According to China Finance, an edition of People’s Bank of China, China should become the first country to launch into circulation a digital national currency. Reports by Reuters say a move of this kind will facilitate China’s efforts to expand the international status of yuan and reduce the country’s dependence on the international system of payments in dollars.In addition, the right to issue and control of digital currency will spill into a “new battlefield” of competition between sovereign states.
According to reports by the Bank of International Settlements, nearly four fifths of the central banks worldwide have been looking into the possibility of creating national digital settlements systems. The key element of such systems will be national digital currencies, also known as Central Bank Digital Currencies (CBDC). CBDC is virtual money which is controlled by the national or supranational central bank, as in the case of the European Central Bank, and which exists only in the form of information recorded on computer memory chips and is not issued in cash.
CBDC is fully controlled by state-run financial institutes. Unlike most present-day crypto currencies, these currencies are emitted on a centralized basis and are equivalent to the traditional “paper” money in the digital form. The Central Bank, which issues CBDC, acts as both a regulator and a holder of the accounts of all owners of the national digital currency. Every CBDC unit acts as an equivalent to a paper banknote. Overall, CBDC is supposed to assume the best properties of crypto currencies – convenience and security – and borrow the time-tested features of the traditional banking system: regulation of currency circulation and its support with appropriate reserves.
China is acting as a pioneer in introducing digital national currencies. The first theoretical research into digital yuan got under way in 2014, at the initiative of People’s Bank of China, and the research laboratory on digital currencies appeared in 2017. At the end of April 2020 a spokesperson for People’s Bank of China confirmed that digital yuan tests were under way in several cities of China: Shenzhen, Suzhou, Chengdu, Xiong’an, and “on the sites of 2022 Winter Olympics” in Beijing. The practical work is carried out by “relevant structures” in the person of commercial banks and settlements systems. Such a structure makes it possible to avoid concentration of risks at the level of Central Bank and to cut spending on creating and developing the corresponding infrastructure. As for other countries, Sweden has come closest to starting testing the digital currency – e-crown.
China’s CBDC is considerably different from the current private crypto currency projects. Emission is carried on a centralized basis, while the reputation of the Central Bank is beyond doubt; this makes blockchain technology, which is normally key for private crypto currencies, superfluous. Should the proposal to issue digital yuan receives support, these money units will become part of Defense Ministry aggregate, along with banknotes, coins and deposits on the accounts of People’s Bank of China. It is necessary to point out that at present, there is no talk of replacing all cash with digital currency.
Sceptics believe that the “digital yuan” will preserve for the near future the same restrictions, for example, in terms of convertibility, as the fiat one. They say “Beijing’s main objective is not to internationalize yuan, but to establish a total control of people’s and companies’ payments, fight against shadow economy and corruption”. What is meant is not “the invention of money yet again”, but that “China’s prospects relative to the status of the reserve currency depends on the same factors as applicable to the emitter of this currency”.
Nevertheless, the geopolitical consequences of CBDC emission could be fairly significant. A few years ago Newsweek pointed out that the US authorities and special services began to keep a close eye on the first private crypto currency, bitcoin, from the very first days of its appearance. What they fear most is that “America’s foes”, be it governments or non-governmental organizations, will manage to create a financial network which will not in the least depend on the US dollar. In that case the United States would lose an important instrument of non-military pressure which they could use against opponents and enemies.
At present, the dollar accounts for more than four fifths of all currency exchange transactions worldwide. As a result, all Washington needs to do to block the unwelcome financial operations is to put suspected individuals, organizations or countries on the “blacklist” to be sent to all banks across the globe. For fear of losing an opportunity to make payments in dollars an overwhelming majority of financial institutions obediently follow the US instructions. In this context, Washington’s concerns about private crypto currencies are of legal, rather than political nature.
Another matter is if and when emission of crypto currencies becomes the business of states or inter-state institutions. In this case unilateral sanctions could lose sense; and so could the withdrawal of one country, even such a powerful one as the USA, from multilateral agreements the provisions of which must be implemented under threat of facing sanctions. Finally, Washington will no longer be able to freely track down monetary flows in dollars.
State digital currencies threaten such a weighty instrument of US political influence as the inter-bank settlements system SWIFT. They guarantee nearly instant payments without participation of the dollar. Amid the growing anger over the escalation of US sanctions, Canada, Singapore, Hong Kong and Thailand have been testing exchange of information and payments without SWIFT and American correspondent banks. The European Central Bank has set up a working group to look into the possibilities of establishing interaction of national digital currency projects, with the participation of Canada, Japan, Sweden, Switzerland, and Britain.
Considering this, the appearance of the digital yuan could be particularly threatening for the US. Provided Beijing exerts efforts to this end, there will quickly appear a circle of countries in Africa, in the Middle East and in South East Asia which will conduct trade without using the US dollar.
China’s top positions in digital finance technology enables it to offer an extensive range of infrastructure solutions, both on the government level, and for end consumers, private businesses and private individuals. These include making payments, receiving and paying off loans, payment terminals, online purchases and online payments for services. In their turn, measures of this kind will boost the demand for yuan as a reserve currency. China will de facto receive the right of veto to any decision by other countries to impose sanctions.
An example of possible geoeconomics consequences of such a development was presented a year ago by Danish Saxo Bank as part of a series of its usual “shocking forecasts”. Under one of them, by 2020 there will appear “a new reserve asset”, an Asian Digital Right (ADR), and the Asian Bank of Infrastructure Investments could act as an emitter. ADR would become “a clear step” towards “removing the American dollar from regional trade” and apparently, from global trade as well. Under such conditions, the dollar is expected to weaken “by 20% against ADR and by 30% — against gold” “in just a few months”.
For today, there exist several scenarios of the formation of digital currency “multipolarity”. Amid the current trade and financial confrontation between the USA and China and should China’s progressive movement to expand its presence in global economy persist, the most likely development is a movement towards a “bipolar” system of digital currencies, the dollar and the yuan, with an important but mainly regional role of digital euro and Japanese yen.
However, in the conditions of the growing concern on the part of international economic and financial institutions over the escalation of the dollar-yuan confrontation, there is a chance for “a third party” to gather strength and transform into a global digital instrument of payments and a reserve asset. The first candidate is the currently hypothetical “digital euro”. What could play into the hands of an ECB-emitted digital currency is the political “aloofness” of the main institute of monetary policy in the euro zone. From time to time the European Central Bank comes under criticism from the finance authorities of nearly every member country of the euro zone, which makes it “equally distant” and consequently, potentially attractive for international trade entities.
A third scenario provides for the appearance of a “global”, “worldwide digital currency”. For example, “digitalization” of Special loan drawing rights of the IMF. The idea of “a synthetic hegemon currency” based on top currencies was voiced not long ago by former President of the Bank of England Mark Carney. At the same time, trends towards economic division along with the corona crisis-caused need of many countries for re-industrialization, and also the desire to protect national banking systems, may breathe a new life into the idea of “non-state” international digital currency or currencies. What could become an interim stage is a system where state, private and corporate digital payment instruments co-exist side by side.
In general, a national digital currency makes it possible to overcome such drawbacks of private crypto currency projects as instability of the rate, and limited usage. The issue of a crypto currency by a central bank reduces to zero the number one problem of such monetary instruments – the problem of trust, including on the part of government agencies and monetary policy regulators.
The arrival of a digital currency, emitted by the monetary authorities of one of the world’s top economies, would make, if not a breakthrough, then an economic and political effect. It would reduce considerably the importance of a number of traditional instruments of international politics. Simultaneously, it would trigger the arrival of new policies, if not paradigms.
However, at present, the main challenge for digital payment instruments is whether it is possible to create a technology which would be immune to external influence and easy to use. Unforeseen “influxes” of users regularly lead to “collapses” of government electronic resources across the globe, even in the absence of intentional attacks. In the case of a national digital currency, nobody can predict what will happen in the event “the service is denied”.
From our partner International Affairs
Sustainable Agriculture in Modern Society
Now everybody is seeing the world is changing fast in this 21st century and many industries and modern buildings are also developing all over the world. But the land areas for farming are becoming narrower and narrower. Moreover, the global population is increasing rapidly and the earth becomes a crowded planet. But the younger people who are interested in agriculture are becoming less and less. There might be some young people who even think that they get foods from grocery stores because the younger generation are used to buy many kinds of ready-made foods such as fruits and vegetables easily from supermarkets. Recently, in the developed countries, the average age of many farmers is over 50 years old and the numbers of young farmers are decreasing. The shortage of young farmers can become a crisis in the future of the developed world.
In modern days, most young adults cannot see the difficult lives of farmers beyond the curtain. The farmers have to pass their whole life through a tough living in farming and sell their products at very low profit to many profiteering companies because they don’t have much choices. It is a sad story for farmers but truly happening in these modern days.
Today I would like to point out that we should not forget the role of agriculture which is very fundamental and essential for building a nation. Farming is an age-old profession that supported the settlement of human beings for thousands of years to survive on this planet. Agriculture is very important for the development of a nation because it provides the trading and employment, supply the foods and textiles and that can lead to the rise in gross domestic product (GDP) of a nation. Agriculture plays a crucial role in economy of a developing nation where majority of population is in rural areas and agriculture is the main source of job in many underdeveloped areas. Many families in developing countries live depending on farming for their livelihood. So, it can be even said that developing agriculture is an important step to reduce poverty and hunger in many developing countries. Agriculture support nutrients rich foods that are essential requirements for our healthy life because nutrients rich foods provide energy for our body, essential nutrients for our vital organs such as brain and heart etc, and enhance our immune system. So, agriculture is necessary for a flourishing and joyful life of human being.
Especially let’s see my home country, as data from Food and agriculture organization (FAO) of the United Nations, “The agriculture supports 37.8 % of gross domestic product of Myanmar, contributed to 25-30% of total export earnings and employs 70 % of the labour force”. Humans cannot survive without agriculture. When there is no more agriculture, it will end with starvation and collapse in economy. It will cause a serious failure in modern civilization.
Nowadays, modern farming is largely evolved into industrial agriculture where many kinds of chemical fertilizers are being used to induce massive production. Industrial agriculture is beneficial to economic development because it can cause the crops growing faster than in the traditional agriculture. The industrial agriculture can provide more enough foods for growing population in modern civilization. However, it is not sustainable because it cannot protect the benefits of the society and our green planet in the long run. Chemicals used in agriculture are destroying the soil where is left with damaged soil fertility and this area can’t be reused in the future. This is a huge affect to sustainability of our green environment.
Modern agriculture has many issues related to water scarcity, soil erosion, climate changes and etc. To be sustainable in agriculture, we must focus on solutions of these issues. The sustainable agriculture will focus on three bottom lines that is environmental, economical and social.
The sustainable agriculture involves many practices such as using the organic fertilizers in farming, growing drought resistant crops, breeding biodiversity in farms, modified irrigation systems and others. Sustainable agriculture is more suitable to practice for the future of the green earth than industrial agriculture. It is very important to promote awareness of sustainable agriculture and issues related to environmentally toxic practices in agricultures among local farmers. And I believe that it can cause many advantages for economic development if farmers can work systematically with sustainable practices in their farming and the local authority can provide farmers with more technological skills and lending some funding to practice sustainable ways in agriculture. With the willingness to participate for environmental heath at the enough profit for incomes of daily living life, I hope famers will become socially responsible persons.
And another one more point, in this digitalization era, we should certainly apply digital technologies in sustainable agriculture. By developing digital farming, it will help farmers to get easier access to source of many information related to agricultural practices. Government in developing countries should support to develop digital farming as rapidly as possible for the poor farmers to get proper profits and to work in environmentally friendly practices. Since poor countries already have enough labour force, they just need many financial aid and technology supports to grow into sustainable agriculture.
I believe that it is a responsibility for our humans that we should not forget something that had supported our existence on this earth. We should work out for development of traditional agriculture into modern agriculture with the best sustainable ways. As being a part of this society, we must help each other, we must protect the sustainability of this green earth, Biodiversity and this is also beneficial for long-term existence of our human beings on this earth. Let me end this talk by suggesting everyone to promote sustainable agriculture in your surrounding local farming.
The Blazing Revival of Bitcoin: BITO ETF Debuts as the Second-Highest Traded Fund
It seems like bitcoin is as resilient as a relentless pandemic: persistent and refusing to stay down. Not long ago, the crypto-giant lost more than half of its valuation in the aftermath of a brutal crackdown by China. Coupled with pessimism reflected by influencers like Elon Musk, the bitcoin plummeted from the all-time high valuation of $64,888.99 to flirt around the $30,000 mark in mere weeks. However, over the course of the last four months, the behemoth of the crypto-market gradually climbed to reclaim its supremacy. Today, weaving through national acceptance to market recognition, bitcoin could be the gateway to normalizing the elusive crypto-world in the traditional global markets: particularly the United States.
The recent bullish development is the launch of the ProShares Bitcoin Strategy ETF – the first Bitcoin-linked exchange-traded fund – on the New York Stock Exchange. Trading under the ticker BITO, the Bitcoin ETF welcomed a robust trading day: rising 4.9% to $41.94. According to the data compiled by Bloomberg, BITO’s debut marked it as the second-highest traded fund, behind BlackRock’s Carbon fund, for the first day of trading. With a turnover of almost $1 billion, the listing of BITO highlighted the demand for reliable investment in bitcoin in the US market. According to estimates on Tuesday, More than 24 million shares changed hands while BITO was one of the most-bought assets on Fidelity’s platform with more than 8,800 buy orders.
The bitcoin continued to rally, cruising over the lucrative launch of BITO. The digital currency rose to $64,309.33 on Tuesday: less than 1% below the all-time high valuation. In hindsight, the recovery seems commendable. The growing acceptance, albeit, has far more consequential attributes. The cardinal benefit is apparent: evidence of gradual acceptance by regulators. “The launch of ProShares’ bitcoin ETF on the NYSE provides the validation that some investors need to consider adding BTC to their portfolio,” stated Hong Fang, CEO of Okcoin. In simpler terms, not only would the listing allow relief to the crypto loyalists (solidifying their belief in the currency), but it would also embolden investors on the sidelines who have long been deterred by regulatory uncertainty. Thus, bringing larger, more rooted institutional investors into the crypto market: along with a surge of capital.
However, the surging acceptance may be diluting the rudimentary phenomenon of bitcoin. While retail investors would continue to participate in the notorious game of speculation via trading bitcoin, the opportunity to gain indirect exposure to bitcoin could divert the risk-averse investors. It means many loyalists could retract and direct towards BITO and other imminent bitcoin-linked ETFs instead of setting up a digital custodianship. Ultimately, it boils down to Bitcoin ETFs being managed by third parties instead of the investor: relenting control to a centralized figure. Moreover, with growing scrutiny under the eye of SECP, the steps vaguely intimate a transition to harness the market instead of liberalizing it: quiet oxymoronic to the entire decentralized model of cryptocurrencies.
Nonetheless, the listing of BITO is an optimistic development that would draw skeptics to at least observe the rampant popularity of the asset class. While the options on BITO are expected to begin trading on the NYSE Arca Options and NYSE American Options exchanges on Wednesday, other futures-based Bitcoin ETFs are on the cards. The surging popularity (and reluctant acceptance) amid tightening regulation could prove a turn of an era for the US capital markets. However, as some critics have cited, BITO is not a spot-based ETF and is instead linked to futures contracts. Thus, the restrain is still present as the regulators do not want a repeat of the financial crisis. Nevertheless, bitcoin has proved its deterrence in the face of skepticism. And if the BITO launch is to be marveled at, then the regulations are bound to adapt to the revolution that is unraveling in the modern financial reality.
Is Myanmar an ethical minefield for multinational corporations?
Business at a crossroads
Political reforms in Myanmar started in November 2010 followed by the release of the opposition leader, Aung San Suu Kyi, and ended by the coup d’état in February 2021. Business empire run by the military generals thanks to the fruitful benefits of democratic transition during the last decade will come to an end with the return of trade and diplomatic sanctions from the western countries – United States (US) and members of European Union (EU). US and EU align with other major international partners quickly responded and imposed sanctions over the military’s takeover and subsequent repression in Myanmar. These measures targeted not only the conglomerates of the military generals but also the individuals who have been appointed in the authority positions and supporting the military regime.
However, the generals and their cronies own the majority of economic power both in strategic sectors ranging from telecommunication to oil & gas and in non-strategic commodity sectors such as food and beverages, construction materials, and the list goes on. It is a tall order for the investors to do business by avoiding this lucrative network of the military across the country. After the coup, it raises the most puzzling issue to investors and corporate giants in this natural resource-rich country, “Should I stay or Should I go?”
Crimes against humanity
For most of the people in the country, war crimes and atrocities committed by the military are nothing new. For instances, in 1988, student activists led a political movement and tried to bring an end to the military regime of the general Ne Win. This movement sparked a fire and grew into a nationwide uprising in a very short period but the military used lethal force and slaughtered thousands of civilian protestors including medical doctors, religious figures, student leaders, etc. A few months later, the public had no better options than being silenced under barbaric torture and lawless killings of the regime.
In 2007, there was another major protest called ‘Saffron Uprising’ against the military regime led by the Buddhist monks. It was actually the biggest pro-democracy movement since 1988 and the atmosphere of the demonstration was rather peaceful and non-violent before the military opened live ammunitions towards the crowd full of monks. Everything was in chaos for a couple of months but it ended as usual.
In 2017, the entire world witnessed one of the most tragic events in Myanmar – Again!. The reports published by the UN stated that hundreds of civilians were killed, dozens of villages were burnt down, and over 700,000 people including the majority of Rohingya were displaced to neighboring countries because of the atrocities committed by the military in the western border of the country. After four years passed, the repatriation process and the safety return of these refugees to their places of origin are yet unknown. Most importantly, there is no legal punishment for those who committed and there is no transitional justice for those who suffered in the aforementioned examples of brutalities.
The vicious circle repeated in 2021. With the economy in free fall and the deadliest virus at doorsteps, the people are still unbowed by the oppression of the junta and continue demanding the restoration of democracy and justice. To date, Assistant Association for Political Prisoner (AAPP) reported that due to practicing the rights to expression, 1178 civilians were killed and 7355 were arrested, charged or sentenced by the military junta. Unfortunately, the numbers are still increasing.
Call for economic disengagement
In 2019, the economic interests of the military were disclosed by the report of UN Fact-Finding Mission in which Myanmar Economic Corporation (MEC) and Myanmar Economic Holding Limited (MEHL) were described as the prominent entities controlled by the military profitable through the almost-monopoly market in real estate, insurance, health care, manufacturing, extractive industry and telecommunication. It also mentioned the list of foreign businesses in partnership with the military-linked activities which includes Adani (India), Kirin Holdings (Japan), Posco Steel (South Korea), Infosys (India) and Universal Apparel (Hong Kong).
Moreover, Justice for Myanmar, a non-profit watchdog organization, revealed the specific facts and figures on how the billions of revenues has been pouring into the pockets of the high-ranked officers in the military in 2021. Myanmar Oil & Gas Enterprise (MOGE), an another military-controlled authority body, is the key player handling the financial transactions, profit sharing, and contractual agreements with the international counterparts including Total (France), Chevron (US), PTTEP (Thailand), Petronas (Malaysia), and Posco (South Korea) in natural gas projects. It is also estimated that the military will enjoy 1.5 billion USD from these energy giants in 2022.
Additionally, data shows that the corporate businesses currently operating in Myanmar has been enriching the conglomerates of the generals and their cronies as a proof to the ongoing debate among the public and scholars, “Do sanctions actually work?” Some critics stressed that sanctions alone might be difficult to pressure the junta without any collaborative actions from Moscow and Beijing, the longstanding allies of the military. Recent bilateral visits and arm deals between Nay Pyi Taw and Moscow dimmed the hope of the people in Myanmar. It is now crystal clear that the Burmese military never had an intention to use the money from multinational corporations for benefits of its citizens, but instead for buying weapons, building up military academies, and sending scholars to Russia to learn about military technology. In March 2021, the International Fact Finding Mission to Myanmar reiterated its recommendation for the complete economic disengagement as a response to the coup, “No business enterprise active in Myanmar or trading with or investing in businesses in Myanmar should enter into an economic or financial relationship with the security forces of Myanmar, in particular the Tatmadaw [the military], or any enterprise owned or controlled by them or their individual members…”
Blood money and ethical dilemma
In the previous military regime until 2009, the US, UK and other democratic champion countries imposed strict economic and diplomatic sanctions on Myanmar while maintaining ‘carrot and stick’ approach against the geopolitical dominance of China. Even so, energy giants such as Total (France) and Chevron (US), and other ‘low-profile’ companies from ASEAN succeeded in running their operations in Myanmar, let alone the nakedly abuses of its natural resources by China. Doing business in this country at the time of injustice is an ethical question to corporate businesses but most of them seems to prefer maximizing the wealth of their shareholders to the freedom of its bottom millions in poverty.
But there are also companies not hesitating to do something right by showing their willingness not to be a part of human right violations of the regime. For example, Australian mining company, Woodside, decided not to proceed further operations, and ‘get off the fence’ on Myanmar by mentioning that the possibility of complete economical disengagement has been under review. A breaking news in July, 2021 that surprised everyone was the exit of Telenor Myanmar – one of four current telecom operators in the country. The CEO of the Norwegian company announced that the business had been sold to M1 Group, a Lebanese investment firm, due to the declining sales and ongoing political situations compromising its basic principles of human rights and workplace safety.
In fact, cutting off the economic ties with the junta and introducing a unified, complete economic disengagement become a matter of necessity to end the consistent suffering of the people of Myanmar. Otherwise, no one can blame the people for presuming that international community is just taking a moral high ground without any genuine desire to support the fight for freedom and pro-democracy movement.
Women in leadership ‘must be the norm’
We can no longer exclude half of humanity from international peace and security matters, the UN chief told the Security...
Maximizing Nickel as Renewable Energy Resource and Strengthening Diplomacy Role
Authors: Nani Septianie and Ramadhan Dwi Saputra* The development of the times and technology, the use of energy in the...
To Prevent a Nuclear War: America’s Overriding Policy Imperative
Abstract: Though current US defense policy centers on matters of conventional war and terrorism, other problems remain more existentially worrisome....
Gender Mainstreaming and the Development of three Models
The field of gender mainstreaming plays a central role in the debate of critical feminist International Relations (IR) theorists. Reading...
No safe harbour: lifting the lid on a misunderstood trafficking crime
The crime of harbouring, in which victims of human trafficking are accommodated or forced to stay in a specific location,...
Why specific Muslim community bothering Indian BJP government
India, a place with a strong political history governed and ruled by Muslims and colonial powers during their regime setup....
Conditions worsen for stranded migrants along Belarus-EU border
At least eight people have died along the border between Belarus and the European Union, where multiple groups of asylum-seekers, refugees and migrants have been...
Science & Technology3 days ago
China beats the USA in Artificial Intelligence and international awards
Middle East3 days ago
North Africa: Is Algeria Weaponizing Airspace and Natural Gas?
Defense4 days ago
The Road Leading Nowhere
Defense2 days ago
American submarine mangled in the South China Sea
Middle East3 days ago
Breaking The Line of the Israel-Palestine Conflict
Americas3 days ago
Iran poll contains different messages for Biden and Raisi
South Asia4 days ago
Changing complexion of “militancy” in the occupied Kashmir
Tech News4 days ago
Paperless Travel Pilot Outlines Best Practices for Digital Travel Experience