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The Parlous State of Financial Education – Cointelegraph Magazine

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They say that education prepares you for later life. For many sleep-deprived teenagers staggering through the corridors on a Monday morning, this is the sole motivation to learn — the hope that upon graduation, they will be equipped with the tools and wisdom necessary to navigate the intimidating minefield of adulthood.

So it is expected that the education system, from the work of individual teachers to the coordination of national education policy, strives to do students a service by creating curricula that actually achieve this goal. 

However, in one key aspect of teaching life skills, some governments are failing. 

When I started at the 1,800-strong high school in the United Kingdom where I am currently studying, I found that the majority of my peers had part-time jobs alongside their studies. Leon Riley, Principal at John Leggott College, expects the number of young people employed to have increased due to the Covid-19 pandemic: “There are lots of students working 40+ hours in lockdown, mainly in supermarkets,” he told me.

Even though the responsibilities of financial independence are delayed for students without part-time jobs alongside their studies, the basics of saving, budgeting and debt management will inevitably become a fact of life for all young people, whether they have been taught the skills to manage them or not.

“While illiteracy makes one’s life uncomfortable, financial illiteracy makes one’s survival impossible.”

Alan Greenspan, former Chairman of the Federal Reserve

 

Despite the clear necessity of these skills, school curricula in most countries lack a comprehensive approach towards financial education. In my experience as a student, lessons on budgeting and compound interest are few and far between. I’m not the only one; the 2019 Young Persons’ Money Index (YPMI), a yearly report examining the financial capability of young people in the U.K., states that 82% of students want to learn more about money and finance in school.

The same is true for economic education. Economics is a crucial subject, impacting our everyday lives and dominating the news at elections. Despite this, Ross Cathcart, Organizing and Membership Manager at Rethinking Economics, an international network of students and academics striving to promote pluralist economics in the classroom, states that “Economics is not grounded in people’s real experiences. [In schools] it’s quite a scary, exclusive subject which many students don’t feel confident talking about.”

This is by no means a problem confined to the young people of virus-stricken England. Financial illiteracy threatens to leave people around the world prone to predatory lending, poor retirement planning, and crippling debt. 

Economic illiteracy creates significant information asymmetries that prevent voters from making truly informed decisions when they head to the ballot boxes. This is an international problem, with governments globally approaching it in different ways. 

This article will begin by looking at five countries’ financial education policies before noting some key takeaways, and then discussing the growing issues around economic education.

United Kingdom

The U.K. government introduced financial education to the national curriculum in 2014. As a result, the 2019 YPMI states that twice as many students of High School age now report access to financial education (from 29% in 2015 to 64% in 2019).

The same cannot be said for primary schools (the U.S. equivalent of elementary and early middle school). Primary schools in England are not subject to the same curriculum as secondary schools, for which financial education of some form is mandatory.

Financial education is rarely taught independent of other subjects in the United Kingdom. According to the Money Advice Service’s survey of English secondary schools and colleges, 96% of schools integrate this material into existing subject lessons, such as Math, PSHE (Personal, Social, Health and Economic Education), and Business Studies. 

However, Dominic Vallier, Head of Financial Capability Relationship Managers at the London Institute of Banking and Finance (LIBF), highlights Wales as “a real success” with regard to the way it has used its devolved powers (powers transferred to the constituent countries of the U.K., giving them more autonomy) to embed mandatory financial education in the curriculum in both primary and secondary schools. Some 9% of Welsh students receive dedicated personal finance lessons sponsored by the Principality Building Society.

Although teaching financial education is firmly part of the national strategy in the U.K., this has not translated into all students benefiting. The national curriculum only applies to state schools managed by local councils, and academies (independent schools which get their funding directly from Westminster rather than a local council) which closely follow the national curriculum. As a result “Students who don’t attend state schools or academies are much less likely to have access to financial education in school (47% say they still don’t have any access)”, said Catherine Winter, Managing Director at the LIBF.

United States

The task of coordinating school curricula is largely delegated to the individual states in the U.S., leading to significant regional differences in the way financial education is administered. This contributes to inequalities in financial literacy between high school students across the nation. In tests administered by PISA (the Programme for International Student Assessment), 45% of students in higher-income schools were top performers, compared to just 3% of students in lower-income schools.

National delegation of curriculum-setting has a part to play in this, as traditionally poorer states such as New Mexico, which ranks 48th in state per capita income, require financial education courses be offered — but do not feature financial education in their standards to ensure consistent delivery state-wide.

Given current developments, it is worrying that provision is not universal. In the Council for Economic Education’s 2020 ‘Survey of the States’ Report, it is highlighted that “With the rise of student loan debt, there is concern that student borrowers are not fully informed when making decisions about how much to borrow and from where”. The increasing desperation of students struggling to meet repayments has led to the rise of student loan scams, promising lower repayments for an upfront cost. These have already cost students $95 million in fees. 

However, it should be noted that there have been marked improvements in financial education provision in recent years. The aforementioned report states that there has been a “notable increase” in the number of states mandating students take standalone or integrated personal finance courses (in total, 21 states now do so.)

The U.S. also recognizes April as ‘National Financial Literacy Month’ in a bid to encourage families and young people to establish and maintain financial responsibility in their lives.

In many cases a lack of confidence and support from teachers towards teaching this content can hinder efforts to widen access to financial education — there have been many compelling initiatives targeted towards resolving this issue. For example, in 2009 researchers carried out a study in Eastern Kentucky wherein teachers were given a $250 stipend in return for teaching students in elementary, middle, and high schools a predetermined personal finance curriculum featuring saving, spending and credit, and money management. The results were conclusive — there were statistically significant improvements in personal finance knowledge across the K-12 spectrum. 

There are also private non-profit initiatives such as Jump$tart, which work to provide professional development courses for teachers to increase their confidence teaching personal finance, with a view to making them more inclined to provide this education to their classes. Successful projects such as these could have even greater benefits if implemented on a universal scale.

China

China has historically scored very highly in financial literacy assessments. In the 2015 PISA assessment of financial literacy, 15-year-old students in the regions of Beijing, Shanghai, Jiangsu, and Guangdong (B-S-J-G) in China ranked 1st of all 15 countries that participated. There are a number of reasons for this success.

There has been substantial government backing behind financial education since the 1990’s, with money management topics being included in the national curriculum for primary and secondary schools since then. However, since 2001, the Chinese government has given more independence to regions, districts, and individual schools to alter the curricula students within their remit are taught. This change aims to take into account local backgrounds, engaging students through a syllabus personalized to the financial challenges they encounter on a daily basis.

China also dedicates the month of September to educating citizens about the topic. During this month, government agencies, alongside private entities, promote financial literacy to families (recognizing the importance of parents in educating students) and teach different topics within the sphere of financial education.

Like the U.S. and the U.K., China predominantly teaches financial education through integrating it in other subjects. For example, calculating a firm’s revenue and the interest to be paid on a loan are concepts taught in math classes.

China emphasizes making prudent investment choices in its financial education. For example, much focus on last year’s financial literacy month was set on making ‘rational investments’, and the national Chinese Regulatory Securities Commission (CSRC) has recently started offering optional “investment education” to primary and secondary school children. Even Chinese elementary school textbooks are expected to teach definitions of terms such as “price-to-earnings ratio” or “buy and hold”.

This campaign to improve awareness when investing has been driven partly by a recent uptick in the incidence of loan and investment scams in the country, with some Chinese reportedly committing suicide after losing tens of thousands of dollars to fraudsters. The hope is that educating children to be wary of these risks will help to curb future such incidents, as children convey their new-found knowledge to their parents and family relatives.

France

France has historically performed poorly in PISA financial literacy examinations — students in France scored below average of the 13 OECD countries and economies that were assessed in financial literacy in 2012. Since then, authorities have taken a bold stance to improve financial literacy nationwide.

Since 2016, Banque de France, the French central bank, has been responsible for harnessing the power of public and private sector intervention to coordinate France’s financial education strategy. 

Examples of its work include partnering with the Ministry of Education to develop joint teaching resources for schools to aid teachers in planning and delivering lessons, as well as public outreach, both physically (through the ‘Cité de l’économie et de la monnaie’ (Citéco), an interactive museum in Paris aiming to improve financial and economic awareness, particularly among young people), and digitally, through websites such as the ‘ABC of economics’ which simplifies concepts and provides teaching material for children and families.

The private sector has also played a notable role in outreach programs, such as “Un banquier dans ma classe” (‘a banker in my classroom) — an initiative inviting bankers to schools to talk about finance, and “Finances et Pédagogie” (“Finance and Education”) — an association set up by the Caisses d’Epargne (a retail banking company), intended to raise awareness and provide training on the use of money.

Brazil

Brazil is at a relatively early stage with regards to implementing financial education in schools, having carried out numerous test pilots to test the effectiveness of different curricula. Through these pilots, Brazilian authorities have developed a clear idea of what their financial education needs are. The country plans to create ‘generational behavior change’ and make citizens more aware of financial issues. They plan to do this by inserting financial education concepts into Portuguese, mathematics, sociology and history classes.

There will also be an emphasis on both ‘space-related’ goals (involving improving social awareness and encouraging responsible consumption and saving), and ‘time-related’ goals, advising students on how to plan responsibly and make decisions in the short-, mid- and long-term.

 

 

Key takeaways

Looking at these countries’ challenges and policy responses relating to financial education, there are several conclusions all countries can learn from to develop a more effective financial education policy.

Make financial education mandatory

Although optional financial education is without a doubt a step forward in the right direction, for financial education to be truly impactful for students, it should be made a mandatory subject.

Many students, given the choice to study financial education, will likely turn this option away. This is either due to a lack of knowledge regarding what these courses entail or due to an (understandably) popular decision to value subjects that seem more compelling today (such as coding or robotics) without considering the potential value of the knowledge acquired in later life. 

In both cases, students do not necessarily understand the real importance of taking a personal finance course. But should they be punished several years down the line for this when they tremble over their first tax return? It should be the responsibility of schools to ensure no child is left clueless when they consider taking out a pay-day loan — and mandatory financial education is the answer.

Make financial education a standalone subject in students’ timetables

In the YPMI Report, 60% of U.K. students surveyed would like it to be a separate subject, as opposed to it being included in math, economics, PSHE or citizenship. By making financial education a standalone subject schools give it the importance it deserves. This also forces students to spend dedicated time considering issues of personal finance without considering it a minor detail within the sphere of a broader subject, such as math or PSHE.

As with making financial education mandatory, making it a standalone lesson is part of ensuring that the information disseminated makes a real impact to the way students choose to lead their financial lives.

Vallier said, “Personally, as a parent and an ex-teacher of 15 years, [financial education] does need to be a dedicated lesson. … Giving it dedicated time gives it a focus. Like when you go to an Economics lesson, you know it’s Economics. You had your one-hour lesson focusing on finance and budgeting.”

Morph financial education around local and national contexts

Most countries have significant issues relating to personal finance that concern most, if not all, young people. In my own country, the U.K., this issue is without a doubt student debt. In the U.S., student loans and planning for retirement take precedence. In India, it’s saving responsibly. There is a compelling argument for making these nation-specific issues a large part of financial education courses. Doing so allows students to realize first-hand the usefulness of financial education by setting it in the context of the country, region, and community they live in.

However, there is still a need to adopt a broad curriculum that teaches students the basics of personal finance, saving, budgeting, and other concepts. Solely focusing on financial problems that have specific importance in national contexts can be counterproductive. This is shown explicitly in the concluding remarks of a 2016 study determining the effects of school-based financial education on financial outcomes in Brazil. The results of the 440-school-wide project showed that although students who received the financial education were more likely to save, budget responsibly, and make prudent independent financial decisions, some students were also more likely to borrow using expensive credit cards and fall behind with credit repayments.

The researchers attributed this unexpected result to the lack of discussion around purchasing responsibly, credit cards, or installment options. In other words, the focus on saving and budgeting was a double-edged sword. Governments should, therefore, ensure that a comprehensive syllabus is taught to avoid these unintended repercussions.

Teach financial education from an early age

Ensuring children are exposed to financial education lessons from an early age is critical. Vallier says that

“It is scientifically proven that if you speak to young people from the age of seven, they want to know how to handle money and enjoy money. So, at seven years of age, that’s when you can start teaching [financial education].” 

Starting early also increases the likelihood of parents who may not be financially savvy learning from their children about how to avoid risky investments and loan sharks. The Brazil study mentioned earlier offers an empirical basis for this claim, as the financial education administered to the students was also seen to have “significant spillover effects” on parents.

Make sure people around the student are all involved in delivering this education

We must also devote more attention to the people around students who contribute to their education; namely teachers and parents.

To enable teachers to deliver high-quality instruction and adequate training, incentives are required to make teachers willing, able, and passionate about financial education. Confidence is also key — Vallier highlights that the majority of teachers teaching the LIBF’s Lessons in Financial Education (LiFE) are not experts in personal finance, so ensuring teachers are confident to answer questions on personal finance is vital. He continues, “You don’t need to be a financial advisor or an expert to deliver [financial education], with the right support and training and materials.”

A growing body of research shows that parents also play a critical role in a child’s education, which is why ensuring parents are equally au fait with the content their children are learning is essential for reinforcing a student’s understanding of the subject matter. Therefore, adopting a financial education month, like China or the U.S., could be one way of encouraging this desired parental involvement in a child’s financial education. 

Beyond personal experience — economics for young people

In addition to financial education, which revolves around educating individuals to make more informed personal financial choices, there is also the opportunity for teaching broader comprehension of the economies and societies we live in. 

In many ways, this larger world shapes and influences the financial decisions we make on an individual level — governments determine the level of tax we pay, whether domestic exporters will benefit from free trade deals with other nations, and whether to adjust minimum wage levels. 

When the time comes for the public to vote for which Government they prefer, many of the main headlines are economic: “Where are taxes headed?”, “How will public spending change?” among many others. 

Every time there is an election the public has the responsibility of determining the future economic path of the country. Are all citizens adequately educated to make an informed decision on these matters? I would suggest not. As with financial education, there is still a lack of economic education, and this leads to students being under-prepared for adult life (and specifically, informed voting) when they leave school.

In a 2016 poll asking the U.K. public if they felt that “politicians and the media talk about economics in a way that is accessible and easy to understand”, only 12% answered in the affirmative. Many of my peers (future voters in four years’ time) who don’t study economics wouldn’t be able to explain the difference between a progressive and a regressive tax.

Cathcart highlights that “if the purpose of education is to build people into adults that have an awareness and an understanding and the critical faculties to look at the world around them and be able to make an informed decision, and understand, for instance, what their vote is going to provide for them or the people around them, the absence of economics from [early education] is really problematic.” 

François Villeroy de Galhau, the current Governor of the Bank of France, states that a lack of economic education represents a challenge to democracy: 

“Providing our fellow citizens with the keys to understanding complex economic debates is a matter of respect. There’s no use in complaining about “populism”, … if we can’t provide the “people” with the ability to ask the right questions and then evaluate the answers.”

“Economic literacy is crucial because it is a measure of whether people understand the forces that significantly affect the quality of their lives.”

Gary Stearn, former chief executive of the Federal Reserve Bank of Minneapolis

 

Despite being arguably more critical, access to economic education is even more limited than financial education. Ali Norrish, head of Research and Schools at Economy, a sister organization of Rethinking Economics, believes that this is partly due to a misunderstanding of the nature of economic education, as “most programs which claim to address economic literacy limit themselves to the financial literacy sphere”. 

Clearly, there is a need for a broader roll-out of economics education covering principles such as taxation, the labor market, and trade, allowing the public to better hold their governments to account. With the Covid-19 pandemic upending the global economy and leading to yet more economic uncertainty following Brexit and the ongoing U.S.-China trade war, it is more important than ever that the young people of today are equipped with the knowledge to understand the economic consequences of such policies, enabling them to guide their countries through precarious economic waters every time they head to the ballot box.

Although incorporating financial and economic education into school curricula may seem like an unprecedented task, policymakers have shown recently that such change is possible. Computer science education, for example, has developed rapidly over the past few years. Responding to calls to make the curriculum more relevant, the U.K. government made Computer Science education mandatory for all students aged 5 to 16 in September 2014. 

Private initiatives have successfully filled gaps left behind by the state — Girls Who Code U.K. is a non-profit organization working to close the gender gap in technology by teaching girls computer science through out-of-school programming clubs. Its more established ventures in the U.S. have reached 185,000 young women.

There is no choice to be made here. If countries want to preserve the central purpose of education, they must adapt curricula to give financial and economic education the importance they deserve. 

Only then can one say that education truly prepares you for later life.


 



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Tesla buys BTC, Mastercard supports crypto, DOGE founder speaks out

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Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Bitcoin hits all-time highs as Tesla invests $1.5 billion

The past week is going to go down as one of the best in Bitcoin’s history. It all began when an SEC filing revealed Tesla has invested $1.5 billion in BTC and planned to start accepting crypto as a payment method.

BTC’s price immediately leaped to record highs on the news, surging by 20% in 24 hours. The announcement came weeks after Elon Musk added #bitcoin to his bio and revealed he supported the cryptocurrency.

Tesla’s Bitcoin exposure represents about 7.7% of its gross cash position, and the news has sparked hopes that other major corporations will follow suit. Galaxy Digital’s Michael Novogratz predicted that “every company in America” will emulate the electric vehicle maker by allocating part of its balance sheets to BTC.

But some treasury experts have been left scratching their heads over the change in Tesla’s investment strategy, with critics describing the move as “unusual” and “risky.” JPMorgan also piled in and said the purchase might not trigger a ton of similar investments.

 

Mastercard announces support for crypto on its network in big week for adoption

Tesla was just the tip of the iceberg, with a flurry of announcements proving that Bitcoin is now firmly in the mainstream.

Mastercard unveiled plans to start supporting crypto this year, paving the way for almost 1 billion people to spend digital assets at more than 30 million merchants. The company said the move was about giving its customers choice.

Elsewhere, PayPal revealed that its crypto service is going to be rolled out in the U.K., making it the first international market since a successful launch in the U.S. last fall.

Twitter, home to crypto-friendly CEO Jack Dorsey, confirmed it is looking into how it might pay employees who wish to be compensated in Bitcoin. Chief financial officer Ned Segal added that the social network is exploring whether it needs to have BTC on its balance sheet.

There was more to come. BNY Mellon, America’s oldest bank, announced that it will offer crypto custody services for institutional clients. Its chief executive, Roman Regelman, told the WSJ: “Digital assets are becoming part of the mainstream.” Other major banks, such as JPMorgan, now believe they’ll eventually have to get involved in BTC.

Speculation is now growing that Apple will be one of the next companies to embrace Bitcoin. The cherry on top of the cake came when the crypto-focused fintech platform BitPay revealed that card owners can now pay for goods and services using Apple Pay.

Key Bitcoin price metric signals traders are positioned for $50,000 

BTC surged beyond $43,000 without breaking a sweat on Monday, besting last month’s all-time high of $42,000. As the week progressed, Bitcoin managed to hit $48,900.

Many high-profile analysts openly predicted last year that $50,000 was a realistic price target for 2021. Just six weeks into the year, BTC has come tantalizingly close to this level.

Despite Bitcoin’s value trebling in the space of just three months, several crypto traders believe that the scene remains exceedingly bullish… and those looking for a local top might end up being disappointed.

One analyst, Cheds, told Cointelegraph: “In my view, bulls are still in complete control, and every day, we get more news of institutional adoption and demand and that, more than anything, will be the driving force.”

Another, CryptoWendyO, described $50,000 as “inevitable,” adding that a Bitcoin tweet from Musk could send BTC to $54,000.

Ethereum hits a new all-time high as CME futures go live

ETH broke $1,800 this week, setting new records several times along the way. All of this came as Ether futures made their long-awaited debut on CME.

It’s also been a very lucrative few days in the altcoin markets. Cardano has surged 71% over the past seven days, and Polkadot is up 49%, with Binance Coin crushing the competition after clocking gains of 103% in the space of a week. Even XRP managed to break $0.60 once again, which has the Sword of Damocles hanging over its head.

BNB’s gains are undoubtedly linked to the record levels of traffic coming to the Binance exchange, with the platform suffering an outage on Thursday as it went down for maintenance.

The total value locked in decentralized finance also managed to crack $40 billion this week. However, much of this surge is likely down to the soaring value of Ether rather than a dramatic explosion in activity.

 

Founder of Dogecoin sold everything in 2015 for “a used Honda Civic”

Not everyone is rolling around in $100 bills as a result of the crypto bull run. Dogecoin founder Billy Markus has revealed that he sold off his DOGE stash in 2015 for an amount equivalent to a used Honda Civic.

All of that means that he missed out on the Dogecoin mania that has helped the joke cryptocurrency gain 900% since late January, fueled by tweets from Elon Musk.

Writing on Reddit, Markus said that he can’t comprehend the prospect of DOGE ever reaching $1, writing: “That would make the ‘market cap’ larger than actual companies that provide services to millions, such as Boeing, Starbucks, American Express, IBM.”

Musk recently revealed that he had bought some DOGE for his nine-month-old son so he can be a “toddler hodler,” but there are fears that his days of tweeting about crypto could be numbered. Legal advisors have warned the billionaire that his social media activity and public statements could come under scrutiny from the SEC.

 

Winners and Losers

 

At the end of the week, Bitcoin is at $47,592.20, Ether at $1,836.68 and XRP at $0.60. The total market cap is at $1,477,578,548,979.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Avalanche, BitTorrent and The Graph. There’s just one altcoin loser in the top 100 this week: Ampleforth.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

 

Most Memorable Quotations

“Cryptocurrency has become a worldwide transaction of which you cannot even identify who owns what. The technology is so strong that I don’t see the kind of regulation that we can do. Bitcoin has made our currency almost useless or valueless.”

Sani Musa, Nigerian senator

 

“Elon Musk has exposed Tesla to immense mark-to-market risk.”

Peter Garnry, Saxo Bank head of equity strategy

 

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

Janet Yellen, U.S. Treasury Secretary

 

“New account registrations are still open, not sure for how long. Also seeing ATH on this. Better get an account soon.”

Changpeng Zhao, Binance CEO

 

“It would not be surprising — given the focus on the chief executive’s tweets, Bitcoin pricing and recent dramatic market moves — for the SEC to ask questions about the facts and circumstances here.”

Doug Davison, former SEC enforcement official

 

“Digital assets are becoming a more important part of the payments world. We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money.”

Mastercard

 

“Bought some Dogecoin for lil X, so he can be a toddler hodler.”

Elon Musk, Tesla CEO

 

“The main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin.”

JPMorgan

 

“We’ve done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in Bitcoin, how we might pay a vendor should they ask to be paid in Bitcoin, and whether we need to have Bitcoin on our balance sheet.”

Ned Segal, Twitter chief financial officer

 

“Markets are going up heavily, but we’ll be seeing some downwards momentum as well. Nothing goes up in a straight line.”

Michaël van de Poppe, Cointelegraph Markets analyst

 

“I wouldn’t be surprised to see there being almost some sort of a race now — you have Elon Musk, you have Michael Saylor, Jack Dorsey. You’re gonna see a lot of other visionary leaders in disruptive companies actually realizing that it’s really moved from ‘why’ to ‘why not.’”

Michael Sonnenshein, Grayscale CEO

 

“The target for consolidation is near $52k, where I’m expecting a bit of a correction but the measured move overall should take us towards $63,000.”

filbfilb, Cointelegraph Markets analyst

 

“Any wallet that won’t give you your private keys should be avoided at all costs.”

Elon Musk, Tesla CEO

 

“Central banks should ban the trading of it, and force anyone who holds Bitcoin and wants to use it in any transaction, to exchange it for another currency that does not have such a damaging side effect.”

Nick Boles, former British MP

 

“ETH futures go live on the CME today. This is huge. This is a bridge to institutions. This is a green light from U.S. regulators. ETH is becoming globally accepted commodity money.”

Ryan Sean Adams, Ethereum researcher

 

“If [Apple] decides to enter into the crypto exchange business, we think the firm could immediately gain market share and disrupt the industry.”

Paul Steves, Royal Bank of Canada Dominion Securities

 

“We expect to begin accepting bitcoin as a form of payment for our products in the near future.”

Tesla

 

Prediction of the Week

Bitcoin price poised to hit $63,000, says trader filbfilb

The popular analyst filbfilb has declared that “the game has changed” for Bitcoin — and has revealed what he thinks will come next for the world’s biggest cryptocurrency.

The Cointelegraph Markets contributor has said that he’s anticipating “a bit of a correction” once BTC hits $52,000 but believes “the measured move overall should take us towards $63,000.”

And on the matter of corporate adoption, he wrote: “I really don’t think people understand that S&P 500 companies owning Bitcoin means that by default people’s pensions are exposed to Bitcoin. The % of people invested in Bitcoin has already reached the masses, they just don’t even know it.

 

FUD of the Week 

Ethereum-based social media project shuts down as ETH fees approach new highs

An Ethereum-based project has ceased development due to rising gas prices, as the cost of transacting on the blockchain continues to push new highs.

Unite, which aimed to offer social media tokens, said the original idea for the project has been rendered unfeasible by the recent spike in fees, with the average cost of using Ethereum rising by a staggering 35,600% since last January.

The startup intended to allow social media users on sites such as Twitter and Discord to distribute Ethereum ERC-20 tokens to their audience and community. Developers also confirmed that they have decided against building the platform on a layer-two solution.

FTX CEO claims competitor responsible for racist messages delivered to Blockfolio users

Blockfolio’s Signal feed was briefly compromised this week, with some users receiving racist messages within the company’s app.

Now, FTX CEO Sam Bankman-Fried, who acquired Blockfolio for $150 million last August, has shed light on what happened following a security review.

He claimed that the offensive content was produced and published by a competitor exchange that maliciously gained access to someone’s account.

Bankman-Fried didn’t name the culprit but stressed that funds were not jeopardized at any time. He also confirmed that Blockfolio has now fixed the vulnerability that led to this situation.

The executive has been praised for his handling of the situation, and he has apparently added $10 to the trading accounts of affected users, as well as donating to organizations dedicated to fighting racial and societal injustice.

India’s crypto ban is coming, hodlers to be given transition period: Bloomberg

An unnamed senior finance ministry official has claimed that India will soon completely ban crypto assets.

It’s reported that the use of cryptocurrency in all forms will be prohibited under the new law — meaning transacting through foreign exchanges won’t be allowed either.

Crypto exchanges have reacted with dismay to the news. Unocoin co-founder Sathvik Vishwanath said: “If government goes ahead with banning all cryptocurrencies, except the one backed by the state, it will not make sense to continue our business in India. But we’ll have to wait and watch.”

The Indian government has been determined to clamp down on crypto use after the supreme court overturned the RBI’s blanket ban on local banks providing services to businesses dealing with crypto.

 

Best Cointelegraph Features

Moment of truth? Tesla purchase is the moment Bitcoin has been waiting for

Despite some expected near-term volatility, Tesla’s exploration of the crypto realm will likely help the industry scale up to new heights.

Coincidence? Company stocks rise after they buy Bitcoin as a reserve

The market caps of most companies that bought Bitcoin have increased recently, but is that solely thanks to BTC?

A new trend? Non-crypto CEOs and celebrities embrace Bitcoin on Twitter

Are business leaders signaling the technological future they believe is coming to pass — an international and decentralized one?





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Necessity is the mother of adoption – Cointelegraph Magazine

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Binance’s Changpeng Zhao describes the Philippines as “one of the most active crypto communities in Asia” and it’s the perfect way to sum up the country’s blend of high adoption amid relatively low affluence.

With GDP spending power of less than $10,000 per head each year, this nation of 7,100 islands is far from a major contributor to worldwide exchange volumes. But in terms of day to day use and enthusiasm, a significant proportion of Filipinos appear to be leapfrogging directly from a cash-based economy to the future of fintech.

The country boasts 17 licensed digital currency exchanges, and tens of thousands of pawn shops and convenience stores happily accept cash deposits and withdrawals for various crypto exchanges and apps. You can buy Bitcoin with cash at any of the 3,000 7/Elevens in the land via Abra, and one in seven adults use the blockchain-based crypto and digital payments app Coins.ph. That’s a level of market penetration comparable to some of the most well-known payments apps in the world.

Crypto regulations are clearly defined and broadly favorable, and special economic zones such as the ‘Crypto Valley of Asia’ in Cagayan, and the Clark Freeport Zone, compete to attract international blockchain projects. In fact, the International Monetary Fund named the Philippines one of the ten best countries in the world in which to develop a blockchain or cryptocurrency project. Widespread high-level English language skills and relatively low wages have also seen Filipino workers become a favored choice as remote staff for blockchain projects.

Swapping cash for crypto

The growing embrace of fintech and blockchain comes as much from a pressing need to modernize as anything else. It’s still a cash-based society where 71% of adults don’t have a bank account. Even before the pandemic, one in five people lived below the poverty line, with many relying on cash in hand jobs and living from day to day.

But with more active cell phone connections than people, there are big opportunities to change the game. By 2019, 10% of the population was already using cryptocurrencies to make payments. Leah Callon-Butler, the director of Emfarsis Consulting in Clark, says fintech can dramatically change lives in the country:

“People are just like, ‘Whoa, mind blown — this is going to save me half a day because I don’t have to go all the way to the bank during business hours and take three journeys on public transport and then wait in line for an hour and cash the damn thing and then go all the way home. I could do this on my phone.’”

Callon-Butler was herself unbanked when she arrived in the Philippines in 2018 to work with the local staff for an international crypto project. Like many, she turned to the blockchain based Coins.ph platform. “Coins.ph changed my life,” she says, adding: “I realized I could use it to deposit Bitcoin or Ethereum and I could buy mobile load, I could pay bills, transfer money to other people, it was just a lifesaver. It’s very easy to use and very customer centric.”

Crypto makes life easier

In the past two years alone, Coins.ph claims to have doubled its user base to 10 million people, out of a total adult population of 72 million. Founded in 2014, it seeks to make digital transactions easy, with users able to sign up quickly with a mobile phone, email address and ID selfie and then withdraw or deposit cash at 33,000 retail partners. The app offers banking, bill payments, remittances and online shopping, all using either pesos or cryptocurrency.

A spokesperson for the company told Magazine that more people had started using the platform since the beginning of the pandemic: “We’re starting to see a positive shift as digital payments gain traction – a trend accelerated by the global pandemic,” they added: “More people are adapting to crypto, online banking and more.”

Blockchain is also helping undercut the high cost of remittances. Around 10% of the GDP of the Philippines comes from the 10 million expatriate Filipinos who work overseas and send money back home to support their families. But wiring money via traditional routes comes with high fees — an average of 6.9% for a $200 transfer — leaving a big market opportunity for companies including PDAX, BloomX, SendFriend, Rebit and Coins.ph to transfer funds for a fraction of the cost using crypto, that can be withdrawn as cash at thousands of shops. The spokesperson says:

“We’re seeing growing interest amongst users in using crypto as a convenient option to transact – particularly cross-border. We see digital remittances – including blockchain-based remittance – as a significant opportunity. COVID-19 is a key driver of the growth we’re seeing, but we expect this trend will continue beyond the pandemic.”

Coins.ph would not provide a breakdown on the number of users who transact in cryptocurrencies, versus those who use fiat. But Mike Mislos, founder of the local Bitpinas crypto news website, estimates that it’s a significant proportion. “I’m also part of some groups on Facebook and like half the people are using it for normal financial transactions and half the people are also using it for cryptocurrencies,” he told Magazine.

2023 goals you can bank on

The increase in user numbers at Coins.ph comes in the context of a wider drive to overhaul the economy. Realizing how inefficient the current cash-based, unbanked economy is, the Bangko Sentral ng Pilipinas has unveiled an ambitious roadmap with a goal for 2023 of getting 70% of citizens a bank account, and switching 50% of retail payments to digital.

The pandemic has accelerated progress on this front, due to the “general community quarantine” and “enhanced community quarantine” restrictions that have kept many people at home since March. Around 14 million people in Manila have been under strict rules for almost eleven months now with the latest deadline due to expire, and likely extended once again, on January 31. The Philippines has seen half a million cases and just under 10,000 deaths. 

“It appears the target has been accelerated because of the pandemic because there’s absolutely no choice but to do the transactions online because of lockdown,” as Mislos explained.

Bigger than payments

The local blockchain industry isn’t just confined to exchanges and remittances though. There’s payroll service Paylance, real estate transaction platform Qwikwire, and a coworking space BlockchainSpace, that also offers industry events and training. Manila gaming company Altitude Games is fast becoming a local leader in blockchain-based virtual worlds, creating the NFT-powered Battle Racers game for Decentraland and has Mushroom Mania for The Sandbox in development.

One of the most well-known companies is Satoshi Citadel Industries which has been developing its blockchain ecosystem since 2014. Services include remittances (Rebit) crypto purchases and a wallet (Buy Bitcoin, BTC Wallet) and international stock purchasing platform (Keza).

Even Binance is making a push into the Philippines, having hired Coins.ph’s former head of cryptocurrency Colin Goltra as country director, and launching P2P Bitcoin trading with pesos in the summer of 2020. Binance also acquired a local payments company Swipe, to launch crypto to fiat credit cards in various regions around the world.

Mislos says there was probably more interest in crypto in the Philippines than elsewhere in the region, with the exception Singapore and Vietnam. He cites favorable regulations, including a regulatory sandbox for emerging companies, as part of the reason. “I think more people are interested in cryptocurrencies than other countries here in South East Asia,” he says, adding:

“The regulations from the central bank are more welcoming. I don’t think there are many more countries in the world who have as much potential and regulatory clarity at the moment as the Philippines.”

In July, Union Bank teamed up with exchange PDAX to enable everyone, including the unbanked, to invest in retail Treasury bonds with as little as $100 via blockchain at Bonds.ph. The government is also in the process of fine turning regulations with the Blockchain Digital Technology Act.

But not everything is full speed ahead for cryptocurrency in the Philippines. While the central bank has seriously examined a CBDC or ‘digital peso’ it recently shelved plans to launch one until at least 2023. 

There was also considerable excitement in 2018 over a partnership between a developer and the Cagayan Economic Zone Authority to build the ‘Crypto Valley of Asia‘, situated about 400km north of Manila. While dozens of international blockchain and fintech companies have reportedly received licenses, and an $80 million airport was announced in early 2020, things have gone quiet in recent months.

“During this pandemic, I don’t think they are able to focus on that,” Mislos says. “But the last time I checked they were still on.” So it seems this will be a long term project, with three phases planned to roll out over ten years.

What does this year hold?

With 2021 already upon us, will this year see an improvement in the country’s fortunes? Sadly, the signs don’t appear that promising with Moody’s Analytics predicting that due to “deep recession and uncertain fiscal support of policy makers”, the Philippines will be the last country in the Asia Pacific to recover from the pandemic’s economic effects. 

Adding to their woes, the Philippines is pinning its Covid-19 relief hopes on 50 million doses of the Chinese made Sinovac, which is reportedly not only less effective than other vaccines, but only a third of Filipinos are willing to take it. So for the time being, the shift to remote work and digital transactions seems to be a necessity rather than a choice.

Part Two of our ‘Crypto in the Philippines’ special report lands next week and looks at the ethics of hiring offshore Filipino employees for international blockchain projects.



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BTC crash, DOT crushes XRP, man risks losing $262M: Hodler’s Digest, Jan. 10–16

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Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Bulls buy Bitcoin’s $35,000 support retest as altcoins push higher

Scream if you want to go faster. The crypto markets have been a rollercoaster ride this week — with Bitcoin’s price falling by more than $10,000 to lows of $30,549.60 on Monday.

Analysts maintained that the correction was “healthy and necessary,” with the sharp sell-offs prompting the total crypto market cap to fall by more than $200 billion

ExoAlpha CIO David Lifchitz said the crash “would purge the excessive growth of the past 10 days, allowing Bitcoin to build a new base toward $50,000 and above.”

And indeed, Bitcoin refused to die. Just three days after the sudden downturn, BTC reached $40,000 on Coinbase once again, amid fresh evidence of new large buys on exchanges. Tyler Winklevoss had a clear message: “Don’t listen to the noise, stay focused.”

Alas, it seems like $40,000 is now shaping up to be a tough nut to crack. Despite Joe Biden unveiling an eye-watering stimulus package worth $1.9 trillion, there was not a surge to be seen in Bitcoin’s price. Indeed, BTC actually fell under $35,000 at one point.

 

eToro warns users it is running out of crypto to trade due to unprecedented demand

An email sent out by eToro suggests that the exchange is struggling to keep up with users who are clamoring to snap up Bitcoin.

In a message to customers, it warned that “unprecedented demand for crypto coupled with limited liquidity” meant limits on crypto buy orders may need to be enforced over the weekend.

It seems the company has been a victim of its own success. The email came a day after eToro marketing manager Brad Michelson revealed that 380,000 users had opened accounts in the first 11 days of January — with crypto trading volumes running 25 times higher than they were last year.

Quantum Economics founder Mati Greenspan — formerly a market analyst for eToro — told Cointelegraph that the warning notice was “a symptom of a potential upcoming liquidity crunch” and advised users against trying to move funds off the platform.

An eToro spokesperson told Cointelegraph: “Our experience of the 2017 crypto rally means that we understand the possible consequences of extreme volatility in crypto markets. We want to ensure that our clients fully understand the possible risks.”

DOT flip: Polkadot overtakes XRP to become the fourth-largest cryptocurrency

There have been some big movers as the crypto market rally resumes and Polkadot’s DOT token is among them.

DOT has flipped Ripple’s XRP in terms of market capitalization following a massive gain of 29% over the past 24 hours. This makes it the new fourth-largest cryptocurrency, with a market cap of $15.6 billion at the time of writing. Over the past week, DOT has surged by an impressive 83.26%.

Polkadot is a fully interoperable platform that allows other blockchains to connect to the network, and it has been described as an “Ethereum killer” because of how it can process thousands of transactions per second.

The most recent update, which may be driving momentum, was the launch of its Rococo parachain testnet, which went live in late December.

Other factors driving momentum include the issues with DeFi on Ethereum as demand for scaling intensifies.

 

Programmer has two password guesses left to avoid losing $262 million in Bitcoin

Two gut-wrenching stories emerged this week — both with a similar theme.

One man told The New York Times that he has forgotten the password to a hard drive holding 7,002 BTC — a crypto haul that’s worth a jaw-dropping $262 million at the time of writing.

Stefan Thomas has just 10 guesses before the hard drive is encrypted forever… and so far, he has used eight of these attempts to no avail.

Meanwhile, on the other side of the Atlantic, a Welshman is offering the city of Newport a staggering $72 million for help in tracking down a hard drive storing 7,500 BTC. There’s just one problem: It was thrown away several years ago and is languishing in a landfill. Unfortunately for James Howells, the council has said it isn’t prepared to help over concerns that the search would be damaging for the environment. That means he’s going to miss out on a $280-million fortune.

Thankfully, it isn’t all bad news. A student has claimed that they have found private keys that they accidentally Hodled as early as 2011, unlocking $4 million in the process.

 

ECB president Lagarde renews calls for global regulation of Bitcoin

The president of the European Central Bank has doubled down on calls for Bitcoin to be regulated globally.

Speaking at the Reuters Next conference, Christine Lagarde said: “[Bitcoin] is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

During the interview, Lagarde did not reportedly refer to any specific instances of money laundering involving Bitcoin but alluded to her awareness of criminal investigations into illegal activities connected with its use. 

She told reporters: “There has to be regulation. This has to be applied and agreed upon […] at a global level because if there is an escape that escape will be used.”

 

Winners and Losers

 

At the end of the week, Bitcoin is at $37,271.25, Ether at $1,255.16 and XRP at $0.28. The total market cap is at $1,038,320,969,138.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are HedgeTrade, Voyager Token and IOST. The top three altcoin losers of the week are Bitcoin SV, EOS and Verge.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

 

Most Memorable Quotations

“They said #Bitcoin died on Monday, but now it’s above 37k. Don’t listen to the noise, stay focused.”

Tyler Winklevoss, Gemini co-founder

 

“Did nocoiners really think #Bitcoin wouldn’t bounce back? This is the year of the Metal Bull. $100k is inevitable.”

Samson Mow, Blockstream CSO

 

“This whole idea of being your own bank — let me put it this way: Do you make your own shoes? The reason we have banks is that we don’t want to deal with all those things that banks do.”

Stefan Thomas, locked out of 7,002 BTC 

 

“The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support BUY orders over the weekend.”

eToro

 

“[Bitcoin] is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

Christine Lagarde, European Central Bank president

 

“I look at the asset value of Bitcoin versus the asset value of all things traded and Bitcoin is still a nothing burger — a giant nothing burger.”

Kevin O’Leary, businessman

 

 

Prediction of the Week

Pantera Capital CEO doubles down on $115,000 Bitcoin prediction for 2021

Dan Morehead has maintained his bullish prediction for 2021, with the Pantera Capital CEO claiming that Bitcoin is on track to have surged 800% by August and hit $115,000.

The exec initially made this prediction in August 2020, when Bitcoin was trading at about $11,600. At the time of writing, it is now worth $37,000.

Setting out why Bitcoin has plenty of room for growth, he added: “Is Bitcoin overvalued? I would say no. […] Bitcoin has spent three years well below its long-term compound annual growth trend line, it’s still below it, and although Bitcoin has rallied a great deal over the last six months, I think it is fairly valued.”

 

FUD of the Week 

 

British financial adviser calls on the government to ban crypto transactions

A veteran financial advisor has called on the British government to ban crypto transactions.

Neil Liversidge started a petition urging local financial authorities to stop Bitcoin payments in the United Kingdom.

He argued that digital assets have no intrinsic value, adding they can have a “destabilizing influence on society, and are often used for criminal activity.”

In an interview with Professional Adviser, Liversidge urged retail investors to cash out immediately, adding: “If the UK government takes a lead by banning transactions on cryptos as my petition requests, that will set off a chain reaction, crashing cryptos overnight.”

Liversidge needs 10,000 signatures for a response from the government. At the time of writing, he’s got just 112.

Ledger owners report chilling threats after 20,000 more records leaked

Ledger users are receiving threatening emails in the wake of the hardware wallet manufacturer reporting that 20,000 more of its customers have been affected by another massive data breach.

One Reddit user said his father, who owns a Ledger wallet, received a message including his name, home address and phone number. The extortionist demanded 0.3 BTC or 10 ETH, worth roughly $12,000, or he would face physical violence.

The Redditor wrote: “I know that those scammers sending emails by hundreds are just trying their luck by creating fear, but when it comes to the safety of your family it’s another story.”

In another email, the scammer wrote: “Are you able to imagine all the possible consequences that can occur to you and your loved ones? I hope you do not ruin every little thing for yourself by making the wrong choice.”

Bitcoin payments are the “second stupidest idea I’ve heard,” says Stephen Colbert

Stephen Colbert, the charismatic host of CBS’ The Late Show, isn’t holding back his punches or his jokes when it comes to Bitcoin.

He referenced a recent Vice report that revealed how hackers had taken control of internet-connected chastity cages — devices worn by men to prevent them from engaging in any sort of sexual activity — and demanded Bitcoin to unlock them.

With a wry smile, he said: “Getting paid in Bitcoin? That’s the second stupidest idea I’ve heard.”

Colbert first covered Bitcoin on his show in April 2014 when Bitcoin was fluctuating between $50 and $300. Since then, BTC has risen by more than 40,000%.

 

Best Cointelegraph Features

Bitcoin has become nothing but the new Che Guevara T-shirt

Cassio Gusson argues Bitcoin promised to create a new normal in finance, but it turned out to be nothing but the old normal with a new face.

Here’s how institutional investors ignited Bitcoin’s rally to $40,000

In this article by Benjamin Pirus, experts weigh in on the main events from 2020 that impacted Bitcoin’s price the most.

Strap in: New institutions wait for Bitcoin price rollercoaster to end

Bitcoin market volatility is scaring off new institutional investors, but meanwhile, old ones continue to buy up the BTC dips. Here’s Shiraz Jagati.



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