Central Banks and Private Banks diversify deposits in managing their foreign exchange reserves. This deposit is a central bank asset that is stored in several reserve currencies such as dollars, euros or yen and is used to guarantee its obligations, namely the local currency issued, and the reserves of various banks held in the central bank by the government or financial institutions.

In terms of currency, the state also has foreign exchange reserves in gold (gold bars and contractual rights to gold bars). Foreign exchange reserves in the form of gold are intended as a buffer for liquidity to support the implementation of monetary policy and fulfillment of obligations in foreign currencies.

The simple idea is that central banks around the world are currently working to maintain a balanced proportion of their foreign exchange reserves to maintain the stability of a country's financial system. Because if they do not buy gold then the proportion of gold in foreign exchange reserves will decrease significantly because they lag far behind the US Dollar they have.

Gold is negatively correlated with US Dollar and it is very beneficial for central banks because they are holders of the US Dollar. By having gold in their reserves, they have a very positive hedge to protect their US Dollar positions.

Bitcoin trading is an unregulated in that it's not under the auspices of the SEC or other regulators, and doesn't have to abide by rules banning fake news designed for pumps and dumps.

Bitcoin can deliver 100% returns to investors in 2020 and may rise significantly in the five months until May’s block reward halving, a new report claims.

In its forthcoming 2020 Crypto Outlook, market research firm Fundstrat Global Advisors said it believed that the halving was not yet “priced into” the Bitcoin price.

Fundstrat expects over 100% BTC gains

The report is currently only available to the firm’s clients, with key findings uploaded to Twitter by co-founder Tom Lee on Jan 10.


Fundstrat continued:

“In other words, we see strong probability that Bitcoin gains >100% in 2020.”

The factors Lee and others identified focus on geopolitical tensions and the upcoming United States presidential elections, in addition to the halving.

Fundstrat took its cue from events last year, noting BTC/USD hit its high point amid tensions around Facebook’s Libra digital currency and negative comments on Bitcoin by president Donald Trump.

Bull catalyst or “non-event”?

As Cointelegraph reported, geopolitical factors form the basis for other commentators’ bullish Bitcoin price scenarios for this year.

As regards the impact of the halving, however, pundits are less united. Last month, Jason Williams, co-founder at digital asset fund Morgan Creek Digital, said May would prove to be a “non-event” for Bitcoin.

Williams appeared to contradict fellow co-founder Anthony Pompliano, who a month previously had claimed that even at $8,750, Bitcoin was yet to have the halving priced in.

https://www.zerohedge.com/crypto/bitcoin-can-gain-100-2020-halving-not-priced-says-fundstrat

Right now, consumers give away their (extremely profitable) personal data to Google in exchange for fast, reliable search results. Dapp browsers open up the possibility for blockchain-based competitors that allow for more equitable arrangements between advertisers and consumers. Eventually, you could even be paid tokenized ad revenue for viewing search results -- rather than Google pocketing that revenue. And you probably would if the search results were good enough, right?

I don't think this is about banks. It's not even so much about cryptocurrencies.

Google is much more threatened by decentralized apps like MetaMask and DTube than anything else. That's the primary takeaway for me. Google's entire model is to monetize the underlying internet infrastructure. Now, the infrastructure is being built to make Google obsolete.

I don't think a big company like google will look for tax loopholes. Don't they already have a lot of money? I do not understand if they want to do this. It seems impossible in my view.  

Google reportedly has $60.7 billion in overseas revenue it has yet to repatriate for fears it would lose too much of it to US taxes, which are set at 35 percent for corporations. That means the money must stay overseas. That arrangement may change in the months and years to come, however, as the new tax bill passed by the House and Senate last month is aimed at pleasing corporations and the wealthy. The new law sets a more generous minimum tax rate on overseas profits and offers companies a less burdensome path toward bringing that money home on a regular basis at greatly reduced rates.

That means Apple, Google, and others may bring more money home, yet still enjoy many of the benefits these tax loopholes have afforded them for decades now. Of course, there is no clear indication that businesses will reinvest that money into domestic manufacturing, hiring, or any other of the intended recipients of the profit windfall being handed to corporate America. Some companies have made strategic use of the PR opportunity to publicly celebrate the tax bill with $1,000 bonuses to employees.

https://www.theverge.com/2018/1/2/16842876/google-double-irish-tax-loopholes-european-billions-ad-revenue

After Youtube recently started taking down cryptocurrency videos, the cryptocurrency community is left to wonder about Google and its views on cryptocurrencies once more.

Though Youtube ultimately ended up saying that its ban of blockchain and cryptocurrency-related videos (including simple tutorials introducing Bitcoin) was an “error” and that all videos would be reinstated, it follows a pattern of hostility towards cryptocurrencies from Google that cannot be ignored.

Start with, for example, Google’s previous ban on cryptocurrency advertising. At the time, Facebook had just banned cryptocurrency advertising as well, meaning the two largest advertising solutions had decided not to offer their monopolistic share of the market to a growing industry — effectively excluding cryptocurrencies from most paid advertising solutions. This ban extended to Adwords solutions on Youtube, keyword searches on Google, and more. Though it was eventually overturned, it showed that Google was watching the space closely and was willing to take quick, harsh decisions based on what they were seeing.

Google then suspended popular Ethereum mobile wallet MetaMask from the Google Play Store, citing “deceptive services” and referring to a financial services policy that among other things, bans the ability to mine cryptocurrency on mobile for Play Store apps and doesn’t allow apps “that expose users to deceptive or harmful financial products and services”.

The MetaMask team appealed the suspension and were turned down almost immediately. Later on, a few days later, Google Play Store reversed that decision without much public explanation — leaving MetaMask to suffer user loss and reputational damage. MetaMask not only serves as a useful digital wallet, it also helps unlock a bunch of decentralized Web3 applications by default (commonly known as DApps), letting users benefit from the decentralized web with little effort on their part. You need a digital wallet to access DApps such as the ones listed here.

The MetaMask team later said the following after the initial suspension: “I very much hope that this was an honest mistake on the part of Google's reviewers, but in combination with all the crypto YouTube bans, it definitely puts me at disease about how Google is engaging with decentralizing technologies. If people accept this behavior from a mobile monopoly like Google, we may not deserve something better.”

Cryptocurrency users can think of many reasons why Google might censor them and the applications they are building. Foremost among them is the fact that many cryptocurrency and decentralized apps go directly against the central business model of Google: capturing digital attention through providing the underlying infrastructure for much of the Web.

This is true from Brave, that while using Chromium, is an alternative browser to Chrome, to distributed video applications such as DTube that are steadily gathering content you don’t have to go to Youtube to browse.

Google has invested heavily in the web as it is built today, served in a centralized fashion from host servers to clients around the world and regulated content when it comes to copyright and other statutes. Asking it to change from that lifeblood towards a more decentralized view of the web through new cryptocurrencies, decentralized applications and protocols like IPFS that flip host-client to a set of flattened peer-to-peer relationships is a bit like asking an oil company to start investing in renewables.

There is also pressure from regulators and legislyyators that Google has to deal with. Its American homebase may have legislators on the fence, though Congressional disapproval of Facebook’s Libra probably did not escape Google’s notice. Less ambiguous is China’s direct and stark directives on cryptocurrencies for its citizens — and Google has proven through Project Dragonfly, a censored version of the Google search engine that was aborted, that it is not above working with the Chinese state to compromise its principles if it means profitability.

Lastly, there are probably people within the company who are split on the matter, and some may lean towards pro or anti-crypto views. With many absorbed in the Silicon Valley ethos, they would have had contact with cryptocurrencies, from Google CEO Sundar Pichai’s son running an Ethereum miner to co-founder Sergey Brin admitting Google wasn’t on the “cutting edge of blockchain” and saying that he and his son, in turn, also mine Ethereum. Yet despite the public views of senior executives, it’s entirely possible that Google employees placed in tactical roles and day-to-day choices on cryptocurrencies might think differently.

It’s clear that Google is acting in a manner that is semi-hostile, at best, to cryptocurrencies, with censorship of key applications, introductory content and advertising options for an emerging technology that might attack its business model and (sometimes) comfortable relationships with legislators. What can be done?

For most developers, the answer will be the standard one: build something better.

Yet, there should be more than that — starting with highlighting why data governance and decentralization matter in the first place and defining what “better” means to the mass of Internet users who don’t really care enough to find out for themselves. Google’s security policies are top-notch, and the company has done well to portray itself as a relatively even-keeled and trustworthy guardian of a trove of user data. However, it is vulnerable in certain places.

Though it currently hosts 92%+ of search volume on the web, technology often shifts rapidly, such as when Chrome took over an exponential amount of volume over Internet Explorer — where in about a decade, it went from 0% usage to nearly 70%, while Internet Explorer made the reverse slide. It could be easy to see how Google might not be as worried about nearest competitor Bing, run through a centralized model from Microsoft they are used to competing with as they might be worried about the much smaller, but more menacing threat of privacy-focused DuckDuckGo.

Google is used to competing with Microsoft, another centralized corporation, by making sure that search quality and infrastructure are up to par — an incumbent advantage Google can maintain almost indefinitely.

But with DuckDuckGo, user demand is intently focused on something Google can’t totally provide and dominate: trust. Trust that Google or any centralized organization will always do right with the data they are being given, trust that now or later bits or bytes might not betray one’s most intimate details to criminal or state-sanctioned oppressors, trust that Google will never have an incentive to broadcast its own content or to censor the content of others for profit.

As it is with DuckDuckGo, so it can be with distributed video, document creation and syndication, and the array of products Google provides. In many ways, the current version of the Internet is a great compromise between users and their eyeballs and the useful services Google provides for that attention. Users accept that their data will end up being used or sold elsewhere for products that save them time and make their lives easier. It is DuckDuckGo and DApps, which question the very nature of that relationship, that represent an existential threat to this model.

Another thread comes up when it comes to the large size of tech giants such as Google. Politicians have spent lots of time trying to confront new Internet realities with old legal frameworks. The truth is that for most end users and consumers of Google products, the traditional anti-trust- monopoly contrast doesn’t quite work because we’re talking about monetizing attention rather than paying for products upfront — so the consumer welfare standard and the exigence of low prices has problems when faced with a model of a giant company looking to provide products for free or near-free monetarily. Many of the costs that might come with concentration of Internet attention and (sometimes) misplaced trust are hard to price, especially in a context where there is no financial price at all for end users.

Yet cryptocurrency builders are facing traditional monopoly problems on the other side of the Google marketplace (Google and Facebook captured 63% of online ad spending in 2017 per a Wharton study) that do conform more closely to traditional anti-trust principles, facing elevated pricing on ads and pricing discrimination or even exclusion of service because there quite simply aren’t very many providers, if any, that can provide the services Google can with advertising beyond Facebook.

If the two coordinate to discriminate against a certain product category, that product category already faces headwinds to succeed. This may not be as politically fraught territory as lowering prices for the average American — but it can be a duopolistic and now anti-cryptocurrency element worth exploring.

A thread that intertwines this all is the amount of political scrutiny faced by Google. Legistators that are pushing hard on Google for dominating data and the Internet may be more amenable to alternative solutions — overcoming some initial skepticism about the cryptocurrency and Web 3.0 movement.

Cryptocurrency and decentralized web advocates should also be wary of how Google responds to a growing trend of data and internet nationalization: either the company will seek to accommodate the stringent demands of different governments in order to get access to balkanized parts of the Internet, or they will seek to ignore those spaces entirely.

Given the profit motive, a combination of the two leaning towards the former for unmissable markets is likely to be the case, meaning that a whole host of centralized nation-state entities (China, Russia and more), some with less checks and balances and pluralism than the United States government, may enter the discussion — to the potential detriment of the cryptocurrency community.

One thing is clear through all of this. The censorship of cryptocurrencies by Google isn’t a one-off event and doesn’t seem very much like an “accident”. It’s a “cold” war at best between two very different visions of the Internet. Google has chosen to contest that new decentralized, peer-to-peer vision rather than adapt to it for now, leaving the potential for future conflict — and censorship — to remain quite high.

https://www.forbes.com/sites/rogerhuang/2020/12/31/googles-censorship-of-cryptocurrencies-goes-way-beyond-youtube/

I foresee one viable option, money is debt and debt is money. the current fiat system has to go. No more paper value, All bank accounts to zero. no more Mortgage, Loans or other forms of debts, nothing to payback, but then what's your 5 bucks gonna get you? For the only way to eliminate the self imploding debt, is to kill the monetary system.

China is poised to launch the first national digital currency. There will be no counting the disruption.  

So is China readying its own Bitcoin? Banish the thought.

It’s far bigger than that. Yes, just like any other cryptocurrency — or for that matter, cigarettes in prisoners-of-war camps — the upcoming digital yuan will be “tokenized” money. But the similarity ends there. The crypto yuan, which may be on offer as soon as 2020, will be fully backed by the central bank of the world’s second-largest economy, drawing its value from the Chinese state’s ability to impose taxes in perpetuity. Other national authorities are bound to embrace this powerful idea.    

Little is known about the digital yuan except that it’s been in the works for five years and Beijing is nearly ready to roll. The consensus is that the token will be a private blockchain, a peer-to-peer network for sharing information and validating transactions, with the People’s Bank of China in control of who gets to participate. To begin with, the currency will be supplied via the banking system and replace some part of physical cash. That won’t be hard, given the ubiquitous presence of Chinese QR code-based digital wallets such as Alipay and WeChat Pay.

It may start small, but the digital yuan can disrupt both traditional banking and the post-Bretton Woods system of floating exchange rates that the world has lived with since 1973. No wonder that for China, “blockchain and the yuan digital currency are a national strategic priority — almost at the level of the internet,” says Sanford C. Bernstein & Co. fintech analyst Gautam Chhugani.  

Ever since the advent of the 17th-century goldsmith-banker in London, the most crucial thing in banking has been the ledger, a repository of irrefutable records to establish trust in situations where it doesn’t exist. When Peter in Vancouver agrees to send money to Paul in Singapore, they’re forced to use a chain of interlinked intermediaries because there’s no ledger in the world with both of them on it. Blockchain’s distributed ledgers make trust irrelevant. Paul devises a secret code, and shares its encrypted version with Peter, who uses it to create a digital contract to pay Paul. A cumbersome and expensive network of correspondent banks becomes redundant, especially when it comes to the $124 trillion businesses move across borders annually. Imagine the productivity boost; picture the threat to lenders.

China isn’t the only one experimenting. Fast, cheap cross-border payment settlement is one application of JPMorgan Chase & Co.’s Quorum, an Ethereum-based platform on which the Monetary Authority of Singapore is running Project Ubin, an exploration into central bank digital money. These are early days, but if blockchain technology shows promise in handling a large number of transactions simultaneously, then digital currencies could become substitutes not just for physical cash but also for bank reserves.

That’s when the game changes. Reserves at a central bank are maintained by deposit-taking lenders. A digital yuan — or Singapore dollar or Indian rupee — could bypass this system and allow any holder of the currency to have a deposit at the central bank, potentially making the state the monopoly supplier of money to retail customers. As Agustin Carstens, the general manager at the Bank for International Settlement, noted recently, “If the central bank becomes everybody’s deposit-taker, it may find itself becoming everybody’s lender too.”

But why would central banks want to demote their own banking systems? One answer, looking at Europe and Japan, is that negative interest rates are doing that anyway. Lenders are starved of profit because while the central bank charges them for keeping money on deposit, they can’t as easily pass on those negative interest rates to their own depositors. If the global economy gets mired in long-term stagnation, official digital currencies will at least be an efficient way of monetary easing without involving banks.

The other, more concrete, reason may be that technological progress is making the status quo untenable. It’s no coincidence that China hastened its national cryptocurrency after Facebook Inc. announced the Libra project, which was touted as an alternative dollar. Perhaps that was fanciful, and the Libra has hit a wall of regulatory concerns. But if they’re offered like Spotify gift cards at the local 7-Eleven, there will be demand for tokens that are acceptable across borders, stable in value against baskets of national currencies, and can be used in global trade and investing. Someone in Silicon Valley will eventually succeed, blowing away the fig leaf of monetary sovereignty in emerging markets in the process.

The changes won’t end with banking and monetary arrangements. Token transactions will be pseudonymous: If the central bank wants to see who’s spending where, it can. Anonymity disappears when cash does. While that will make life difficult for money launderers and terrorists, it could also become a tool to punish political activism. Meanwhile, currency as a foreign policy weapon loses some sting. Pariah states will covet a crypto they can access by circumventing banks that are terrified of flouting Western sanctions. As Harvard University economist Kenneth Rogoff notes, technology “is on the verge of disrupting America’s ability to leverage faith in its currency to pursue its broader national interests.”

A roller-coaster decade — not just for for banking and money but also for privacy and politics — may just be beginning.

https://www.bloomberg.com/opinion/articles/2019-12-29/china-has-edge-over-silicon-valley-to-end-banking-as-we-know-it

You are too funny. So far, there have been many crises so far, and we have all taken steps regarding the supply of fiat money.

all economists know Bitcoin is a scam. No one manages it

Don't be too naive to think that bitcoin can help the whole world prosper! It is the tool to kill those who think like you.

Gambling firms will need to apply for a licence, and will be forced to pay gambling taxes at 29%, - one of the highest rates in Europe."

WASHINGTON, December 19, 2019—Debt in emerging and developing economies (EMDEs) climbed to a record US$55 trillion in 2018, marking an eight-year surge that has been the largest, fastest, and most broad-based in nearly five decades, according to a new World Bank Group study that urges policymakers to act promptly to strengthen their economic policies and make them less vulnerable to financial shocks.

The analysis is contained in Global Waves of Debt, a comprehensive study of the four major episodes of debt accumulation that have occurred in more than 100 countries since 1970. It found that the debt-to-GDP ratio of developing countries has climbed 54 percentage points to 168 percent since the debt buildup began in 2010. On average, that ratio has risen by about seven percentage points a year—nearly three times as fast it did during the Latin America debt crisis of the 1970s. The increase, moreover, has been exceptionally broad-based—involving government as well as private debt, and observable in virtually all regions across the world.

“The size, speed, and breadth of the latest debt wave should concern us all,” said World Bank Group President David Malpass. “It underscores why debt management and transparency need to be top priorities for policymakers—so they can increase growth and investment and ensure that the debt they take on contributes to better development outcomes for the people.”

According to the report, the prevalence of historically low global interest rates mitigates the risk of a crisis for now. But the record of the past 50 years highlights the dangers: Since 1970, about half of the 521 national episodes of rapid debt growth in developing countries have been accompanied by financial crises that significantly weakened per-capita income and investment.

“History shows that large debt surges often coincide with financial crises in developing countries, at great cost to the population,” said Ceyla Pazarbasioglu, the World Bank Group’s Vice President for Equitable Growth, Finance, and Institutions. “Policymakers should act promptly to enhance debt sustainability and reduce exposure to economic shocks.”

The analysis found that this latest wave is different from the previous three in several ways—it involves a simultaneous buildup in both public and private debt; it involves new types of creditors; and it is not limited to one or two regions. Some of the increase in debt has been driven by China, whose debt-to-GDP ratio has risen 72 points to 255 percent since 2010. But debt is substantially higher in developing countries even if China is excluded from the analysis—among EMDEs, it is twice the nominal level reached in 2007.

Those characteristics pose challenges that policymakers haven’t had to tackle before. For example, nonresident investors today account for 50 percent of the government debt of EMDEs, considerably more than in 2010. For low-income countries, much of this debt has been on non-concessional terms, and outside the debt-resolution framework of the Paris Club.

Under the circumstances, policymakers should develop mechanisms to facilitate debt resolution when it becomes necessary, according to the report. Greater debt transparency would also help.

https://www.worldbank.org/en/news/press-release/2019/12/19/debt-surge-in-emerging-and-developing-economies-is-largest-fastest-in-50-years