Seeds of Wisdom RV and Economic Updates Friday Afternoon 11-29-24

30/11/2024

Good Afternoon

BRICS NEWS: BRICS DETERMINED TO TRADE IN LOCAL CURRENCIES, NOT US DOLLAR

The BRICS alliance is determined to trade in local currencies and not the US dollar for cross-border transactions. The US dollar is seen as an adversary that hinders their growth in the global financial sector. Local currencies are seen as an alternative option that can bring the hegemony of the USD down.

BRICS: Local Currencies First & Not the US Dollar

Similar to the phrase ‘America First‘, the BRICS bloc is now emerging to make ‘local currencies first’. The bloc is pulling every trick up its sleeve to sideline the US dollar for cross-border payments. From oil deals to copper trade and infrastructural loans, the alliance is aiming to push local currencies for settlements.

Many other developing countries are keen on joining the bandwagon and could soon jump on the de-dollarization train. Several nations in Africa are on the sidelines and could seek the help of BRICS to put their local currencies to use.

The move will strengthen their native economies and make businesses thrive. It will also provide a way for their local currencies to make a mark in the currency markets.

@ Newshounds News™

Source: Watcher Guru

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BRICS NEWS: 2 COUNTRIES OFFICIALLY ABANDON THE US DOLLAR FOR TRADE

BRICS members Russia and Iran announced that they have officially abandoned the US dollar for trade between the two nations. Russia reported that 96% of all cross-border transactions between Iran have been settled in local currencies, the ruble and rial. In 2024, the usage of local currencies between Russia and Iran is up by 12.4%, making 96% of all settlements.

“We (BRICS members Iran and Russia) have entered into a currency agreement with Russia and fully removed the US dollar. Now we only trade in rubles and rials,” said the Governor of the Central Bank of the Islamic Republic, Mohammad Reza Farzin. However, both nations face sanctions as the White House has made it difficult to accept the US dollar.

In July this year, both the BRICS countries agreed to a currency swap policy signed by the Russian and Iranian central banks. They also completed the integration of Russia’s Mir payment as a replacement for the SWIFT messaging system and the US dollar. Russia also allowed Iranian citizens to withdraw the rial in ATMs across the country.

BRICS: Russia & Iran Sidelines the US Dollar, Trades in Local Currencies

While the US pressed sanctions on BRICS member Russia to weaken its economy, the Kremlin is bypassing the sanctions by convincing other countries to ditch the US dollar and begin using local currencies. The de-dollarization initiative is growing and many developing countries are now eager to join the bandwagon.

@ Newshounds News™

Source: Watcher Guru

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TAIWAN ENFORCES AML REGISTRATION MANDATE FOR CRYPTO PROVIDERS

Taiwan accelerates its crypto AML mandate, imposing stricter registration rules and penalties for noncompliance.

Taiwan advanced the introduction of its new Anti-Money Laundering (AML) regulations for cryptocurrency businesses after authorities fined two crypto exchanges for violations.

On Nov. 27, the Financial Supervisory Commission (FSC) announced that the upcoming money laundering prevention registration mandate for crypto exchanges was shifted to Nov. 30 from the previous Jan. 1, 2025 deadline.

Per the previous notice, virtual asset service providers (VASPs) failing to register with the government could be subject to a two-year prison sentence or fines of as much as 5 million New Taiwan dollars ($155,900).

The new mandate includes previously registered crypto businesses

According to Taiwan FSC records, 26 crypto providers are currently approved to continue to offer their services. All crypto entities, whether previously registered or not, must register in accordance with the new AML mandate. The authority said:

“No business operators have completed the Money Laundering Prevention Registration under the VASP Registration Measures.”

The authority provided a checklist of items crypto exchanges can use to track suspicious transactions or activities. When identifying suspicious customers, crypto service providers must look for names and bank account details, location via IP addresses, multiple trading accounts and frequent information changes, among other things.

Crypto exchanges in Taiwan were also asked to track unusual transaction activities, including but not limited to splitting funds, utilizing multiple accounts with the same IP address and switching assets.

Cracking down on crypto exchanges violating AML laws
According to a Regulation Asia report, the FSC fined crypto exchanges MaiCoin and BitoPro on Nov. 28 for AML violations in relation to customer due diligence (CDD), transaction monitoring, record-keeping and suspicious transaction reporting.

To register with Taiwan’s AML regulation, crypto service providers are required to submit a one-page form detailing the nature of their businesses.

The form states that any changes to the business or the information provided should be provided to the Securities Over-the-counter (OTC) Trading Center within five business days.

Crypto businesses will also be required to establish a quality management system for accounting and auditing their finances.

@ Newshounds News™

Source: CoinTelegraph

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RETAILERS PUSH FOR A DELAY IN ROLLOUT OF RUSSIA’S CBDC

In October the Bank of Russia revealed a time frame for the roll out of the digital ruble, which forms part of a Bill that has been submitted to the State Duma. The mass rollout date is 1 July 2025. By that time the largest banks and retailers must support the central bank digital currency (CBDC). Now the Ministry of Industry and Trade has asked for a longer timescale of up to two years, similar to that provided to smaller retailers, the Izvestia newspaper reported.

The 1 July deadline applies to retailers with a turnover of more than 30 million rubles ($274,000). Those with incomes between 20 to 30 million rubles have one extra year, and smaller firms have two years.

The Ministry complained that there are still no rules for the operation and functioning of the digital ruble, so it doesn’t allow sufficient time for retailers to prepare and for adapting their point of sale software.

Trade bodies agree. “We believe it is necessary to refrain from legislatively establishing specific deadlines for launching systems at the trade level and to provide for a transition period of at least two years, during which companies will carry out the necessary work,” a letter from the Retail Companies Association (ACORT) states.

Another industry body, the Association of Internet Trade Companies (AITC), has similar views. It said, “The absence of such important provisions does not give businesses the opportunity to assess the costs of implementation time, the necessary human resources, expenses for the company, and also to understand to what extent companies are ready to implement such payments.”

The main benefit of a CBDC for retail outlets is reduced acquiring fees, so retailers will pay less for processing payments.

What’s the rush?
Stepping back, one of the big motivators for a CBDC is for cross border payments in order to circumvent sanctions. If a CBDC isn’t rolled out domestically, then a cross border CBDC would need direct integration with the domestic payment system.

With the cross border payment platform mBridge, the only member that currently has a domestic CBDC is China, and even that is in pilot mode. Hence, it’s not completely clear why there’s such a rush in Russia. Especially given the central bank has a few other issues to deal with given the war with Ukraine.

On the other hand, Russia is known for its software prowess, and is trying to lead the BRICS Bridge cross border payment project. Hence, having an operational domestic CBDC gives it more credibility.