Perhaps unsurprisingly, and presumably under pressure from the US Government, the Belgium-based Society for Worldwide Interbank Financial Telecommunication, better known as SWIFT, cut off Iranian banks and other Iranian financial institutions from access to the SWIFT network.
This move effectively precludes Iranian banks from settling their import and export bills and exerts more pressure on the already depressed Iranian Rial. While the broader merits behind the decision and its long term impact will be debated ad nauseum, what is beyond debate is that this demonstrates in one fell swoop, the implicit threat of punitive measures and violence that centralization endangers; A hegemon unchecked; A single dominant entity unilaterally weaponizing its economic power and wielding it indiscriminately against another entity or group of entities.
Predictably, Iran is not lying down, and is responding in crypto; it is in the process of creating a rial-pegged digital currency that it plans to use as a token and as a payment instrument that will be used in payments and banking settlements. After Venezuela’s widely-panned ‘Petro’ – a state-backed digital currency whose value is tied to crude oil prices – and the backlash it received from both crypto and political communities around the world, the crypto Rial might not be a significantly better solution. In the absence of the traditional payment rails, however, and with the benefit of hindsight informing a better token design as compared to the Petro, Iran could at the minimum leverage the blockchain to transact with its trading partners. However, given that it is issued by a centralized entity backed by a highly volatile Rial, it will never reach the scale of a truly decentralized crypto. Not everyone can create a Ripple now, can they?
More broadly though, there are a few things worth pointing out:
“…..we might well be seeing the beginning of a new ‘currency’ war, a paradigm war rather. We are seeing a fragmentation of consensus realities, with a multiplicity of blockchain frameworks, this time broadly around political and ideological lines. Unlike much of the Anglo-speaking world, China (and to an extent Russia), have had their own Alibabas, Baidus & WeChats for every Amazon, Google and Facebook. If we agree that currency is just a consensus reality, whether it be dollar or bitcoin, we should not be surprised that Governments are now influencing the definition and the emergence of new consensus realities in the spheres that they can control. Admittedly, it is far easier to do so in China than in most places in the world, given the ’Great Firewall of China’. Representing the ‘Western Bloc,’ this time around, we have ETH and its multiple ERC-20 offshoots, including 0x, the decentralized exchange. The Chinese have NEO, QTUM, even a planned NEX decentralized exchange as their answer to Kyber/0X. Certain features of the blockchain make it hugely attractive to regimes that have a command-and-control mindset, especially when it is coupled with the ability to design a ‘custom’ version of the blockchain and unilaterally impose this version on a pliant populace, that vast majority of which do not have the international or transborder physical or digital mobility to protect themselves against such regime. While the Venezuelan ’Petro’ might prove to be nothing more than a desperate fourth-quarter hail-mary from a flailing regime, the Chinese Neo Council, the Russian WAVES platform, and potential efforts in this direction by India et al will be interesting in the way they evolve and redefine a new era characterized by an unprecedented overlap of technology, economics and politics”
“GMO Profits Backed by Crypto” Japanese IT giant GMO Internet has published its third quarter report Monday, Nov. 12, revealing a “historical performance” of its crypto-related sectors despite “the harsh external environment”. GMO claims its crypto businesses, including mining equipment production and its crypto exchange, have gained 2.6 billion yen ($22.8 million) in revenue over the third quarter “in just a year since the launch”.
“Bitfinex Revises Fee Structure” Hong Kong-based crypto exchange Bitfinex has announced that it’s revising its fee structure, in an update that it issued at the start of the week. It affects external wire withdrawals, which Bitfinex estimates account for 1% of its customer base. Lower value and demand customers won’t be affected by the changes. However, those who are looking to withdraw over $1m in a 30 day period will now find themselves subject to a 3% commission cost for the privilege.
“Millennials – “Crypto \m/” ” Crypto still remains as a preferable long-term investment amongst millennial investors. In a study, 30 percent of the respondents disclosed an interest in investigating and studying cryptocurrencies with the intent to invest in the short-term. That is more than 55 percent of millennials already invested or planning to invest in the emerging asset class.
“Venezuela to Present Petro as Oil Unit”The Venezuelan government is reportedly going to present its oil-backed cryptocurrency, the Petro, to the Organization of Petroleum Exporting Countries (OPEC) as a unit of account for oil. According to local news, the country’s petroleum minister and the president of state-run oil and natural gas company PDVSA, Manuel Quevedo, stated that Petro transactions will begin in the “first semester of 2019”.