By extending the influence of the yuan, China could become the new champion of globalisation.
Is China, aided and abetted by the other BRICS member countries – Brazil, Russia, India and South Africa – making a bid to dislodge the dollar from its global pedestal and replace it with the yuan? And if so, will it help African countries, in particular, to escape from the iron and often onerous grip of the greenback?
Given their transaction anonymity and user-friendliness, cryptocurrencies appeal to extremist groups as they offer a viable alternative to the mainstream financial system and fiat money which are perceived as ‘kafir’ (infidel) currencies. The threat of cyber-driven terrorist financing is expected to grow.
Many people don't value a currency operating outside the traditional financial system. Photo: Zach Copley/flickr
Back in July 2011 we blogged about Bitcoin, the world’s first digitalized, crypto-currency. At the time, many thought Bitcoin a flash in the pan, attracting attention simply because it was still relatively new and exciting – but imagined interest would soon wear off. After three years however, Bitcoin doesn’t show signs of slowing down. Our last post touched upon Bitcoin’s use for undertaking illicit activities and the lack of institutional involvement. I’m going to revisit these themes and also discuss Ripple – the next currency you’ve never heard of.
Due to the increased anonymity associated with transactions undertaken using Bitcoin, there has been a fear that illegal acts are being made a lot easier, and a lot safer to conduct. A recent article for PCPro claimed that Bitcoin “is now the currency of choice for the discerning cybercriminal.” This image problem has not been helped by articles associating bitcoins with Silk Road, an online ‘underground’ marketplace (accessible only via Tor) where all kinds of illicit goods may be purchased – weaponry, forgeries and drugs – and where the digital currency is the only accepted method of payment. This undoubtedly sullies Bitcoin’s reputation, and to a disproportionate degree: The Internet itself has facilitated commerce, and necessarily the crime which accompanies any marketplace. But security agencies can be just as resourceful as criminals, developing network analysis techniques based on statistical methodologies to detect suspicious transaction flows. Rather than a destructive force, the appearance of Bitcoin and its use for ‘bad’ as well as ‘good’ is simply another reiteration of the cat-and-mouse game played out every day between criminals and the law. » More
Direct democracy from a geek’s perspective. Image: TraderTim/flickr
Bitcoin is the world’s first decentralized, digital currency. Its extraordinary performance over the last half year has caused quite some stir, not only among ‘cyber geeks’. Users and supporters see Bitcoin as a technological breakthrough and expect its spending possibilities to increase as exponentially as its price. Meanwhile, critics point to many of these same characteristics as flaws. They are waiting for the bubble to burst, calling it a structurally flawed experiment.
How it works: This video – made possible with donations from the Bitcoin community– explains the basic idea behind the new currency:
To acquire Bitcoins, users can buy them on a trading platform or become ‘miners.’ The latter requires hardware and electricity – both usually purchased with conventional money. » More
Can glitzy modernity be reconciled with the country’s Islamic legacy? Photo courtesy of Maher Alone/flickr
In a rather widely reported move, PAS, the conservative Islamic opposition party that rules several states in northern Malaysia, recently launched a publicly distributed ‘Islamic currency’ in Kelantan state. The gold and silver coins, worth $180 and $4 respectively, will be used in transactions by 1,000 outlets in the state and will become, so the eager authorities say, an optional means of payment for civil servant salaries and a currency for the payment of Islamic alms, or Zakat. The state government also announced that gold bars would be issued for bigger investments and that coins worth $630,000 had sold out on the first days of trading.
The CEO of Kelantan Golden Trade, the state company in charge of implementing the currency reform stated that: “The arrival of these coins mark the end of 100-year old Darurah [extreme necessity for a Muslim] of tolerating the injustice of paper money, from now on Darurah is over, at least for people in Kelantan.”
Never mind the practicalities of hauling around heavy pieces of gold and silver (a commentary in Malaysia’s most popular daily, The Star, suggested, rather facetiously, that people should start carrying around bags or pouches for the coins), the political implications, particularly the deafening silence on the part of the Malaysian federal government and the central bank, are striking. » More