Latest in Crypto, NFTs, and Web3

Hello, Somi Arian here! Today I’d like to introduce you to my newest endeavour.

Nowadays we’re all terribly busy, and with the cracking speed at which the world moves it is often difficult to keep up with everything that’s going on, especially in areas that seem to change and grow every day, like Web3, Crypto, and NFTs.?

That’s why I’ve decided to make this newsletter, to help you keep track of the latest and most relevant news and developments in the space.

So without further ado, let’s dive right into our first edition of Latest in Crypto, NFTs, and Web3 by Somi Arian.

Inflation Reaches an All-Time High in the USA

These past weeks inflation has hit an all-time high in the United States. It accelerated to 8.5% in March, the highest year over year inflation jump since 1981. The month over month increase was 1.2%, also the highest jump since 2005.

Now, people were expecting inflation rates to rise due to the two years of pandemic exacerbated by the Russian-Ukrainian war. The Biden administration has been quick to blame it all on Putin, calling it “Putin’s Price Hike” which just seems more than a little exaggerated since we have been in a global pandemic for a little over two years, the first time the world has ever been completely shut down economically, so of course, the war is not the only factor driving this inflation.

The US’s Federal Reserve is trying to mitigate the consequences of this inflation, by shifting monetary policies in order to drive it down without entering a recession as happened back in the seventies and eighties. The strategy used for this will have to depend on the type of inflation we experience.?

Stay tuned for further developments in this area in our next issue.

The Big Players Join the Game

On another note, it seems that big corporations are racing to wield control over the developing metaverse, Web3, Crypto, and NFT space:

• Black Rock, the world’s largest asset manager, has led a 400 million dollar round on Circle, whose main product is USDC, they will also manage assets for USDC cash reserves which are now about 50 billion worth, and they'll also enter a broader strategic partnership with Circle, which will include exploring capital market applications for USDC. The CEO of Circle said this was a huge milestone for the wide adoption of digital currencies.
• Lego and SONY are pumping 2 billion dollars into Epic Games (creators of Fortnite) to build a Metaverse.
• MasterCard launched a crypto credit card with Nexo this week.
• After heavily criticising Apple’s 30% in-app purchases, Zuckerberg’s Meta declares it will charge a platform fee of 30% for sales made on Meta Quest, its virtual reality system (which used to be called Oculus). The company also stated that they would charge a 25% sales fee in Horizon Worlds, Meta’s metaverse system. Charging a total of 47.5%, leaving creators and small businesses with only 52.5% (before taxes) for their creations. Seems a little hypocritical doesn’t it?
• Elon Musk wants to completely purchase Twitter for 54.20 USD per share (about 42 billion dollars total) to take the company private so that he can make the “necessary adjustments” to take it to its full potential, something, he claims, is necessary for free speech.

The United State’s Treasury Secretary Changes Her View on Crypto

Going into the subject of digital currencies, the US’s Treasury Secretary, Janet Yellen, seems to have changed her opinions about crypto. At the beginning of her time in office, Secretary Yellen said she was going to be a tough partner for crypto, but in a recent speech a few days ago she has widely changed her position.?

Why? Is it because of the Biden administration’s Executive Order on Crypto, or because she has realised the potential crypto has, especially in light of the sanctions against Russia? I think it’s a little bit of both.

• The Race For The World’s First CBDC

Many world nations are pushing to be the first to create a central bank digital currency, including Nigeria’s eNaira, the Eastern Caribbean Central Bank’s DCash, and the Bahama’s Sand Dollar project, amongst others.

But I want to concentrate now on the projects being developed by the world powers, like China, the United States and the European Union.

• China has been experimenting with this for longer, with the e-CNY wallet pilot operated in ten regions across China. According to the Official People’s Bank of China, about 87.5 billion yuan (about 13.7 billion USD) have already been transacted using this digital currency. The e-CNY wallet is available for download in Chinese app stores but only usable in the aforementioned ten regions which have acted as pilot cities. The e-CNY is supposed to complement, instead of replace, existing payment methods like Alipay and WeChatPay.
• In the EU, the European Central Bank’s Legarde seems to support the acceleration of efforts to produce a Digital Euro. According to a press conference last week, the EU has a two-year plan of investigation that began last October. The Russian-Ukrainian war has accelerated this feat.
• In the USA, in March, the Biden Administration released the Executive Order on Cryptocurrencies encouraging federal agencies to take a unified approach to regulate the sector. He also required the government to assess the risks and benefits of setting up a digital dollar. This Executive Order placed urgency on developing this digital dollar and assessing tech infrastructure for an American CBDC. This effort promotes US participation in multi-country experimentation and ensures leadership internationally to promote CBDC development that is consistent with US priorities and democratic values. Digital dollar efforts seem to be coming from all corners with Project Lithium, the Fed’s project Hamilton, the Digital Dollar Projects, UST, USDC, Tether, etc.

The IMF’s Latest Global Stability Report Puts Crypto & FinTech in the Spotlight

The International Monetary Fund’s Global Stability Report, dated April 2022, uses the backdrop of the Ukraine-Russian war as a way of describing how cryptocurrencies could potentially become a problem in the future despite there being no evidence of this happening right now.

Amongst the subjects discussed in said report are the “issues” of using cryptocurrencies as means to avoid sanctions, the fragmentation of the old banking infrastructure, and a call to action for policymakers to regulate and control digital assets like cryptos in order to prevent the degradation of our economical and financial system which they referred too as “cryptonization risks”.

I don’t know about you, but it sure sounds to me like all these shifts in the system have the older generation a bit spooked?

Like Flared Jeans, Will Stagflation Make a ComeBack?

The term stagflation has been mentioned a lot in these past weeks, if you’ve never heard the term before, here’s a simplified definition:

STAGFLATION: The double trouble of a stagnant economy becoming best buddies with double-digit inflation.?

Something like this happened back in the 70s and 80s because of two oil crises that doubled the price of crude oil and threw many Western nations into recession. Today, many economists fear, that this situation will in fact make a comeback now due to the high inflation rates being experienced because of the pandemic related supply chain disruptions and now the Russia-Ukraine War, which is making the covid recovery go a lot slower while also throwing in more issues to an already complicated economy.

And that’s it for now!

I hoped you enjoyed this summary of what’s been going on in this exciting world. If you have please share with me your thoughts and comments!

Thank you and see you next time!

Somi Arian

To learn more about these topics check out https://www.fempeak.ai and watch my YouTube series.