Story of the week – El Salvador legalizes Bitcoin as the legal tender
El Salvador(a small central American country) becomes the first in the world to accept bitcoin as legal tender. Bukele( the country’s president), on Wednesday, said that the law would require “all businesses to accept bitcoin”. But the government would “act as a backstop for entities that aren’t willing to take on the risk of a volatile cryptocurrency.”
El Salvador marks the entry to a new era of legalized cryptocurrency. El Salvador has adopted the dollar as its sovereign currency since 2000 and thus poses no risk of losing sovereignty.
Making the capital gains from bitcoin investing tax-free, Bukele hopes to attract big investors and pour some boost to the crippling economy.
Though this move could entice many investors, the fear of criminals using this to quickly convert their dirty money dominates. El Salvador’s adoption of Bitcoin as legal tender may imply a series of risks and regulatory challenges, International Monetary Fund spokesman Gerry Rice said Thursday.
Global Equity Market Update
New inflation data reflects immense soaring with levels reaching 5%. There seems to be no end to this frenzy of rising prices making the economy priciest in years.
Despite the ongoing inflation concerns, the investors believe this to be transitory rather than sticky. Owing to this belief and speculative increased demand, the S&P remained stable with minor green ticks in the latter half.
Owing to banking news out of Europe, Bitcoin has come again into the green ticks spotlight. Etherium’s shine is diminishing a bit Thursday based on some volume, volatility, and options data.
Bitcoin (BTC) trading around $36,732 as of 21:00 UTC (4 p.m. ET). Up 1% over the previous 24 hours. | Bitcoin’s 24-hour range: $36,250-$38,200 (CoinDesk 20)
Etherium (ETH) trading around $2,465 as of 21:00 UTC (4 p.m. ET). In the red 3.8% over the previous 24 hours.| Ether’s 24-hour range: $2,462-$2,617 (CoinDesk 20)
Note: Price data derived from CoinDesk
On the other side – Bitcoin ransom recovered (not so secure is it?)
ON June 7, 2021, the FBI finally recovered a majority of the bitcoin ransom that was paid by the Colonial pipeline on May 7, 2021. The ransom was paid after the pipeline was hacked by a ransomware attack.
Although crypto transactions are considered extremely secure and virtually untraceable, the FBI’s San Francisco division cracked this code by acquiring a cryptographic key(unique) that could be used to access the transfer information of the ransom bitcoin on the blockchain.
Companies In Focus
- Tata Digital to invest $75 million in health wellness startup CureFit. Read more in our exclusive cover
- China’s dominant ride giant Didi filed to go public. Didi forced Uber to closed its Chinese operations and exit the country
Shubham Agarwal (CFA L2 Candidate | Incoming MBA candidate at University of Cambridge, UK)