeable future, the Commission is engaging in merit regulation," she wrote at the time. "Bitcoin is a new phenomenon, and its long-term viability is uncertain. It may succeed; it may fail. The Commission, however, is not well positioned to assess the likelihood of either outcome, for bitcoin or any other asset."

Three years later, the current VanEck filing similar to pending bitcoin ETF applications from Fidelity, Cathie Wood's Ark Invest, and several others is viewed by the industry as a litmus test of an SEC now helmed by a cryptocurrency expert, Chairman Gary Gensler.

Former Commodity Futures Trading Commission Chairman Gary Gensler testifies at a U.S. Senate Banking Committee hearing on systemic risk and market oversight on Capitol Hill in Washington May 22, 2012.

Jonathan Ernst | Reuters

His nomination to lead the SEC by President Joe Biden, and his subsequent confirmation in the Senate, was met with optimism by many in the crypto community, as he is seen as a practiced hand in crafting novel financial rules.

Gensler, who has taught crypto courses at the Massachusetts Institute of Technology, is perhaps best known for his influential tenure as chair of the Commodity Futures Trading Commission in the Obama administration. While there, Gensler helped devise and institute a new oversight regime for the swaps market that had been largely unregulated prior to the financial crisis.

So, while Democrat Gensler may not necessarily agree with Trump-appointee Peirce in all matters, they may align in wanting a more proactive SEC when it comes to bitcoin regulation.

Denying bitcoin ETF applications not only runs the risk of a double standard but also may leave thousands of investors with few, more-dangerous alternatives.

"The complications of not approving [an application] become stronger, because people are looking for other ways to do the same kinds of things that they would do with an exchange-traded product," she said. "They're looking at other types of products that aren't as easy to get in and out of, they're looking at companies, perhaps, that are somehow connected with bitcoin or crypto more broadly."

Bitcoin itself has suffered a violent start to the summer and has seen its price swoon more than 40% over the last three months. Though it remains one of the most actively traded digital assets, some market watchers say bitcoin is at a critical juncture.

"It looks like it may be getting ready for a retest of $30,000, and that could be critical," UBS director of NYSE floor operations Art Cashin said on Thursday. "If you break the $30,000, then traders will look to see if there's a trapdoor, cascade sell-off that follows."

Its dizzying ups and downs come even as a growing number of businesses and banks, including payments companies Square and PayPal, have started to facilitate bitcoin transactions.

Meanwhile, Bank of New York Mellon said in February that it will begin financing bitcoin, a key development as it is both the nation's oldest bank and a leader in custody banking.

As of late Friday morning, bitcoin was up 1.6% around $33,550.

Despite the currency's volatile price swings, Peirce remains convinced that a bitcoin ETF is overdue.

It's not the SEC's job to approve or reject applications based on the merits of the investment itself, she said Thursday, especially if exchanges are meeting statutory requirements for protecting investors from fraud.

"Bitcoin now is so decentralized. The number of nodes that are involved in Bitcoin is large, and the number of people who have an interest in keeping that work decentralized is very large," she said. "People should make their own decisions: If people don't want to buy bitcoin because they think it's manipulated, they shouldn't buy bitcoin."

Here is the original post:
The SEC should have approved a bitcoin ETF a long time ago, regulator Peirce says - CNBC

Posted in Bitcoin | Comments Off on The SEC should have approved a bitcoin ETF a long time ago, regulator Peirce says – CNBC

Bitcoin’s Regulatory Future Is Darkening. Wall Street Still Likes the Business. – Barron’s

Posted: at 5:31 am

Text size

Bitcoin and other cryptocurrencies are looking shakier from a regulatory standpoint on reports that Indias central bank is cracking down. But Wall Street still sees plenty of profit for exchanges like Coinbase Global and others in the crypto economy as staking digital tokens opens up new revenue streams.

The latest regulatory hurdle for crypto appears to be India, where the Reserve Bank of India, or RBI, is informally asking banks to avoid digital currency transactions, Reuters reports.

Indian banks have been in a quandary over crypto; the RBI banned crypto transactions in 2018, but the Indian Supreme Court ruled against the ban in March 2020. Financial regulators in India may now be seeking alternate means to quash the crypto market, forcing exchanges to use other payment gateways and processors.

Indias crackdown follows one in China, where much of Bitcoin is mined, or processed. Financial authorities in May ordered a crackdown on Bitcoin mining and trading behavior, aiming to maintain financial market stability and severely punish illegal financial activities. That has triggered an exodus of mining operations out of the country.

Yet Wall Street still sees large and rising profits in the crypto economy. J.P. Morgan, for instance, issued a note on Wednesday outlining a $40 billion revenue opportunity in crypto staking, a method of validating blockchain transactions that generates income for exchanges and holders of a crypto token.

Staking is now a $9 billion business, according to J.P. Morgan and will grow to $20 billion as the two large Ethereum networks complete their merger later this year, switching to a proof of stake protocol from proof of work. The overall staking market will hit $40 billion by 2025, the Wall Street firm estimates.

We think staking will make the cryptocurrency marketplace increasingly attractive relative to other asset classes, yield-generating or not, J.P. Morgans Kenneth Worthington wrote in a note.

Exchanges stand to benefit by earning fees and commissions from customers that stake their tokens. Coinbase Global (ticker: COIN) could generate $200 million from staking in 2022, up from about $10 million in 2020, Worthington estimates. Staking could hit a $500 million annual run-rate for Coinbase by the end of 2025, he forecasts.

Proof-of-stake is also more energy efficient than proof-of-work protocols and could help reduce the steep energy-consumption and environmental toll of Bitcoin and other blockchain networks.

The Ethereum network merger could be a game-changer for staking, vastly expanding the market for tokens that run on proof-of-stake (POS) protocols. Worthington estimates that the merger will increase the market-cap of POS tokens by $250 billion, boosting POS tokens to 27% of the overall crypto market.

Staking tokens is also a way for crypto owners to earn incomeessentially by pledging their tokens to validate transactions on blockchain networks.

Owners of the Ethereum 2.0 token can earn a 5% yield for staking on Coinbase. The Kraken exchange is offering 5% to 7% yields on Ethereum staking. Other tokens may yield more. Staking USD Coinan Ethereum-based stablecoin pegged in value to the dollaron the Binance exchange can generate a 9.49% annualized yield.

Coinbase, for one, could clearly use the revenue with Bitcoin prices in a rut at around $33,472, well below peaks around $65,000 earlier this year. Coinbase plans to start staking Ethereum tokens after the network merger, potentially creating a new revenue stream.

Wall Street expects Coinbases revenue to decline to $5.6 billion in 2022 from $6.2 billion this year, according to consensus estimates. If J.P. Morgan is right, and staking takes off, it would lift revenue next year by 3.6% above the consensus. With cryptos extreme volatility, however, it is difficult to say whether that would move the needle on the stock.

Worthington has an Overweight rating and $371 target on Coinbase. The shares were at $247, down 2.6% in trading on Thursday.

Write to daren.fonda@barrons.com

Original post:
Bitcoin's Regulatory Future Is Darkening. Wall Street Still Likes the Business. - Barron's

Posted in Bitcoin | Comments Off on Bitcoin’s Regulatory Future Is Darkening. Wall Street Still Likes the Business. – Barron’s

Boom, bust and bewildered: Bitcoin’s year so far – Reuters

Posted: at 5:31 am

A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken March 15, 2021. REUTERS/Dado Ruvic/Illustration

LONDON, June 30 (Reuters) - If you're a bitcoin investor, your nerves may have taken quite a pounding in 2021.

The cryptocurrency's journey towards the investment and commercial mainstream has gathered pace, with major financial firms and companies embracing the emerging asset. read more

Such interest helped push it to a record high just shy of $65,000 in April. Yet in typically capricious fashion, it has since slumped by almost half.

At the halfway point of the year, the original and biggest cryptocurrency is up around 20% year-to-date. Here are some charts that tell the story of bitcoin's year so far.

1/STILL VOLATILE

Wild price swings have been a defining feature of bitcoin throughout its near 13-year life. The first half of 2021 has been no different, despite hopes that greater liquidity in markets and stronger infrastructure would dampen swings.

Bitcoin more than doubled from the start of the year to its all-time high of $64,895 hit in mid-April, before slumping by over half in just five weeks as regulators across the world - especially China - cracked down on cryptocurrencies.

In May alone bitcoin lost 35%, in its worst month since 2018. Last week it fell under $30,000 for the first time since January, briefly wiping out its year-to-date gains.

Many larger investors also left the bitcoin market after prices spiked in the first quarter, with some shifting to gold, according to JP Morgan analyst Nikolaos Panigirtzoglou.

"What we found out in the second quarter was that actually demand for bitcoin is price sensitive," he said. "Some institutional investors started getting out of bitcoin in April ... they thought bitcoin prices were too high relative to gold."

2/BITCOINS OR ALTCOINS?

Bitcoin has attracted the lion's share of the headlines so far this year. Yet many of its smaller digital currency rivals - known as the altcoins - have posted bigger gains.

Ether , the second-largest cryptocurrency, has nearly trebled so far this year, bolstered by a surge in the so-called decentralised finance sector. "DeFi" often uses its underlying blockchain technology to offer financial services without traditional middlemen such as banks.

Signs that the ethereum blockchain is gaining traction with mainstream financial firms has also fuelled gains.

XRP , the seventh-largest coin, has gained a similar amount. Other once-obscure coins such as dogecoin, started in 2013 as a joke, have also far outpaced bitcoin, with investors drawn to the prospect of quick gains. Dogecoin is up over 5,000% so far this year.

3/OUTPACED BY MEME STOCKS

Retail investors have embraced bitcoin this year, attracted by narratives that it can act as a hedge against inflation and as a future payment method.

Also driving gains has been a perception that it is a vehicle for quick gains - a perceived quality shared by another 2021 financial market phenomenon: "meme" stocks, whose value is propelled by social-media buzz.

GameStop Corp (GME.N) and AMC Entertainment Holdings (AMC.N), two of the leading meme stocks, soared in the first quarter along with bitcoin, fuelled by retail investors with spare cash and free time because of coronavirus stimulus lockdowns.

Yet the assets have since decoupled, with bitcoin's gains for the year so far outpaced by GameStop - up more than 1,000% - and AMC Entertainment, which has surged over 2,500%.

"It's just an extension of free money just going crazy and so I think that has somewhat you can see that rippling over into cryptocurrencies," said Joel Kruger, a strategist at crypto exchange LMAX Digital.

Reporting by Tom Wilson; Editing by Pravin Char

Our Standards: The Thomson Reuters Trust Principles.

More here:
Boom, bust and bewildered: Bitcoin's year so far - Reuters

Posted in Bitcoin | Comments Off on Boom, bust and bewildered: Bitcoin’s year so far – Reuters