Cryptocurrencies have entered the mainstream, and they are redefining financial transactions. Today, these coins are lent and borrowed. This industry is making waves, partly because the process has many advantages over fiat loans.
Crypto loans, such as the Litecoin loan, have only been available for a couple of years. The only similarity between them and bank loans is that they let people borrow funds. Everything else is drastically different.
You may borrow money from banks for a wide range of purposes, from buying a house to launching a company. The application process is quite lengthy, as the lender must confirm your creditworthiness by looking at your credit score, income, employment situation, assets, etc. To do this, it uses your personal data, such as your Social Security number, bank statements, ID, and proof of employment. Besides,
- the applicant has little to no control over the terms of the final agreement;
- the bank decides how much interest to charge you;
- after the agreement is signed and the funds are received, you have to make monthly payments to pay off the debt gradually.
Crypto coins may be borrowed on centralized and decentralized platforms. The first arrangement is similar to conventional lending, as the platform itself manages the payments.
- The platform takes responsibility for identity verification, KYC checks, and custody.
- Usually, a borrower must deposit crypto coins as collateral, and this deposit is returned after the debt is paid off.
- In case of default, collateral is liquidated.
- At least one fiat currency is involved.
- The user must still share personal information, such as a credit card number and postal address.
In this system, borrowing is based on smart contracts and is limited to digital assets. Loans and repayments are distributed automatically. Moreover, no KYC data is collected. All you need to do is to connect your wallet, determine your preferences and wait for a lender who will agree to them. The process is faster and cheaper than centralized lending and bank loans. On the downside, customer support may not be available, so novices feel confused.
- Crypto loans have important advantages over conventional forms of lending.
- They are more accessible, as you do not need a bank account or a credit score.
- As lending takes place on cryptocurrency platforms, you may earn interest on your coins.
- The lending terms are more flexible.
- The costs are lower than bank fees.
- Sometimes, borrowers do not have to make monthly installments — instead, they just repay their debt in full at a specified time.
To conclude, although cryptocurrencies are viewed as a risky asset, digital landing is actually very secure. Every reputable platform has rigorous security protocols, and it ensures the protection of collateral. Clearly, the pros outweigh the cons.
China: $1.9 Trillion Boost and 88M Jobs by 2030 Possible with Nature-Positive Solutions
Nearly $9 trillion, two-thirds of China’s total Gross Domestic Product (GDP), is at risk of disruption from nature loss. Making China’s economy ‘nature-positive’ could generate $1.9 trillion in additional annual revenue and create 88 million jobs by 2030.
These are the findings of the latest report by the World Economic Forum Seizing Business Opportunities in China’s Transition Towards a Nature-positive Economy.
“Businesses can create a virtuous cycle between people, planet and profit. Investing in and living in harmony with nature will better secure sustained performance and prosperity. Chinese businesses can harness technologies and innovation, while adopting and promoting the UN Global Biodiversity Framework to collectively shape a more resilient and beautiful future for China,” said Gim Huay Neo, Managing Director, World Economic Forum.
The new report, in collaboration with Golden Bee, shows how significant business opportunities can be created if new business practices are adopted across three socio-economic systems: food, land and ocean use; infrastructure and the built environment; and energy and extractives. These systems are interconnected and can unlock untapped economic potential.
The report highlights progress to date, provides case studies and offers recommendations to accelerate new growth across these three systems.
– Food, land and ocean use: Six transitions can generate almost $565 billion in additional annual revenue and create 34 million new jobs by 2030. One of transitions identified would be – eco-tourism, projected to create some $53 billion of additional revenue in China – providing the largest business opportunity in accelerated ecosystem restoration and avoided land and ocean over-exploitation.
– Infrastructure and built environment: Five transitions to transform this system could add roughly $590 billion in annual revenue and create 30 million new jobs by 2030. An example of a key opportunity in this system’s transformation is promoting the use of smart parking – a market worth $94 billion in 2020 but expected to grow to around $219 billion by 2025.
– Energy and extractives: Four transitions could create almost $740 billion in additional revenue per year and 23 million new jobs by 2030. Improving how resources are used or reused throughout the vehicle lifecycle could create roughly $122 billion of commercial value and over 3.7 million jobs by 2030 in China.
“Nature is critical to China’s continued prosperity and social development. It is also at the heart of its ‘ecological civilization’ vision and intrinsically linked to its climate agenda. While our economy is currently facing non-negligible risk from nature loss, this report shows that taking bold action to ‘put nature first’ can secure our economic, social and climate ambitions while creating substantial business value.” said Justin Lin Yifu, Dean, Institute of New Structural Economics, Peking University, Beijing.
The report also sets out how China is well-placed to lead the transition to a carbon-neutral and nature-positive economy by delivering its “ecological civilization” vision and implementing its new national biodiversity conservation strategy.
The potential gains for China in transforming its economy represent nearly 20% of global business opportunities and jobs creation. As the world enters a decisive decade for action on nature and climate, Chinese government and businesses need to work closely to raise global ambition on biodiversity commitments, drive policy and regulatory changes, lead technological innovations, and mobilize investment.
“China is uniquely positioned to lead a global movement towards a nature-positive, carbon-neutral future. As the president and host of the Convention on Biological Diversity’s COP 15, it provides leadership in setting forth an integrated agenda which builds societal, economic and ecological resilience.” said Elizabeth Mrema, Executive Secretary of the United Nations Convention on Biological Diversity.
Vietnam’s economic growth is expected to accelerate to 5.5% in 2022
Vietnam’s economic recovery is likely to accelerate in 2022 as GDP growth is expected to rise to 5.5% from 2.6% in the year just ended, the World Bank’s economic update for Vietnam Taking Stock says.
Assuming the COVID-19 pandemic will be brought under control at home and abroad, the forecast envisions that Vietnam’s services sector will gradually recover as consumer and investor confidence firms, while the manufacturing sector benefits from steady demand from the United States, the European Union, and China. The fiscal deficit and debt are expected to remain sustainable, with the debt-to-GDP ratio projected at 58.8 percent, well below the statutory limit.
The outlook, however, is subject to serious downside risks, particularly the unknown course of the pandemic. Outbreaks of new variants may prompt renewed social distancing measures, dampening economic activity. Weaker-than-expected domestic demand in Vietnam could weigh on the recovery. In addition, many trading partners are facing dwindling fiscal and monetary space, potentially restricting their ability to further support their economies if the crisis persists, which in turn could slow the global recovery and weaken demand for Vietnamese exports.
Careful policy responses could mitigate these risks. Fiscal policy measures, including temporary reduction of VAT rates and more spending on health and education, could support aggregate domestic demand. Support for affected businesses and citizens could be more substantial and more narrowly targeted. Social protection programs could be more carefully targeted and efficiently implemented to address the severe and uneven social consequences of the crisis. Heightened risks in the financial sector should be closely monitored and addressed proactively.
Entitled “NO TIME TO WASTE: The Challenges and Opportunities of Cleaner Trade for Vietnam,” this edition of Taking Stock argues that greening the trade sector should be a priority. Trade, while an important driver of Vietnam’s remarkable economic growth over the past two decades, is carbon-intensive —accounting for one-third of the country’s total greenhouse gas emissions — and polluting.
While Vietnam has started to decarbonize activity associated with trade, more needs to be done to respond to mounting pressures from main destination markets, customers, and multinational companies for greener products and services.
“Trade will be key component of Vietnam’s climate actions in the years to come,” said Carolyn Turk, World Bank Country Director for Vietnam. “Promoting greener trade will not only help Vietnam follow through on its pledge to reach net zero emission in 2050 but will also help it keep its competitive edge in international markets and ensure trade remains a critical income and job generator.”
The report recommends the Government act on three fronts: facilitate the trade of green goods and services, incentivize green foreign direct investment, and develop more resilient and carbon-free industrial zones.
Taking Stock is the World Bank’s bi-annual economic report on Vietnam.
Why cash is a critical resource with no substitute in cashless societies
Many people feel that their right to use cash is at risk. The reason this is so significant might be lost on some, but cash is often an unheralded asset. Sentiment on the subject is so strong in the United Kingdom that a group of stakeholders recently launched a not-for-profit with the aim of safeguarding this ancient and critical resource.
The Cash Supply Alliance (CSA) will promote the widespread acceptance and availability of cash, so it remains a valid payment option for UK consumers of all demographics living anywhere in the country.
“We know that low income, rather than age, is the most accurate indicator for cash dependency,” explains Nigel Constable, Chairman of CSA. For many, it is also about the freedom to use cash, for budgeting, or to avoid card data being captured and monetised by private companies, he adds.
Though it is not taught in schools or discussed much day-to-day, cash plays a broad array of functions not easily replicated by other technologies. One extremely important quality is the capacity to protect an individual’s privacy.
Protection of privacy
The very idea of privacy seems to become more and more diluted each year. The penetration of digital technology in our lives, and in the infrastructure that makes up our societies, makes this a pernicious problem. On top of this, the way in which data is used, for and against us, incentivises the erosion of basic rights, such as the right to a life free of surveillance.
In modern times, our phones and computers are monitored. Unfortunately, this is not fiction nor conspiracy: Facebook and other companies are even exploring the use of special data analysis techniques to mine even our encrypted data, as a way to eke out that little more bit value from users of their services.
Your card transactions already carry quantities of data that can be used to track your life, and your mobile phone never stops talking with the network providers that make its mystical powers function. For many digital payment technologies, privacy is patently impossible; and where that is not the case, companies are actively looking for ways to circumvent obstacles to their profits.
This is an area where cash offers one of the only antidotes: cash is inherently private, requiring no third-party services nor electronic systems to function. In many ways, it is one of the last bastions of privacy in our increasingly monetised society. For many citizens, this safe harbour is something far too important to lose without a fight.
Another strength that cash offers is its power to provide social inclusion. Cash is a public good that belongs in the public domain. Unlike mobile payments or credit cards, the citizens of a country benefit from having banknotes available to them without needing to offer a private enterprise anything in return. In fact, cash is the only means of payment that is entirely public.
This vital quality is part of why Advocate General Giovanni Pitruzzella of the Court of Justice of the European Union stated that cash must be legally protected: “For those vulnerable individuals, cash is the only form of accessible money and thus the only means of exercising their fundamental rights linked to the use of money.”
No other mechanism protects vulnerable people’s rights to conduct payments. That is why, in the opinion of Pitruzzella, it should generally be forbidden to prevent the use of cash for payments.
Cash and emergencies
The power of cash to help those in need goes beyond the routine difficulties of vulnerable people. It can also serve society at the worst possible periods.
During national emergencies, it is well-documented that people turn to cash for assurance. During financial crises, moments of political insecurity, and even most recently with the coronavirus pandemic — it is common for households to store cash as a lifeline. People sometimes fear that systems could break down, or that banks could even fail. In such instances, it offers great peace of mind to know that, no matter what happens, cash is available to keep life moving and food in the home.
This extends to extreme scenarios, such as humanitarian crises too. There are few things more essential for the migrating refugee than the ability to pay for essentials while they complete their uncertain journey. Phones might die, networks fail, but cash is one thing they can be sure of. That is why NGOs often hand out small packets of cash when they intervene in countries or regions in turmoil.
Cash during disruption
Cash has another vital function: it is the stopgap when typical infrastructure fails. When power outages happen, or a technical fault in the ever-expanding digital supply causes disruption — cash is dependably there to catch the economy while it stumbles. When Visa went down around the world, followed weeks later by rival Mastercard’s outages in Europe, each time it was the humble banknote that kept the day’s transactions alive.
As the climate becomes more hostile, we can expect the robustness of our technology systems to be more frequently tested by extreme weather events. In many of these future scenarios, cash use will likely be the decider, determining whether people face a black day for businesses, or merely an inconvenient near-miss for the books. Simply put: it is important to value cash, as it cannot crash.
Cash in the cyber-world
Cash also cannot be hacked. Given the terrifying rise in cyber-attacks and ransomware incidents, many people are understandably sceptical about digital stores of value.
“In the digitalized system, it is easy for someone in Russia, China, whatever, to just shut it off,” according to Björn Eriksson, the former head of Interpol. “[Cash] you can hide in your car, or your stove, or whatever,” he highlights.
Many bankers and business people are also concerned about the trends in cybercrime; they are aware, following research, that the only truly robust means of payment is the banknote. All the rest can be ‘turned off,’ as it were.
With all of these different dimensions in mind, the status of cash as a critical resource becomes self-evident. All the same, whether cash remains available to the public in the coming years might be determined largely by how hard people try in getting their voices heard.
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