Kvě 06

Zimbabwe Banks Lack Cash Reserves To Honor Customer Withdrawals

Source: bitcoin

Bitcoinist_Zimbabwe

The country of Zimbabwe is not associated with financial stability by any means, yet things have taken a turn for the worse. Now that cash supplies are nearly non-existent, banks have to turn customers away. An excellent breeding ground for Bitcoin adoption, or will a different solution save the country?

Also read: Industry Report: Dr. Satoshi, BitPay Launches Bitcoin Debit Card

Zimbabwe Runs Out Cash

Even though various countries around the world are contemplating to go cashless in the future, running out of cash is not what most of them have envisioned. Unfortunately for Zimbabwe, that is exactly what happened. Not that this is a complete surprise, mind you, as the country has been using various foreign currencies since the collapse of their own fiat currency in 2009.

Especially the US Dollar has been a focal point for Zimbabwe, but due to their slump in global commodity prices and lower exports, not enough funds is coming in. As a result, local banks have started to turn away customers looking to withdraw cash, simply because they have no reserves to meet the demand.

For the time being, the central bank is looking to print bond notes, which would be tied to the US Dollar value kept in the country’s reserves. Moreover, withdrawals will be limited to US$1,000 per day, and people are advised to use either Euros or South African rand. That latter is not a viable option either, though, considering the rand lost 20% of its value compared to the US Dollar in the past twelve months.

This goes to show that central banks cannot continue to create money out of thin air to solve their financial problems. Yet that is exactly what the Zimbabwe central bank is doing, as they issue a brand new currency to temporarily alleviate some of the financial pressure. At the same time, they limit how much of it can be used by consumers on a daily basis, though, which will not help stabilize the economy in the long run.

Bitcoin could resolve these financial issues as well, although there is no guarantee consumers and enterprises see the value of this cryptocurrency just yet. Solving a financial crisis does not happen overnight, but Bitcoin is ready to be embraced by Zimbabwe if they want to offer consumers a financial ecosystem that is not bogged down by central bank dominance.

What are your thoughts on the situation in Zimbabwe? Let us know in the comments below!

Source: CNN Money

Images courtesy of Shutterstock, Wikipedia

The post Zimbabwe Banks Lack Cash Reserves To Honor Customer Withdrawals appeared first on Bitcoinist.net.

Zimbabwe Banks Lack Cash Reserves To Honor Customer Withdrawals

Share
Úno 17

Virtual Currency Issued By PBOC Will Not Use Blockchain Technology

Source: bitcoin

Bitcoinist_PBOC

While there seems to be a lot of doubt regarding the future of cash right now, the governor of China’s central bank feels virtual currency will eventually replace this archaic method of transferring value. At the same time, PBOC governor Zhou Xiaochuan was quick to add how the Chinese government will regulate all virtual currencies used as legal tender, indicating there are no plans to embrace Bitcoin by any means.

Also read: Tokken Puts the Legal Marijuana Industry on the Immutable Bitcoin Blockchain

People’s Bank of China Believes In Virtual Currency

To many people, it doesn’t come as a surprise to hear the People’s Bank of China reinforced their earlier statement regarding virtual currency, as the institution has announced plans to launch their own currency shortly.  PBOC governor Zhou Xiaochuan mentioned how currencies evolve as new technologies and economies develop. Cash is very low-tech, and it only seems natural consumers will look for digital alternatives at some point.

Replacing paper money will take some time, though, as a large part of the success of virtual currency hinges on how it will operate. Bitcoin, a very popular virtual currency, is not regulated by banks or governments. Some people see this as a weakness while most of its community members feel this is a core strength of Bitcoin. Central banks will want to control the virtual currency they see as legal tender, though, pushing Bitcoin to the bottom of the list for the PBOC.

When the people’s Bank of China decides to issue their own virtual currency, a significant portion of the development efforts will be focused on security and convenience. At the same time time, a balance must be found between preventing illegal activities and respecting user privacy. Virtual currency can offer pseudonymity to its users, which protects privacy, but also makes it harder to crack down on illicit activities.

PBOC Governor Zhou Xiaochuan stated:

“Since the digital currency will be legal tender, it must be issued and controlled by the central bank, with the issuance, circulation and transaction processes following the same management principles as traditional currencies.”

At the time of publication, the PBOC did not mention a concrete timeline for the release of their own virtual currency. Given the high population and large economy of China, it will take anywhere from months to several years until the new currency is launched. However, it would not replace cash from day one, but rather co-exist for a while until the time has come to remove cash from the economy.

No Mention of Bitcoin At All

As was to be expected, the People’s Bank of China shows absolutely no interest in Bitcoin at all. Or to be more precise, there are no plans to use the popular virtual currency to replace cash in China by any means. But at the same time, officials are keeping an eye on how Bitcoin evolves, as they can use its concept and development progress for their own virtual currency in the future.

Additionally, PBOC has no plans to use the blockchain as we know it either. According to Xiaochuan, the current technology requires far too many resources – such as computational power – and is incapable of handling the transaction volume needed to make it an efficient replacement for China’s economy. Other technological solutions are being researched, and cooperation with various industries will bare an answer in the months and years to come.

What are your thoughts on the plans of PBOC and their own virtual currency? Let us know in the comments below!

Source; BTCC

Images courtesy of PBOC, Shutterstock

The post Virtual Currency Issued By PBOC Will Not Use Blockchain Technology appeared first on Bitcoinist.net.

Virtual Currency Issued By PBOC Will Not Use Blockchain Technology

Share
Úno 05

Cash is An Interesting Investor Portfolio Diversification Tool Next to Bitcoin

Source: bitcoin

Bitcoinist_Cash

With the stock markets being subject to high volatility these days, investors around the world are looking at different options to diversify their portfolio. While some of them have taken a keen interest in Bitcoin, most of the investors are looking at cash as their preferred solution. This may seem odd to some people, but it makes a ton of sense at the same time as well.

Also read: Simplex Offers Bitcoin Exchanges Risk-Free Credit Card Purchase Solution

What Makes Cash So Appealing To Investors?

Based on statistics provided by Bank of America Merrill Lynch, roughly US$208 billion of inflows can be attributed to cash and money market funds. In this day and age of financial insecurity in the stock markets, cash seems to be the only remaining traditional financial vehicle worth gambling on. But at the same time, various banks around the world are pushing for the abolishment of cash altogether.

Most people would assume investors are flocking to bonds and stocks, as they have been one of the most popular investment vehicles for quite some time now. Nothing could be further from the truth, however, as close to US$50 billion has been pulled out of bonds as well. Only stocks have seen a poor growth in attention, although the numbers are nothing to sneeze at.

Volatility is putting the fear into hearts of investors these days. Local markets are somewhat safer compared to overseas investments, but it is impossible to predict how either will evolve in the coming months. This is part of the reason bonds are far less attractive, as they require investors to “lock” their funds for an extended period.

Furthermore, interest rates remain far too low to make any traditional investment even remotely appealing right now. While cash may not offer any interest rate at all, it is more accessible and usable all over the world. Plus, with cash, it is rather easy to move funds around the world, which is of high importance to investors.

However, cash is losing a small portion of its value at every time, simply because there is a lot of inflation. Central banks keep printing money to provide a financial stimulation when the economy is struggling. At the same time, this decreases the value of all other cash bills and coins in circulation by a small margin.

While cash may not hold all of the answers investors are looking for, it’s one medium of value that will be affected less if a new financial crisis were to hit right now. While the money will lose some value due to increased inflation, at last, there will be no funds missing from savings and retirement accounts, like what happened in 2008.

So What About Bitcoin Then?

Bitcoin holds more answers than cash right now, although the modern digital currency is still struggling with adoption by both merchants and retailers around the world. Even though Bitcoin has the potential to become the new global currency in a few years, banks and governments are thoroughly opposing the idea of letting digital currency take off without regulation.

At the same time, cash is being opposed by these same institutions, and investors seem to flock to that medium of value exchange. Bitcoin could become the next major asset in every investor’s portfolio in the future although there is no guarantee this will ever take place. But the digital currency sure looks appealing right now, as it operates outside of the realm of traditional finance altogether.

What are your thoughts on investors gambling on cash as an investment vehicle? Let us know in the comments below!

Source: CNN Money

Images courtesy of Shutterstock, Bank of America

The post Cash is An Interesting Investor Portfolio Diversification Tool Next to Bitcoin appeared first on Bitcoinist.net.

Cash is An Interesting Investor Portfolio Diversification Tool Next to Bitcoin

Share
Úno 03

German Socialist Democrats’ Proposed War On Cash Will Not Affect Bitcoin

Source: bitcoin

Bitcoinist_Germany

With multiple countries around the world looking to become cashless, things are starting to change slowly but surely. In Germany, the Social Democrats want to impose a limit on cash transactions, as well as get rid of the 500 EUR note completely. However, Germany may prove to be quite a different country when it comes to abolishing cash, as non-cash payment methods are not gaining the upper hand just yet.

Also read: European Commission to Bring Bitcoin Exchanges Under AML Directive to Curb Terrorist Financing

Removing Big Notes And Limiting Cash Transactions

When it comes to paying in cash, the process feels a bit clumsy most of the time. Not only is there a variety of bills to take into account, but there are tons of different coins that represent a specific value. Dealing with change is another issue, as calculations have to be made and the right amount of bills and coins have to be sorted by the cashier.

None of these factors are keeping German citizens from paying with cash though, as it remains the preferred method of payment throughout the country. However, that isn’t keeping the Social Democrats party from proposing a change in the way people deal with cash. Their new proposal would lead to a limit of cash transaction amounts, as well as completely remove the 500 EUR note from circulation.

It has to be said that the 500 EUR note has become rather useless to most consumers and businesses these days. There is hardly any retailer accepting Euro bills valued at more than 100 EUR these days. Getting rid of the 500 EUR bill is a good idea as there is hardly anyone using it in the first place, so it won’t be missed as much.

Statistics indicate how less than 20% of payments made in Germany throughout 2014 were done through plastic cards. Compared to the rest of the European Union, this number is incredibly low. This just goes to show that not every country will be going cashless anytime soon, which can be both a blessing and a curse in the long run.

Imposing a maximum transaction limit of 5,000 EUR will not do much to limit the amount of cash payments being made throughout Germany though.  Very few goods or services cost in excess of 5,000 EUR these days, and it is hard to imagine people would actually use cash to pay such large amounts. Walking around with a lot of cash in one’s pocket is not the safest thing to do these days, and plastic cards provide a valuable alternative.

No Major Influence On Bitcoin Adoption Expected

Unlike what most people might think, this proposal will have little to no effect on Bitcoin adoption in Germany. Even though consumers are not too keen on paying with plastic cards, cash remains king in the country, and Bitcoin will provide a viable alternative to both payment options in due time.

Imposing a maximum cash transaction limit of 5,000 EUR will not keep people from buying Bitcoin either. After all, given the current Bitcoin price, 5,000 EUR will still get one roughly 14.5 bitcoins, which is more than sufficient for an investment. In the end, there will be no direct on Bitcoin adoption in Germany, as these changes will neither benefit nor damage the potential of digital currency.

What are your thoughts on removing the 500 EUR note from circulation? Do cash transaction limits of such magnitude even matter? Let us know in the comments below!

Source: Handelsblatt

Images courtesy of Shutterstock, Wikipedia

The post German Socialist Democrats’ Proposed War On Cash Will Not Affect Bitcoin appeared first on Bitcoinist.net.

German Socialist Democrats’ Proposed War On Cash Will Not Affect Bitcoin

Share