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Good Morning. Fed Chair Jerome Powell testified before Congress yesterday on the outlook of the US economy. Powell commented that he believes the Fed’s “policy rate is likely at its peak” and will likely dial back rates later year. A redundant message over these last few months, but markets still responded positively.
The big market mover is bitcoin which slammed up to its previous all time high before dropping down to around $66,000 where it currently sits. Ethereum has been doing its best to keep up with Bitcoin as it attempts to gain closer to its previous all time high as well.
So, what’s pushing these all time highs? Well for one thing, the easier access to get bitcoin through the ETF has massively increased demand. And well, the ETF providers have to then buy the underlying bitcoin! On Tuesday, over $788 million of inflows went into BlackRock, forcing the asset manager to purchase 11,000 bitcoins. We’ll dig more into this tomorrow.
Today, we discuss how working remote will likely drive the demand for better payment rails, AKA the blockchain payment rails. It’s the new age of the digital nomad, check it out. And increasingly, political hopefuls and intergovernmental organizations are putting forward their thoughts on crypto, including RFK Jr. and BRICS. Read on!
Crypto News You Can’t Miss: BRICS Doubles Down on De-Dollarization
The 5 nations comprising BRICS include Brazil, Russia, India, China and South Africa have reaffirmed their intent to create a blockchain-based digital payment system a Kremlin aide confirmed in an interview with TASS.
The group has been focusing on increasing their role in the international monetary system and lessening their reliance on the US dollar, hence the term de-dollarization. Interestingly enough, stablecoins have exploded across the globe in recent years and has expanded the reach of the US dollar to many emerging markets. It seems BRICS has taken notice.
Kremlin aide Yury Ushakov noted that “the main thing is to make sure it is convenient for governments, common people and businesses, as well as cost-effective and free of politics.”
How this payment system will look will certainly be interesting. It could potentially be in the form of a private blockchain or a BRICS-backed stablecoin similar to the popular USD and EURO-backed stablecoins.
Op-Ed: How Blockchain is Reshaping the Digital Nomad Concept
It was 1997 when the phrase ‘digital nomad’ was popularized in a book of this name which highlighted how people who could work remotely anywhere in the world as long as they had access to the internet. In many cases, they are freelancers who are using their programming or graphic design skills to get paid by the highest bidder.
Since the release of the book in 1997, we have seen this concept evolve into a way to see the world while continuing in a career. Rather than backpacking as a tourist, travelers pack their laptop and spend a few months in working in cities like Bangkok, Buenos Aires and Prague. Some countries have begun to issue special visas for digital nomads to attract these remote workers with upwards of 50 countries now offering some form of digital nomad visa. For many who work in programming or graphic design, the chance to give up an expensive apartment in New York City or San Francisco and travel can be quite appealing.
According to Demandstage, there are now upwards of 35 million of these digital nomads with around half of them in their 30’s. And the two largest freelance employment marketplaces (Upwork and Fiverr) collectively place upwards of $5.8 Billion in annual freelance work. Although electronic banking allows most traveling freelancers to handle their banking needs, the growth of the blockchain is set to profoundly impact how digital nomads can earn and manage their money.
Banking for digital nomads can be complicated at best and very challenging for many. Many of these nomads have had their bank account closed with some banks not wanting the risk of these types of customers. In cases where there is a fraudulent credit card charge, getting a card or PIN replaced while in Thailand or Czech is not possible. For many, this has been a major roadblock for those considering this lifestyle. Thanks to crypto and blockchain, this is starting to change. Many new services operate on blockchain technology, meaning that when the gig is accepted, a crypto payment is sent directly to the seller’s wallet. As the digital nomad moves around, their wallet moves around with them. And although some payments are made in tokens like ETH and BTC, those who wish to be paid in a stablecoin like USDC, can increasingly do so. Rather than deal with third parties who might freeze the account as well as charge fees for international transfers, payments can be made on crypto rails simplifying all of this.
Another feature that is being offered to these nomads is the ability for these roles and gigs to be set up in smart contracts. This allows the seller to provide the offering knowing that the payment will be released once the service is accepted. This is not dramatically different to the process which is currently offered by firms like Fiverr and Upwork, but having the subjectivity removed and knowing payment will be released once the contract is completed offers peace of mind to the digital nomads who want to focus on delivering their work to the client in a simplistic way.
Perhaps the most important change that the blockchain promises to bring is lower fees. Currently, firms like Fiverr and Upwork charge in the region of 20% of the contracted amount. On top of this are payment fees which can be around 2.5%. Blockchain applications are set up in a way that is meant to bring maximum value to both the buyer and the seller. From what we have seen, decentralized applications are being built in the space with fees that are significantly lower between 1% and 5% and with zero transaction fees charged. So far, we have yet to see one of these blockchain based firms take real market share aware from the established companies, but if a freelancer can earn a similar wage while paying a fraction of the fees, we expect to see more business move to these blockchain-based firms.
Lastly, as crypto currencies have evolved, we have seen more users gravitate to stablecoins where there is little or no volatility in the value of the tokens. As we see firms like PayPal create their own USD stablecoins, we would expect to see greater acceptance of these stablecoins by both the freelancers and their employers.
As the blockchain continues to grow, we expect to see this digital nomad space to growth with it, creating new opportunities for freelancers to find work, trusting a smart contract, and reducing the fees they pay to a third party for both banking and freelance services.
Media of the Week: RFK Jr. Makes Appearance at ETHDenver
This past week was ETHDenver, an annual Ethereum and Web3 summit. One of the major guests was none other than presidential hopeful RFK Jr. who interviewed Custodia Bank CEO, Caitlin Long.
RFK Jr. attempted to push Bitcoin and use the opportunity to promote his candidacy. Read more on his main points here.