Bitcoin and cryptocurrencies have taken off this year with bitcoin now being held by Elon Musk\’s Tesla and adopted as a national currency by El Salvador.
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The bitcoin price, after a sharp sell-off earlier this week, has recovered some of its losses—surging back toward $60,000 per bitcoin and helping the wider crypto market rally. The bitcoin price is up 200% since this time last year, propelling the combined crypto market capitalization to almost $3 trillion.
Now, Hillary Clinton, the former U.S. presidential hopeful and secretary of state under president Barack Obama, has warned the rise of bitcoin and cryptocurrencies could undermine the U.S. dollar\’s reserve currency status.
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\What looks like a very interesting and somewhat exotic effort to literally mine new coins in order to trade with them has the potential for undermining currencies, for undermining the role of the dollar as the reserve currency, for destabilizing nations, perhaps starting with small ones but going much larger,\ Clinton said, speaking during a panel discussion at the Bloomberg New Economy Forum in Singapore, and adding she hopes \nation-states start paying greater attention to is the rise of cryptocurrency.\
Clinton, whose 2016 presidental campaign was marred by hacks, also criticized Russia\’s president Vladimir Putin, accusing him of deploying \a very large stable of hackers and those who deal in disinformation and cyberwarfare.\
Recent data from Chainalysis has revealed North America is the world\’s biggest victim of crypto-based ransomware attacks, with those hit by hackers paying out $131 million in cryptocurrency to criminals over a 12 month period. Most of the attacks were found to be from Russia-based gangs.
Following Clinton\’s comments, El Salvador president Nayib Bukele announced the country is planning to build a \Bitcoin City,\ funded initially by bitcoin-backed bonds.
In September, El Salvador became the first country in the world to officially adopt bitcoin as legal tender and now uses it alongside the U.S. dollar as its national currency. Other countries in the region are considering following in El Salvador\’s footsteps. Earlier this month, it was reported Zimbabwe is exploring the adoption of cryptocurrencies as a means of payment.
\This is going to make El Salvador the financial center of the world,\ said Samson Mow, the chief strategy officer of blockchain technology provider Blockstream, speaking alongside Bukele at an event closing a week-long promotion of bitcoin in El Salvador.
The news of El Salvador\’s plans for a bitcoin city, designed to fuel investment into the country, helped the bitcoin price climb following a turbulent week.
The bitcoin price fell 20% through the middle of November, dropping to lows of around $55,000 per bitcoin after hitting a record high of almost $69,000 in the run-up to a closely-watched bitcoin upgrade being deployed.
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Countries around the world are already grappling with how to rein in the red-hot bitcoin and crypto market.
In the U.S., president Joe Biden this week signed into law a huge infrastructure bill that includes tough new tax reporting requirements for bitcoin and crypto companies. From 2023, brokers will need to hand over customer names, addresses, phone numbers, capital gains, and losses to the Internal Revenue Service while companies receiving crypto payments worth more than $10,000 will have to report the sender’s identity to the government.
Earlier this week, India’s prime minister Narendra Modi called for countries to work together to stop cryptocurrencies \ending up in the wrong hands.\
India plans to ban the use of bitcoin and cryptocurrencies for payments but will allow digital assets to be held and traded in a similar way to stocks and bonds, according to local media reports.
A comprehensive ban on bitcoin and cryptocurrencies in China was partly blamed for a devastating bitcoin price and wider crypto market crash earlier this year.