La Nueva Economía, ¿estas preparado? – Page 2

Mastercard identified nine trends that they believe define the future of payments

By Susana | 26 May, 2023 | Comments 0 Comment

The Future of Payments study identified three specific areas that they believe will define the way we buy, sell and interact between now and the end of this decade and beyond.

Mastercard last month presented its study called The Future of Payments, which explores nine trends that they believe will shape “The Next Economy“.

Within the report they focused on three specific areas that they believe will define the way we buy, sell and interact between now and the end of this decade and beyond. These three areas are: reimagining money, or how the use of money is being redefined by the emergence of non-traditional assets; smart experiences, which addresses the intersection of the physical and virtual worlds; and sustainable futures, which shows how purposeful consumption impacts product design and the value of a company.

That said, the nine trends within each area are as follows.

Reimagining money

Tokenisation: According to the published study, the notion of money continues to evolve to encompass more tokenisable assets, including points, loyalty, data, rights and new currencies. Therefore, extending this technology to real assets will, over the next five years, transform the idea of value and what we use to pay.

Programmable payments: Artificial Intelligence, smart contracts, APIs and other solutions will come together to simplify commercial payments. New ways of programming payment flows will inject efficiency into the economy, they explained, and this will result in reduced operational costs.

Ubiquitous wallets: For Mastercard, the next generation of digital wallets should make it possible to manage our identity and finances, including tokenised securities. They say the “super wallet” of the future will become the command centre of our daily lives, allowing us to access services and payments in any channel.

Smart experiences

Connected finance: Within this point, the study highlighted that just as omni-channel retailing transformed the way we shop, new technologies are expanding the ways we pay in shops, stadiums, stations, metaverse, etc. Thus, the instantaneous ability to access financial services at scale will allow consumers to bank and pay from anywhere and through any channel.

Borderless payments: Payment networks are expected to eventually break down the physical and digital barriers that prevent the exchange of goods, services and data across markets. In this regard, by the end of this decade, Mastercard said that cross-border payment interoperability will be a fact of life.

Acceptance unleashed: POS check-out is undergoing a transformation thanks to new technologies that are multiplying payment options. From Mastercard’s perspective, acceptance options are expected to increase further over the next two years, benefiting merchants and customers in terms of speed and convenience, but also impacting financial inclusion, allowing more people to solve practical issues such as public transport or access to shows and stadiums.

Sustainable futures

Inclusive credit: In the near term, we will see an acceleration of access to credit for the unbanked through banks, fintechs and other digital players, which will drive global economic growth.

Conscious consumption: Consumers will favour companies that are aligned with their ethical, social and environmental principles. They will prefer local companies that meet ESG or Zero Emissions criteria.

Built-in trust: On this last point, due to the rise of fraud and identity theft, the Mastercard study revealed that trust will become the key differentiating factor between companies, with those that earn consumer trust retaining the lion’s share of payment flows.

Source: Cointelegraph

Disclaimer: The information set out herein should not be taken as financial advice or investment recommendations. All investments and trading involve risk and it is the responsibility of each individual to do their due diligence before making any investment decision.

Millennials and Generation Z tend to build a more cryptocurrency-friendly society

By Susana | 16 May, 2023 | Comments 0 Comment

If you are Spanish, this is the classification of generations according to your year of birth:

Baby boom (1949-1968)

Unlike the post-war children, the baby boomers are the largest generation. There are currently more than 12 million baby boomers in Spain. They were the first to live in peace and prosperity after the post-war period.

Generation X (1969-1980)

These are the children of the baby boomers, those born in the 1970s. In Spain they also lagged behind the rest of the Western world due to Franco’s regime and began with the progressive political opening up of the country. They lived through the splendour of consumerism and the obsession for success at all costs. Also known as the EGB generation, they were the first to become familiar with computers as a work tool.

Millennials (1981-1993)

Probably the best known and most criticised generation. Millennials are those born between 1981 and 1993 (or 1996, depending on the organisation consulted). In Spain they represent a population of just over 7 million men and women.

Generation Z (1994-2010)

This is the generation that has taken over from the millennials. They are at most 23 years old and outnumber their predecessors. In Spain there are 7,800,000 boys and girls who belong to this post-millennial generation.

Do you know which generation you belong to?

A study reveals that Millennials and Generation Z tend to build a more cryptocurrency-friendly society.

Bitget published an extensive study on the relationship between demographic changes and cryptocurrency adoption rates across generations. The brokerage examined more than 255,000 questionnaires, with participants from 26 countries and divided into four age groups.

The analysis found that the Millennial generation represents the largest group of cryptocurrency enthusiasts, accounting for 46% of respondents, and concluded that the representation of different groups by public regulatory bodies may define the possibility of social changes favourable to cryptocurrencies.

The survey was conducted between July 2022 and January 2023, involving more than 459,000 respondents, with more than 255,000 contributing responses. As part of the study, information on the fertility and adoption rate of cryptocurrencies in selected countries was correlated with other factors, such as the propensity of residents of selected countries to use blockchain technology and data on the demographics of people who own cryptocurrencies.

Respondents were categorised into generational and age groups: Baby Boomers, Generation X, Millennials, and Generation Z. Among them, Baby Boomers accounted for 19% of respondents, with 8% owning cryptocurrencies.

Generation X made up 23% of respondents, with 25% of them owning cryptocurrencies. Generation Y made up 31% of respondents and 46% of them owned a cryptocurrency, and Generation Z made up 17% of respondents and 21% of them owned a cryptocurrency. The statistics point to an uneven use of digital assets across different age groups, especially in countries with a long-life expectancy and a highly educated population, such as Japan.

The data collected also indicates that Millennials are more loyal to cryptocurrencies, as they are more familiar with the internet and digital technologies, compared to previous generations.

This age group is also starting to build their investment portfolios and sees cryptocurrencies as a good opportunity due to their high return potential, as shown from 2017. It was also observed that Generation Z respondents are fans of modern technologies, being inclined to use digital assets and DLTs, as they do not have any negative experience with financial crises, as they were born after 2008.

Other data collected on behaviour regarding the regulation of digital assets indicates that each passing generation is more interested in their rulers having an equal interest in the regulation of blockchain assets, with a considerable increase in the percentage from 6% to 27% between Generation X and Generation Y, respectively.

This jump can be attributed to the change in value mapping observed in these two generations, especially in relation to changes in technologies, work-life balance issues, diversity and inclusion factors, and a decrease in trust in institutions.

The influence of Baby Boomers and Generation X is likely to diminish, as by 2030 all members of Generation Z will be adults, and the diffusion of blockchain technology in this period could lead to an increase in the percentage of people using cryptocurrencies across all generations.

“The popularity and acceptance of cryptocurrencies varies across different age groups. Through this research, we can better understand the needs and preferences of cryptocurrency users,” he said Gracy Chen, CEO of Bitget.

Analysis of the overall data obtained during the research allows the Bitget team to conclude that population growth in the countries studied is, in general, slowing down.

Combined with increasing life expectancy, there could be a situation of total rejection of cryptocurrencies, blocking innovation and modern technology. However, the declining share of Baby Boomers and Generation X in the total population may be accompanied by processes of unlocking and rehabilitating solutions that benefit society and replacing conservatism with progressivism.

The research findings also suggest that, early in the next decade, demographic processes could lead to a dramatic shift towards greater acceptance of cryptocurrencies, despite the slowdown in population growth.

Source: Periodistadigital / Dailymotion / Cointelegraph

BRC-20: the new tokens that can be issued in Bitcoin

By Susana | 29 March, 2023 | Comments 0 Comment

BRC-20 tokens do not interact with smart contracts like Ethereum ERC-20s.Wallets como UniSat ya permiten emitir y administrar tokens BRC-20.
Wallets such as UniSat already allow BRC-20 tokens to be issued and managed.

BRC-20 tokens are the Bitcoin version of Ethereum’s ERC-20 and are related to the NFT Ordinals technology.

BRC-20 is an experimental mode standard for issuing and transferring fungible tokens on the Bitcoin network. The deployment, issuance and transfer of these tokens is done by means of a JSON data entry. Hence its relation to Bitcoin’s NFT Ordinals.

The creation of this standard is credited to a developer known as Domo on Twitter. On 8 March, the computer scientist announced his progress in this area and acknowledged that it would be difficult for him to take this test any further. For this reason, he preferred to share the project for others to experiment with.

One of the easiest ways to issue and manage these tokens is offered by the UniSat wallet, which CryptoNews reviewed in its most recent update. The wallet allows you to create an entry with the token’s details, such as the name, the acronym that will identify the token, the total amount and the owner.

The registration is stored on the Bitcoin blockchain as part of the transaction that sends the satoshi associated with the owner’s token. Once the registration is created, the token can be verified in any browser with support for NFT Ordinals.

Bitcoin’s BRC-20s vs Ethereum’s ERC-20s

The name BRC-20 is a reference to Ethereum’s ERC-20 standard. However, the two standards differ in several features, especially because of the differences between the networks they run on, Bitcoin and Ethereum.

First of all, Bitcoin’s BRC-20 tokens do not have the ability to interact with smart contracts, while ERC-20 tokens do. Other limitations of BRC-20 tokens versus Ethereum tokens are that they cannot have decimals, cannot be burned or frozen, and cannot have additional functions such as approval or delegation.

Domo has repeatedly emphasised that his idea of BRC-20 tokens should not, under any circumstances, be considered the quintessential Bitcoin fungibility standard.

“This is an extremely dynamic experiment and I am keen to discourage any financial decisions that might be made based on its design. However, what I do want to do is encourage the Bitcoin community to play with the designs and optimisations of the standard, until a consensus on best practices is reached (or we all decide together that this is a bad idea)”.
Domo, developer and creator of the experimental BRC-20 standard

Domo advises people not to spend a lot of money issuing these tokens, which, to him, are worthless. In fact, the developer recommends other tools and protocols for issuing Bitcoin assets, such as Taro, which he says is “unequivocally” a more optimal option for this. Although, as CryptoNews reported earlier this month, a judge in California, US, ordered Lightning Labs to suspend the development of Taro.

Source: CriptoNoticias

The US banking collapse calls into question the discourse against bitcoin and cryptocurrencies

By Susana | 16 March, 2023 | Comments 0 Comment

Since Silicon Valley Bank became insolvent and Signature Bank was shut down, bitcoin has been on the rise.

Bitcoin has risen from USD 19,900 to USD 26,000 in just a few days
Bitcoin glitters in the face of the prospect of systemic risk in the banking system.

Just a few days ago, the commercial institution Silicon Valley Bank filed for bankruptcy. The bank had approximately USD 209 billion in financial assets (mortgage and treasury bonds) and only about USD 175.4 billion in liquid deposits, rendering it insolvent in meeting the withdrawal demands of its users as a result of the banking panic.

Silicon Valley Bank was preceded by Silvergate Bank and followed by Signature Bank. Today, many US citizens and businesses are afraid of not getting the cake that they thought belonged to them, but was only theirs for the taking. A sense of systemic risk pervades the American banking climate.

What you didn’t know about the banking system

Remember the last time you opened a bank account? The aseptic and impeccable atmosphere, the columns and the wood of the gleaming desks, the human decency dressed in suit and tie, and the feeling of being in a cold and comfortable aeroplane cabin.

You felt grown up, grown up, important: it’s your first account or one more of your various bank accounts. It doesn’t matter: that’s why you were there that day, solemn. The business advisor hands you a set of papers, which you sign without paying much attention, savouring in advance the facilities of your new account. And that’s it. You’ve enjoyed its benefits for years.

One day, unexpectedly, your ‘trusted’ bank goes bust, and the bank contact assures you that you will be reimbursed. Months go by, but nothing happens. What happened to your money, to your money, where is your hard-earned money?

Maybe you forgot to read the fine print of the contract you signed. Let me explain: once you deposited your money in that account, it was no longer exclusively yours. It would be technically correct to say that, since then, your money is owned by two people at the same time. You and the bank, or you and an unknown borrower.

Of course, when you check your account, the amount of your savings remains the same. You don’t have a dollar more, but you don’t have a dollar less in your balance either. “What do you mean it’s not mine, when I can see it in my account and withdraw it whenever I want,” you say. Well, that numerical amount you see in your account is a nominal amount; in other words, it’s a figure that represents how much you’ll get when the pie is shared out, not how many pieces you actually have.

In reality, the bank may be shopping with your money. It is likely that, unbeknownst to you, you are financing their business ventures with the money you deposited with them ‘for safekeeping’. That makes you not a customer, not a saver. Put bluntly, that makes you a lender. It turns out that the bank is not doing you a favour; you are doing the bank a favour by lending it money.

That the bank uses your money to buy things is possible because the current financial system allows the application of the so-called «fractional reserve». Through this method of using deposits, banks are not obliged to keep 100% of their customers’ funds in reserves.

This means that if the amount of money that a certain number of customers wish to withdraw is greater than the bank’s current reserves, the bank will not be able to give out everyone’s share of the pie. Someone will be left without theirs: it could be you, someone else, or the bank itself if it decides to liquidate its assets, go bankrupt and pray for a central bank bailout, which inevitably ends up causing currency inflation. Someone always loses.

In your case, you could withdraw your share, as long as the crowd does not think of withdrawing the money at the same time as you. You will be able to take back your share as long as there is no banking panic event.

What about Bitcoin? It has risen more than 20% since the news of the bank run spread, from USD 19,900 to USD 26,000, rejuvenating itself, vampire-like, with the blood of traditional banking. Other cryptocurrencies are also accompanying the bullish rally, being possible to observe, temporarily, a de-correlation of these with banking stocks and indices. This is a very different story to that of banking shares, with losses of up to 60% in a matter of hours.

Origin of the fractional reserve

The origin of the fractional reserve can be traced back to the birth of the first banks to issue paper money. These banks, which were founded in 1609, issued their own coins to be used as currency.

Thus, in the mid-19th century, the printing of currency by banks led thousands of institutions to start issuing banknotes, giving rise to the existence of more than 8,000 different types of banknotes issued by private banks and companies. A practice which, when the bank failed, took its depositors with it. Thus, losing everything. This situation later led to a crisis that lasted from 1837 to 1843.

This crisis forced the rulers to adopt a new system that would guarantee a backing for the banknote, as well as stability and reliability so that the banknote could be used. This led to the creation of central banks. These banks were created with the intention of backing the currency they issue, and they are therefore the only ones that can issue it. Thus, they were the ones who had to respond to the value of the banknote.

In this way, they also introduced the fractional reserve system which, in the final analysis, made the central bank responsible for answering to the depositor.

How can the bank make the fractional reserve?

The bank has a number of products that, depending on the customer, serve to store, accumulate and make a customer’s savings profitable.

Among these products, the bank has, for example, products that, like the fixed deposit, keep the saver’s capital in the bank in exchange for a return on the capital, which we call profitability.

In this way, the bank pays this return to the saver, in exchange for a commitment in which the saver lends his or her capital to the bank, which must give a return for ceding it to third parties. All this, guaranteeing the reserve that, by law, they must have in their coffers.

Furthermore, the bank is only obliged to keep part of its current accounts in cash. That is why, if we go to the bank and claim a large sum of money, they tell us that we will have that money available in a few days. In other words, they don’t have it in physical form.

Source: CriptoNoticias

Disclaimer: The views and opinions expressed in this article are those of the autor Paulo Márquez and do not necessarily reflect those of CriptoNoticias or EurocoinPay

Exchange platforms and bitcoin cashiers: who’s who in the Spanish cryptocurrency universe

By Susana | 14 March, 2023 | Comments 0 Comment

Some eight million people invest in digital currencies and enjoy the services offered by more than 120 companies linked to this sector in Spain.

Little by little, cryptocurrencies have made their way into the finances of Spaniards. According to a report by the Bank of Spain, these digital currencies moved a transaction volume of 60,000 million euros in 2021 in Spain alone. That is, around 1,275 euros per inhabitant. With these figures, Spain is the fourth country with the highest amount of exchanges with digital currencies, only behind Germany, France and the Netherlands.

The ‘activos’ has selected 33 companies, some of which are registered in the Bank of Spain’s register of crypto service providers and others that are just as well known, but do not appear in the document. Among them are exchange platforms, bitcoin ATM providers and companies that allow you to receive your salary in cryptocurrencies. It should be noted that the registration of a company on this platform only demonstrates that it has an adequate structure to comply with the law on the prevention of money laundering, but in no case does it imply supervision by the agency. This register, which has been in force for a year, has 43 companies and has not added new names since November 2022, when the FTX scandal broke after its bankruptcy

A SECTOR ON THE RISE

The use of cryptocurrencies has been on the rise since 2018. In the last four years, according to BBVA, their use has soared 900%. The market capitalisation of digital currencies exceeds 2.5 trillion dollars, according to the International Monetary Fund (IMF), and it is estimated that there are more than 350 million users worldwide. There are more than 10,000 virtual currencies worldwide, a number that is growing all the time. The most important are: bitcoin, ethereum, cardano and solana.

In Spain, it is estimated that there are more than 120 companies linked to the world of cryptocurrencies, some of which were born in the country and others are subsidiaries of foreign companies. In total they employ around 1,100 people, according to the latest Guide to crypto companies prepared by the CryptoPlaza community.

If we look at the investment sphere, there are eight million people in Spain who prefer cryptocurrencies to other types of assets, many of them young people.

The new digital reality means that the financial sector must continue to address medium-term challenges, such as “the popularisation of cryptoassets”, as recently stated by the governor of the Bank of Spain, Pablo de Cos, “to promote their sustainability in the medium and long term”.

The regulation of cryptocurrencies in the European Union (EU), the Market in Cryptoassets Regulation (MiCA), could come into force as early as 2023.

Source: el Periódico de España

Regulation as a response to cybercrime

By Susana | 7 March, 2023 | Comments 0 Comment

The creation of regulations that allow interconnection between different national and international agencies is part of the solution to a cross-border problem such as cybercrime.

Cybercrime is one of the concerns that most surrounds the crypto market, therefore, Chainalysis shows data that leads to the conclusion that regulation is part of the solution to the problem. The Office of Foreign Assets Control (OFAC) in the United States, as well as other similar agencies in other countries, have been able to help reduce these criminal activities.

For the report on criminal activity that developed in 2022, Chainalysis took into account what has surrounded a widespread problem in the crypto world: Cybercrime.

In this globalised era, the millions of users that converge on the internet are an inexhaustible pool of possibilities for committing cybercrime. In this sense, phishing, ransomware, malware and money laundering are some of the most common crimes.

Despite this, Chainalysis data shows that criminal activity in 2022 increased by 100% during 2022, constituting more criminal activity recorded on the Blockchain.

Evolution of criminal activity on chain – Source: Chainalysis

Despite these numbers, there are also other interesting data to highlight from the report, in this case the joint action of agencies such as OFAC that have allowed blockades to be imposed on institutions, individuals or groups that engage in these criminal activities and that have been fully identified.

In this regard, the report shows how OFAC’s efforts have been paying off since 2018, when it first sanctioned two Iranians, who were directly linked to the SamSam ransomware. At that time, they were added to the list of blocked persons and Specially Designated Nationals (SDNs).

Since then, a number of cryptographic addresses have been part of this list, blocking the addresses associated with these individuals, which in 2018 was estimated to be two addresses per person, by 2019 about four and by 2020 about 9 per person.

Sanctioned cryptographic addresses – Source: Chainalysis

However, by 2022, it is estimated that around 35 addresses per person are used for criminal activities associated with cryptocurrencies. In addition, OFAC was able to find that in some cases, more than 100 addresses were associated with the same entity/group/person.

Specifics of how joint regulation prevents further criminal activity

The reasons for these conclusions are exemplified in three specific cases, Hydra, Garantex and Tornado Cash. The first was a platform of the deep web (or dark web) as it is known, in which illicit trade was the basis of the platform. Offering both products and services, ranging from illicit sales to money laundering through cryptographic services.

Because Hydra’s servers were located in Germany, international collaboration was possible, and so OFAC’s joint action with its counterparts in Germany was able to coordinate efforts and take over these servers, so that the dark web service ceased, and with it the cybercrime.

Second, the Garantex experience is a clear example of the problems that can arise when there is a lack of international cooperation. Despite the fact that Garantex has remained largely isolated from the compatible exchange ecosystem, Russia refused to impose sanctions against the service, allowing it to continue operating without restrictions. This situation demonstrates how difficult it is to sanction entities whose home jurisdictions do not have formal channels of cooperation with OFAC for example.

On the other hand, the case of Tornado Cash presents an even greater challenge. Although its front-end website was taken down, its smart contracts are still operational, meaning that anyone can technically use them at any time.

In this case, sanctions against decentralised services act more as a tool to disincentivise use of the service rather than to cut off use altogether. Although Tornado Cash is a blender, and blenders become less effective the less funding they receive overall, the sanctions have been effective enough to reduce its revenues by 68% in the 30 days following its designation.

These cases illustrate how OFAC and other sanctioning agencies can address sanctions designations against different types of cryptocurrency-related entities. It is important to continue to improve the ability of these agencies to effectively enforce sanctions, working in conjunction with other agencies both in the United States and internationally. As these techniques evolve, it will be interesting to see how sanctions agencies continue to adapt to changes in the cryptocurrency landscape.

Overall, illicit addresses sent nearly USD 23.8 billion in cryptocurrencies in 2022, an increase of 68% over 2021. As is often the case, major centralised exchanges were the main recipients of illicit cryptocurrencies, receiving just under half of all funds sent from illicit addresses.

That is notable, not only because these exchanges generally have enforcement measures in place to report this activity and take action against the users in question, but also because these exchanges are fiat exit ramps, where illicit cryptocurrency can be converted into cash.

Thus, with data as compelling as these, it is necessary to emphasise that uniform regulation in all countries is more than an instrument, it is a necessity, because only through these instruments can we have greater security in the actions of specialised security agencies.

To achieve greater online security, it is important to further improve cybersecurity infrastructure and technology, and to educate the general public on how to detect and avoid online threats. Greater cooperation between authorities and cybersecurity companies should also be encouraged to jointly combat online crime.

Cybercrime remains a major threat to society, and although the rate of increase is not significant, it is important not to let our guard down and to continue working together to ensure greater online security. Reality shows that cybercrime will be increasingly present in everyday life, and it is up to users, businesses and governments to combine efforts so that despite this, criminal activity in cyberspace does not continue to increase.

Source: Cointelegraph

Are we facing the end of cryptocurrencies? Listen to what the experts consulted on the radio programme Mediodia COPE have to say.

By Susana | 23 February, 2023 | Comments 0 Comment

The bankruptcy of FTX, one of the largest cryptocurrency exchanges, wreaked havoc on cryptocurrencies

This bankruptcy dragged down cryptocurrencies, leading the largest of them all, bitcoin, to accumulate a loss of 77% in the last year.

Is this the end of cryptocurrencies? It is possible, but unlikely. The crypto market is the youngest, most volatile, least known and most risky, which makes it difficult to compare with others. Last year’s drop, which Bank of America considers the fifth largest in history, is only the fourth largest drop in bitcoin in the last decade.

Cryptocurrencies are legal almost everywhere in the world, except in six countries, and are increasingly regulated and widely adopted by citizens, businesses and governments. Around 20 banks worldwide, almost all in the Americas and Europe, hold some $10 billion in cryptos.

The international body that sets solvency standards for banks worldwide, the Basel Committee on Banking Supervision, does not ban cryptocurrencies, but recommends limiting their exposure to 1% of their capital.

Moreover, they represent an opportunity for two billion unbanked people to access financial services and for people in countries in crisis to safeguard their funds.

Another fact to bear in mind is that 60% of cryptocurrency holders are under 30 years old and more and more organisations and companies around the world are accepting them to pay for goods, services, payroll or taxes.

On Mediodía COPE on 30/12/2022, several experts were consulted on the situation of the crypto market:

Herminio Fernández, CEO of EurocoinPay, believes that the crisis that cryptocurrencies are suffering at the moment is a readjustment of the crypto market.

The future of cryptocurrencies may seem uncertain, but it has solid foundations. The bad news could reflect a cleansing process of a crypto market that has grown too fast, as happened with the dotcom bubble.

What if this is not the end of cryptocurrencies, but just the beginning?

What do you think?

Source: Cope.es

Treasury delays the obligation to declare cryptocurrencies until 2024

By Susana | 4 January, 2023 | Comments 0 Comment

According to sources familiar with the matter, the postponement is due both to the frenetic activity of the last few months in tax matters and to calendar reasons.

The Ministry of Finance has decided to delay until 2024 the new reporting obligations on virtual currencies, a declaration that will affect balances and activities produced in 2023. All of this, explain sources from the department headed by María Jesús Montero, “without prejudice to the information already required on cryptocurrencies in the current tax return forms”, such as that relating to personal income tax (IRPF).

“The publication of the ministerial orders whose approval depends on the publication of the Regulation for the development of Law 11/2021, of 9 July, which is currently being processed, is still pending”, these sources explain. Therefore, in view of the regulatory timetable, the new reporting obligations on cryptocurrencies “will not be enforceable until 2024, with respect to 2023”.

The forms affected by this extension are 172, 173 and 721, which will be used respectively to declare balances and transactions in Spain and the holding of cryptoassets abroad. They are the method chosen by the Tax Agency to monitor all agents involved in the cryptocurrency chain: creators, exchange agencies, virtual wallets, exchanges and wallets, key custody services, suppliers and other companies and operators in the sector.

According to sources familiar with the matter, the delay is due both to the frenetic activity of the last few months in tax matters and to timing reasons after the Council of State, when evaluating the regulation, requested a report from the Data Protection Agency to analyse the impact of the models. For the time being, “it does not seem that the Data Protection Agency is going to ask for changes”. The Council of State could request changes, although this is not expected to happen for the time being.

Other experts consulted see more reasons. Emilio Pérez Pombo, tax advisor and economist, acknowledges that the Treasury is “overwhelmed” by all the activity of the last few months. However, he also believes that the ministry has realised that the models drafted “demanded information that made no sense or that was even impossible for operators to know”. Information should be requested, “but with a much lighter and more reasonable level of detail, in line with the nature of cryptoassets”, he adds.

If it remains as it is drafted, the draft “requires a great deal of information”, says Raquel Jurado, a tax advisor at the General Council of Economists specialising in these assets. For this reason, she adds, it is preferable for everything to be published in time for next year.

Models

The Treasury already presented its proposals for the aforementioned models on the public hearing portal in June. These drafts demanded a considerable amount of information from taxpayers with the aim of “improving the fiscal control of the taxable events that may arise” from the holding and operations with cryptocurrencies. However, months went by and the definitive publication did not appear in the Official State Gazette (BOE). The Treasury confirms that it will not appear in tomorrow’s BOE, the last of the year, so the obligations will be delayed for at least another year.

Forms 172 and 173 will be used to declare balances and transactions with cryptocurrencies to the Treasury. Those companies that are tax resident and that are participating in the sector by creating coins, providing safeguard services for cryptocurrency keys or services that connect with another activity will be obliged to file the declaration. Also, those companies that are exchange or digital money agencies or those that, on behalf of third-party companies or individuals, hold, store or transfer virtual currencies. In short, those individuals or companies that are resident in Spain and that participate in the sector, regardless of where the services are provided or where the virtual currencies or their holders are located.

Form 721, inspired by Form 720 for the declaration of assets abroad, obliges taxpayers to declare the virtual currencies they hold outside Spain. It will affect individuals who operate with cryptocurrencies beyond the border, but also beneficiaries, authorised persons and authorised agents.

The declarants, broadly speaking, will have to leave a record of their tax identification, information that will also be extended to the declarant. Among other points, it will also be necessary to report the public key or address with which the declarant’s electronic wallet is identified, the type of virtual currency, the number of units at the beginning and end of the specific period, the value of the cryptoassets and the balance at 31 December included in the public key.

Income

This extension, however, will not affect personal income tax returns for cryptocurrencies, which remain in force. The 2021 income tax campaign has already brought to light specific data on the amounts that cryptocurrencies move in Spain, as well as their presence in the market. According to data from the Tax Agency, almost 35,200 tax returns included gains derived from operations with virtual currencies, amounting to more than 759 million euros. In parallel, in wealth tax, a total of 1,275 declarants incorporated €911.9 million as the balance of their cryptocurrency portfolios at year-end.

Source: cincodias.elpais.com

Macro-survey: Do cryptocurrencies have a future?

By Susana | 28 December, 2022 | Comments 0 Comment

The crisis suffered this year is so deep that it has raised warnings of a ‘crash’ in the crypto market. The experts consulted, however, see it clearly. They have a future, but a very different one from the past.

“One year in the crypto industry is equivalent to seven in any other. The financial year that is about to end supports this recurring warning from analysts. From the crypto market’s point of view, 2022 has been the antithesis of 2021. The falls have been exceptional, and not only because of the scale of the losses. Many investors, who have not been involved in traditional markets and who jumped into digital assets in the heat of the 2021 rally, are experiencing their first market crash, a new situation that is difficult to digest.

The scale of the falls also raises the level of tension. In little more than a year, the combined capitalisation of cryptocurrencies has plummeted from the three trillion dollars it reached with the historical records of November 2021 to the current 800 billion dollars. The bursting of the bubble has volatilised more than two trillion dollars.

The biggest cryptocurrency, bitcoin, has plunged more than 60% with one week to go until the end of the year. And the storm has not yet dissipated. The trigger for the latest falls, the collapse of one of the world’s largest crypto platforms, FTX, is recent. Fears of a contagion of the crisis and the collapse of new companies in the crypto universe have triggered investors’ risk aversion.

Experts agree that crises such as those of FTX and the problems experienced by other entities in the sector prevent a rapid recovery of the market. On the other hand, the prolonged digestion of this crisis is creating precisely some of the necessary foundations for a future market upturn.

New investor profile

The crisis has substantially changed the average crypto investor’s profile. In the midst of the bullish rally, until November 2021, most investors jumped into the digital asset market with an eminently speculative nature, with the aim of reediting returns of three and even four digits, practically unattainable in any ‘traditional’ asset.

In little more than a year bitcoin, ethereum and the rest of the cryptocurrencies have gone from generating weekly returns of up to 100% to generating annual losses of more than 60%. This substantial change has caused a “cleansing” in the market of the most short-term profiles.

Investors, also conditioned by accumulated losses, are taking a more long-term view, and ‘withdrawing’ a record number of bitcoins from the market due to their strategy of holding on to their portfolio. Joaquín Robles, an analyst at XTB, reminds investors that “investors should not take past returns as a reference, as they were largely the result of an unjustified speculative movement”.

Regulation

The collapse in record time of one of the largest crypto trading platforms, FTX, has put to rest a long-standing debate as to whether regulation would be a threat or a necessary boost to the market. Supporters of the second option are now winning by a landslide.

From an investment perspective, Mirva Antilla, an analyst at WisdomTree, says that “it is very clear now that the industry needs to be regulated“. The same statement is echoed by crypto companies. Lukas Enzersdorfer-Konrad, Deputy CEO of the Bitpanda platform, is quick to point out that the new European regulation, MiCA, “will be the next big step in the right direction, as it will streamline regulation and supervision in the EU and hopefully mitigate some of the chaos”.

While awaiting the effects of its implementation in the future, Pablo Valverde, co-founder of the Crowmie tokenisation platform, already sees a positive impact. Regulation, he explains, “allows crypto projects to become more established in society”, “because if a government regulates them, it is in fact accepting them, in one way or another, for the future of its country”.

The upheaval resulting from crypto regulation could come sooner than expected. In 2023, with MiCA and pilot regime regulations and transpositions in each country, Marcos Carrera, Blockchain expert at consultancy firm Grant Thorton, warns that “we may go from 0 to 200 in a few weeks”.

More fraud control

The experience of what happened with FTX and the increased regulatory zeal of the authorities will in turn lead to a sifting of the market. Crises like the one experienced this year can be dramatic for investors, but as Carlos Gomez, CIO of Belobaba Crypto Asset Fund, points out, “they also bring with them a cleansing of the market of many speculative and fraudulent players”.

“The crypto community is becoming more and more educated and aware of scams, just as pyramid scams were finally extinguished when the internet appeared in 2000”, stresses Alejandro San Nicolás, Blockchain expert and professor at the International University of Valencia (VIU).

Along the same lines, Belobaba’s head of investment highlights that internal risk management controls in the crypto industry will regain a relevance that has not been so closely monitored in recent times. Carlos Gómez predicts that “the year 2023 will be positive for the ecosystem as founders and project finance funds will become more aware of the need to build solutions to real problems, and hedge funds will (hopefully) learn to implement better risk management practices by minimising excessive leverage and low diversification”.

Greater risk control and a more selective and less speculative approach by investors are two of the factors on the rise. Gerard Bernal, CEO of the cryptobank VanQ, stresses that “the future will be the immediate present if we forget about the buck and start to consider cryptocurrencies as a container that must contain valuable content“. The more speculative temptations could be overthrown, he adds, by the growing prominence of, for example, “real digital assets”, which can be “simply a stake in a larger property, such as a real estate (or set of real estate) or a private company”.

Tokenisation is one of the broad growth avenues for the industry most pointed to by experts, as is the metaverse, or decentralised finance (DeFI), a field that not only poses a threat to the traditional financial industry. It also represents a potential source of collaboration. José Luis Martínez Campuzano, spokesman for the Spanish Banking Association (AEB), suggests that, under the umbrella of a regulatory framework, a future involvement of banks “could help to improve control and risk management practices in the ecosystem and provide more confidence”.

Investment opportunity

The experts stress in particular the attractiveness and transformative potential of the crypto universe due to its multiple uses. But neither do they overlook its potential attractiveness as an investment asset, albeit under different parameters to those prevailing until the bubble burst. After the current crisis, the widespread adoption of digital assets could still take between five and seven years, according to Manuel Villegas, an analyst at Julius Baer. Nevertheless, he makes it clear that “the disruptive potential of blockchain technology has not been impacted by this year’s crisis”.

From a more investment point of view, a number of experts recently agreed on a possible floor for bitcoin at the $13,000 level, compared to the current $17,000 level.

A possible catalyst in 2023 could be the halving of bitcoin, the reduction in the pace of issuance, expected in 2024 but whose effects on price levels could be brought forward to the point of opening the door to a “new bull cycle” between 2023 and 2025, according to Alberto Gordo, co-founder of Protein Capital. To do so, it must first confirm the end of the current downward cycle.

In this macro-survey conducted by Alejandro Sánchez and published on 23 December 2022 in Expansión, the leading multichannel brand of national and international economic information on markets, investment, companies, economy, employment, legal, executives and lifestyle, one of the respondents, Herminio Fernández, our CEO of EurocoinPay®, made clear his vision of cryptocurrencies and their future.

“Cryptocurrencies are the hardest substance in the universe”

Herminio Fernández, CEO of EurocoinPay®

For twelve years cryptocurrencies have been on an incredible journey. Knowing what will happen in the next twelve years is not easy, but they will certainly prevail, says the CEO of EurocoinPay®, who lists a number of factors that dispel doubts about the future of the crypto industry. “Major players such as MasterCard are beginning to adapt cryptocurrencies, the S&P Dow Jones indices are producing reflection points for them, and the largest Wall Street firms have indicated that they will be active participants in these markets. We’ve seen institutional interest grow, the EU is betting on regulation through MiCA regulation, and the US and its regulators are on how much regulation they will apply.” For all these reasons, he says, “it is clear that cryptocurrencies are worth taking seriously”. The challenges for cryptocurrencies centre on issues such as whether they consume a lot of electricity, the speed of transactions and cybersecurity risks. Looking ahead, “cryptocurrencies that are created with cryptocurrency is the hardest substance in the universe”, and although “adoption of this technology is at 3%”, “people will at some point realise that they have more to lose by not embracing this technology than by embracing it”.

Read the full article in Expansión

Source: expansion.com

The number of CNMV warnings about “financial beach bars” in Spain has increased eightfold in recent years

By Susana | 15 December, 2022 | Comments 0 Comment

More than 400,000 Spaniards have fallen for digital currency scams, 90% through advertisements posted on social networks.

ETF Corp, AllCrypt Capital and Trading Business Academy are some of the 309 warnings issued by the National Securities Market Commission (CNMV) about unregistered entities (financial beach bars) up to October this year (latest available data). In the last four years, the number of warnings about “financial beach bars” in Spain has multiplied by eight and practically all the companies included in this blacklist have a common link: they are dedicated to cryptocurrencies.

In the absence of regulation to protect investors, and even in the absence of supervision by monetary authorities such as the Bank of Spain, cryptocurrency platforms are proliferating on social networks. And it does not seem that cases such as FTX or the more recent Binance will stop this trend. They have already caused fraud losses to more than 400,000 Spaniards and 90% fell into the trap precisely through the networks, according to EurocoinPay, a platform registered with the Bank of Spain for buying and selling electronic currencies. It is worth noting that cryptocurrencies moved 60,000 million euros in Spain in 2021, a figure that corresponds to 4.8% of GDP, according to data provided by the Bank of Spain itself.

If in 2018 the CNMV alerts amounted to 63, in line with previous years, in the following years these warnings exceeded 300. From the regulator they point out that the financial beach bars now offer cryptocurrencies “because they are fashionable”. “Before, they sold commodities,” they say. Their secret has been to use social networks to reach more people. “The cost of advertising on social networks is much cheaper,” explains Darío García, an analyst at XTB. The CEO and co-founder of EurocoinPay, Herminio Fernández, states categorically that “social networks are a total fraud”. “Right now, on social networks, every 14 advertisements there is one fraudulent one”, he says.

And the fact is that 90-95% of scams do not come from official companies, but from people who impersonate other companies or individuals recognised on social networks. This is why their advertisements are so credible. Moreover, at the beginning, in 2018, they were mainly aimed at the younger and generally less informed segment. Today, the profile of the cryptocurrency investor is a male between 26 and 40 years of age, who uses social networks and the internet intensively, and chooses to invest less than 5% of his capital. “The danger nowadays lies” in this age group “because the scams are more sophisticated”, says Herminio Fernández.

Currently, both Facebook and Twitter maintain a very strict policy on cryptocurrency advertising, but if the platforms are able to legally bypass the restrictions due to the lack of regulation, neither social network can prevent ads for these assets. “Social networks are so guilty that they even have some moral responsibility”, says XTB’s Garcia, “but they are not to blame.” “The crypto world is not a fraud, but the companies that operate in the name of cryptocurrencies are the ones that are committing scams,” he adds.

Late and incomplete regulation

Beyond the frauds that materialise every day on social networks, cryptocurrency scams are shaking the foundations of some of the most important cryptocurrency exchange platforms. Up until now, the biggest failure has been that of FTX, a bankruptcy caused by massive customer fraud and money laundering perpetrated by its CEO, Sam Bankman-Fried, who has now been arrested. But the reality is that since the beginning of November all cryptocurrencies, such as bitcoin and ethereum, have been falling on the stock market, and an investigation by the US Department of Justice into Binance and its CEO, Changpeng Zhao, has come to light.

In the case of FTX, what began as a liquidity crisis in early November due to Binance’s refusal to bail out the platform, ended in a bankruptcy that left an $8 billion hole and $3 billion in debt. Its CEO, Sam Bankman-Fried, had been hailed as the ‘wonder boy’ of cryptocurrencies and FTX was once valued at $32 billion. And Binance had $60 billion in assets until today, according to Nansen data, when its investors withdrew $1.6 billion after the US investigation against it became known. In total, some 30 million people have relied on Binance to exchange digital currencies.

The forecast is that other digital currency platforms will fall in the coming months: “If there are audits due to the MiCA regulation, there will be a very important sifting of platforms because not all of them have real backing for the investments they make,” says Herminio Fernández. The president of the CNMV a few weeks ago, Rodrigo Buenaventura, said a few weeks ago about this sector that “the least socially useful part is all this kind of collective phenomenon around what will be the next cryptocurrency to make a splash“, because for him “it contributes nothing to Spanish society”.

In the wake of these latest scandals, European Central Bank (ECB) president Christine Lagarde has urged the European Union to “swiftly implement” the world’s only ongoing cryptoasset regulation, the Market Regulation for Cryptoassets (MiCA). “Its implementation will take a few months, if not a couple of years, unfortunately,” he said. It is a regulation that began to be discussed in September 2020, but whose approval by the three European institutions (the European Commission, the European Parliament and the European Council) has been delayed until just a few weeks ago, and also contemplates an adaptation period that will delay its entry into force in a practical way.

In any case, Lagarde has clarified that the MiCA “can only be a first step”, as there are some gaps around the protection of users. For example, it is still not very clear how ‘cold wallets’ will operate, i.e., when the investor or client has their own cryptocurrencies and protects them with public keys, something that all experts have called for. For Darío García, “regulation is long overdue and is aimed at the financial sphere, not the legal sphere“, because “for now only the fiscal sphere can be regulated”.

When the regulation is activated on 13 February 2023, “it will be particularly important that the services provided comply with the services determined by MiCA, so that the custody requirements are fully met, in which there must be a 1:1 backing of the cryptoassets deposited by customers”, explains Alfonso Ayuso, head of the Cryptocurrencies and Blockchain vertical of the Spanish Association of Fintech and Insurtech, the Spanish Association of Fintech and Insurtech. Even so, Herminio Fernández reminds us that “the world of crypto was not born to be regulated in an extreme way“. “The blockchain is a blessing for the world, but governments have to regulate it”.

Source: el Periódico de España/activos

Repercussions of the article in other media: