Month: February 2023

Last week when President Vladimir Putin said his country is suspending participation in the New START nuclear arms control treaty with the US, he explained it was to “ensure security, strategic stability” for Russia.

In Sunday remarks given to state TV channel Russia 1, he explained more about what he sees as the West’s goal in its deeper involvement in opposing Russian forces in Ukraine while seeking to punish Moscow with continually ratcheting sanctions and attempted isolation on the world stage. He warned in the new comments that the Russian people may not survive in NATO countries succeed in imposing a “strategic defeat” on Russia. 

He presented the proxy war in Ukraine and Western arms being pumped in, which has recently included authorization for US and German tanks, as an existential threat to his country and people. 

“In today’s conditions, when all the leading NATO countries have declared their main goal as inflicting a strategic defeat on us, so that our people suffer as they say, how can we ignore their nuclear capabilities in these conditions?” Putin said, according to Reuters.

“I do not even know if such an ethnic group as the Russian people will be able to survive in the form in which it exists today,” he said, while also suggesting the West is eyeing Russia’s abundant resources, and seeks to obtain and divide them. 

It’s not the first time he’s cast the Ukraine war in terms of a global conflict and confrontation, but such heightened rhetoric which shows he doesn’t see losing as an option has grown and come more frequent of late. Last week he had said the following, echoing a similar theme: 

“Western elites aren’t trying to conceal their goals, to inflict a ‘strategic defeat’ to Russia,” he said last Tuesday. “They intend to transform the local conflict into a global confrontation.”

Putin spoke those words headed into Friday’s one-year mark since he ordered the invasion of Ukraine while charging it was the West that “started the war”. 

“We aren’t fighting the Ukrainian people,” Putin had asserted in a speech, saying Ukrainians have “become hostage of the Kyiv regime and its Western masters, which have effectively occupied the country.”

Authored by David Atlee via CoinTelegraph.com,

By the time MiCA makes it through the EU, will it be enough to effectively regulate the crypto industry on the continent?

The final vote on the European Union’s much-awaited set of crypto rules, known as the Markets in Crypto Assets (MiCA) regulation, was recently deferred to April 2023. It was not the first delay — previously the European lawmakers rescheduled the procedure from November 2022 to February 2023. 

The setback, however, was caused solely by technical difficulties, and thus, MiCA is still on its way to becoming the first comprehensive pan-European crypto framework. But that will happen only in 2024, whereas during the second half of last year, when the MiCA text had already been mostly written, the industry was shaken with a number of shocks, provoking new headaches for regulators. There’s little doubt that in an industry as dynamic as crypto, the whole of 2023 will bring some new hot topics as well.

Hence, the question is whether MiCA, with its already existing imperfections, could qualify as a truly “comprehensive framework” a year from now. Or, which is more important, will it for an effective set of rules to prevent future failures akin to TerraUSD or FTX?

These questions have certainly appeared in the mind of the president of the European Central Bank, Christine Lagarde. In November 2022, amid the FTX scandal, she claimed “there will have to be a MiCA II, which embraces broader what it aims to regulate and to supervise, and that is very much needed.”

Cointelegraph reached out to a range of industry stakeholders to know their opinions on whether the Markets in Crypto Assets regulation is still enough to enable the proper functioning of the crypto market in Europe.

EU DeFi regulations still a ways off

One main blindspot with regard to the MiCA is decentralized finance (DeFi). The current draft generally lacks any mention of one of the later organizational and technological forms in the crypto space, and it surely could become a problem when MiCA arrives. That certainly drew the attention of Jeffrey Blockinger, general counsel at Quadrata. Speaking to Cointelegraph, Blockinger imagined a scenario for a future crisis: 

“If DeFi protocols disrupt the major centralized exchanges as a result of a broad loss of confidence in their business model, new rules could be proposed to address everything from money laundering to customer protection.”

Bittrex Global CEO Oliver Linch also believes there is a global problem with DeFi regulation and that MiCA won’t make an exception. Linch said that that DeFi is inherently unregulatable and, to some degree, even a low priority for regulators, as the majority of customers engage in crypto mainly through centralized exchanges.

However, Linch told Cointelegraph that just because regulators can supervise and engage with centralized exchanges most easily doesn’t mean there isn’t an important role for DeFi to play in the sector.

The lack of a distinct section dedicated to DeFi doesn’t mean it’s impossible to regulate. Speaking to Cointelegraph, Terrance Yang, managing director at Swan Bitcoin, said that DeFi is to some degree transferable to the language of traditional finance, and therefore, regulatable:

“DeFi is just a bunch of derivatives, bonds, loans and equity financing dressed up as something new and innovative.”

The yield-bearing, lending and borrowing of collateralized crypto products are things that investment and commercial banks are interested in and should be regulated similarly, Yang believes. In that way, the suitability requirements as formulated in MiCA can actually be helpful. For instance, DeFi projects may potentially be defined as providing crypto asset services in MiCA’s vocabulary.

Lending and staking

DeFi may be the most notable, but surely not the only limitation of the upcoming MiCA. The EU framework also fails to address the growing sector of crypto lending and staking.

Given the recent failures of the lending giants, such as Celsius, and the rising attention of American regulators to staking operations, EU lawmakers will need to come up with something as well.

“The market collapse in the last year was spurred by poor practices in this space like weak or non-existing risk management and reliance on worthless collateral,” Ernest Lima, partner at XReg Consulting, told Cointelegraph.

Yang noted the particular problem of disbalance in the regulation of lending and staking in the Eropean Union. Ironically, at the moment, it is the crypto market that enjoys an asymmetrical advantage in terms of loose regulation when compared to the traditional banking system in Europe. Legacy commercial or investment banks and even “traditional” fintech companies are overregulated relative to the arguably heavily under-regulated crypto exchanges, crypto lending and staking platforms:

“Either let the free market work with no regulation at all, except maybe for fraud, or make the rules the same for all who offer economically the same product to Europeans.”

Another issue to watch is the nonfungible tokens (NFTs). In August 2022, European Commission Adviser Peter Kerstens revealed that, despite the absence of the definition in MiCA, it will regulate NFTs as cryptocurrencies in general. In practice, this could mean that NFT issuers will be equated to crypto asset service providers and required to submit regular accounts of their activities to the European Securities and Markets Authority at their local governments.

Cause for optimism 

MiCA was largely met with moderate optimism by the crypto industry. Despite a few rigidities in the text, the approach seemed generally reasonable and promising in terms of market legitimization.

With all the tumult in 2022, will the next iteration of the EU crypto framework, a hypothetical “MiCA-2,” be more restrictive or crypto-skeptical? “The further delays MiCA has faced have only highlighted the idle approach taken by the EU to introduce legislation that is needed more now than ever before, particularly given recent market events,” Linch said, claiming the necessity of tighter and swifter scrutiny over the market.

Lima also anticipates a closer approach with more issues covered. And it is really important for European lawmakers to pace up with the regulatory updates:

“I expect a more robust approach to be taken in some of the technical standards and guidelines that are currently being worked on and will form part of the MiCA regime. We might also see greater scrutiny by regulators in authorization, approval and supervision, but ‘crypto winter’ will have long since thawed by the time the legislation is revised.”

At the end of the day, one shouldn’t get caught up in the stereotypes about the tardiness of the European Union’s bureaucratic machine.

It is still the EU, and not the United States, where there is at least one large legal document, scheduled to become a law, and the main effect of the MiCA was always much more important symbolically, whereas the urgent issues in crypto could actually be covered by less ambitious legislative or executive acts. It is the mood of these acts, however, that remains crucial — the last time we heard from the EU it decided to oblige the banks storing 1,250% risk weight on their exposure to digital assets.

Looking at pledges of military aid to Ukraine between Jan. 24, 2022 and Jan. 15, 2023, the U.S. government has committed to providing more financial assistance for military purposes than any other country – and as this infographic using data from the Ukraine Support Tracker by the Kiel Institute for the World Economy, the gap to other countries is huge.

Over the analyzed period, the United States committed a total of $46.6 billion (excluding the value of provided weapons and equipment). the second-ranked country, the United Kingdom, pledged just $5.1 billion.

You will find more infographics at Statista

In relative terms, however, both military aid commitments amount to approximately 0.2 percent of each country’s GDP.

Looking at this metric, Ukraine’s smaller neighbors have, relatively, contributed more to the war effort:

For example Estonia (military aid at 1.1 percent of GDP) or Latvia (0.9 percent).

Even when military, financial and humanitarian aid delivered or pledged by the U.S. is added up, this only amounts to 0.4 percent the country’s GDP.

The Kiel Institute for the World Economy’s Ukraine Support Tracker systematically records the value of aid pledged to Ukraine by the governments of 40 countries since early 2022. This includes military, financial and humanitarian commitments.

Authored by EurAsiaNet via OilPrice.com,

• Kazakhstan’s state-owned natural gas company, QazaqGaz, has vowed to prevent future gas shortages by refraining from exporting gas and importing gas when necessary.

• Despite sitting atop 3.8 trillion cubic meters of gas, Kazakhstan’s energy officials urge citizens to conserve gas and be more economic in their use of it to avoid peak demands that could cause shortages.

• Plans are being drawn up to build a transnational pipeline from Russia to China to extend gas supplies to the east of Kazakhstan, and a processing plant with the capacity to produce up to 1 billion cubic meters of gas will be built at Kashagan by 2024.

Kazakhstan’s state-owned natural gas company has vowed that there will be no repeat shortages of the fuel next fall and winter like the ones that the country began to experience in late 2022.

But Arman Kasenov, the deputy chairman of QazaqGaz, has said that consumers must in future also do their share in helping avoid crunches at times of peak demand by being more economic in their use of gas. Anybody failing to do so could face stiff bills, he hinted.

In the short-term, Kazakhstan plans to prevent shock deficits by refraining from exporting gas. 

“Taking the growth in gas consumption within Kazakhstan into account, QazaqGaz cannot count on exports in the next fall-winter period,” Kasenov said on February 24.

Indeed, far from thinking about exports – and China is the only game in town in this area – Kazakhstan is now resorting to buying imported gas. 

Earlier this week, Energy Minister Bolat Akchulakov said at a government meeting that plans are being drawn up to import gas from Russia to provide for areas in the east of Kazakhstan. Akchulakov said no prices have yet been discussed.

The infrastructure for those specific imports does not yet exist, however. Extending gas supplies to those regions of Kazakhstan will be contingent on completion of a transnational pipeline running from Russia to China. 

“We have earlier proposed to Gazprom the idea of a transit route through the territory of the East Kazakhstan Region,” Kasenov said at a meeting held under the auspices of the Samruk-Kazyna state holding company.

“It is under development. We have already carried out technical and economic feasibility studies.”

In October, Kazakh President Kassym-Jomart Tokayev said QazaqGaz had reached a sales agreement with Turkmenistan’s Turkmengaz and that he hoped up to 1.5 billion cubic meters of gas could be imported annually under a long-term deal.

According to QazaqGaz data, gas consumption in Kazakhstan in 2022 reached 21 billion cubic meters, while 5 billion cubic meters were earmarked for export. The expectation is that consumption will soar to 40 billion cubic meters by 2030.

The irony of Kazakhstan’s reliance on imports is that it has more than enough gas of its own.

As the country’s energy officials enjoy boasting, Kazakhstan sits atop 3.8 trillion cubic meters of gas, enough to last them 100 years. A good 70 percent of that total is concentrated in four huge fields: Karachaganak, Tengiz, Kashagan and Zhanazhol.

What remains, however, is to get that gas out of the ground. 

On that point, the Energy Ministry has said that a processing plant with the capacity to produce up to 1 billion cubic meters of gas will be built at Kashagan by 2024. 

In spite of all this potential, officials are nevertheless insistent that consumers need to be trained into more parsimonious usage.

“In northern regions, where the fall-winter period lasts almost nine months, households consume about 500-1,000 cubic meters. But in southern and western regions, consumption is three times higher. This suggests that there is some kind of business being run out of the household: a hotel or a store,” Kasenov said.

“We want to introduce a social minimum threshold. If it is a household, or if it is an individual housing unit, if the baseline bits of equipment are a cooker, a gas stove and a boiler, we can calculate the standard consumption. Everything above that is excess consumption.” 

CIA Director William Burns has weighed in directly on Biden administration assertions that China is mulling providing Russia with lethal aid to further its military action in Ukraine. 

Burns told CBS’ “Face the Nation” on Sunday that the US is “confident” that Beijing is considering it at this point. “We’re confident that the Chinese leadership is considering the provision of lethal equipment,” he said.

“We also don’t see that a final decision has been made yet, and we don’t see evidence of actual shipments of lethal equipment.”

Burns went on to say in reference to recent warnings from Secretary of State Antony Blinken, “That’s why, I think, Secretary Blinken and the President have thought it important to make very clear what the consequences of that would be as well … because it would be a very risky and unwise bet.”

This means that clearly at the very least the US has no evidence that such aid has actually been delivered, despite some ambiguous media accusations reaching back to last summer. CBS also noted…

Earlier this month, Burns told students at Georgetown University that Xi had been “very reluctant to provide the kind of lethal weapons to Russia to use in Ukraine that the Russians are very much interested in.”

Additionally, the whole accusations theater seems more by design to act as a preemptive warning against what Beijing might contemplate in the future. Ultimately it seems a big nothingburger. 

But it’s China’s silence amid G20 meetings that speaks loudest at this point: 

Finance ministers of the world’s largest economies have failed to agree on a closing statement following a summit in India, after China refused to condemn Russia’s invasion of Ukraine.

Beijing declined to accept parts of a G20 statement that deplored Russia’s aggression “in the strongest terms”.

Moscow said “anti-Russian” Western countries had “destabilized” the G20. It comes after China this week published a plan to end the conflict that was viewed by some as pro-Russian.

So China does no longer sign up to the statement as it was given by the G20 in Bali? That’s bad news. https://t.co/sAfd7hIpC9

— Ulrike Franke (@RikeFranke) February 26, 2023

A G20 statement condemning the war included a footnote which said it was “agreed to by all member countries except Russia and China”.

Authored Joe Lauria via ConsortiumNews.com,

Western leaders privately told Ukrainian President Volodymyr Zelensky that Ukraine can not win the war against Russia and that it should begin peace talks with Moscow this year in exchange for closer ties with NATO. 

Élysée Palace where Macron and Scholz told Zelensky to seek peace. (U.S. State Dept.)

The private communications are at odds with public statements from Western leaders who routinely say they will continue to support Ukraine for as long as it takes until it achieves victory on the battlefield. 

The Wall Street Journal, which reported on the private remarks to Zelenksy, said:

“The public rhetoric masks deepening private doubts among politicians in the U.K., France and Germany that Ukraine will be able to expel the Russians from eastern Ukraine and Crimea, which Russia has controlled since 2014, and a belief that the West can only help sustain the war effort for so long, especially if the conflict settles into a stalemate, officials from the three countries say.

‘We keep repeating that Russia mustn’t win, but what does that mean? If the war goes on for long enough with this intensity, Ukraine’s losses will become unbearable,’ a senior French official said.

‘And no one believes they will be able to retrieve Crimea.’

French President Emmanuel Macron and German Chancellor Olaf Scholz told Zelensky at an Élysée Palace dinner earlier this month that he must consider peace talks with Moscow, the Journal reported.

According to its source, the newspaper quoted Macron as telling Zelensky that “even mortal enemies like France and Germany had to make peace after World War II.”

Macron told Zelensky “he had been a great war leader, but that he would eventually have to shift into political statesmanship and make difficult decisions,” the newspaper reported.   

A Return to Realism

Macron at the Munich Security Conference last week. (Kuhlmann/MSC)

At the Munich Security Conference last week, Gen. Petr Pavel, the Czech Republic’s president-elect and a former NATO commander, said:

“We may end up in a situation where liberating some parts of Ukrainian territory may deliver more loss of lives than will be bearable by society. … There might be a point when Ukrainians can start thinking about another outcome.”

Even when he was a NATO commander Pavel was a realist in regard to Russia. During controversial NATO war games with 31,000 troops on Russia’s borders in 2016 — the first time in 75 years that German troops had retraced the steps of the Nazi invasion of the Soviet Union — Pavel dismissed hype about a Russian threat to NATO. 

Pavel, who was chairman of NATO’s military committee at the time, told a Brussels press conference that, “It is not the aim of NATO to create a military barrier against broad-scale Russian aggression, because such aggression is not on the agenda and no intelligence assessment suggests such a thing.”  

The German foreign minister at the time, Frank-Walter Steinmeier, also embraced realism towards Russia, saying: “What we shouldn’t do now is inflame the situation further through saber-rattling and warmongering. Whoever believes that a symbolic tank parade on the alliance’s eastern border will bring security is mistaken.”

Instead of an aggressive NATO stance towards Russia that could backfire, Steinmeier called for dialogue with Moscow. “We are well-advised to not create pretexts to renew an old confrontation,” he said, saying it would be “fatal to search only for military solutions and a policy of deterrence.”  Under U.S. leadership NATO clearly did not follow that advice, as it continued to deploy more troops to Eastern Europe and to arm and train Ukraine (under cover of pretending to back the Minsk Accords).

Before its intervention in Ukraine, Russia cited NATO’s eastward expansion, the deployment of missiles in Romania and Poland, war games near its borders and the arming of Ukraine as red lines that the West had crossed. 

After a year of war, Western leaders appear now to be turning to a realist approach. Macron, for instance, at the Munich Security Conference dismissed any talk of regime change in Moscow. 

 No US Reaction

Left to Right: Ukrainian Foreign Minister Dmytro Kuleba, U.S. Secretary of State Antony Blinken and German Foreign Minister Annalena Baerbock at Munich Security Conference. (Schulmann/MSC)

Washington has not commented on the Journal‘s story about the peace talks-for-arms proposal.

U.S. Secretary of State Antony Blinken last month discussed with The Washington Post arming Ukraine post-war but he did not say that Ukraine should seek peace talks.

“We have to be thinking — and we are — about what the postwar future looks like to ensure that we have security and stability for Ukrainians and security and stability in Europe,” Blinken told the conference in Munich.

The proposal to bring Ukraine even closer to NATO than it already is, with greater access to weapons after the war, should be on the agenda at NATO’s annual meeting in July, said Rishi Sunak, the British prime minister, at the Munich conference.

“The NATO summit must produce a clear offer to Ukraine, also to give Zelensky a political win that he can present at home as an incentive for negotiations,” a British official told the Journal. 

The deal with NATO would not include membership with its Article 5 protection, the newspaper reported. “We would like to have security guarantees on the path to NATO,” Zelensky told a press conference on Friday.

 In the meantime, Macron, according to the WSJ report, said that Ukraine should press forward with a military offensive to regain territory in order to push Moscow to the peace table. 

There has been no reaction from Moscow about the proposal. Political analyst Alexander Mercouris, in his video report on Saturday, said Russia would likely be incentivized to continue fighting rather than enter peace talks with the knowledge that Ukraine would be heavily armed by NATO after the war.   

“The Russians are never going to agree with something like this,” Mercouris said.

“They must be saying to themselves that instead of agreeing to this plan, it actually makes more sense … to continue this war because one of [Russia’s] objectives is the total demilitarization of Ukraine.”

What the Western powers are proposing is the opposite, he said. Given that Russia considers it is winning and “there seems to be a general acknowledgment amongst Western governments that Ukraine can’t win this war, …where is the incentive for … Russia to even consider this plan?”

For Moscow, Mercouris said, Ukraine’s demilitarization is an “absolute, existential matter.”  

If Ukraine is going to get even more advanced weapons from NATO after the war as opposed to what it would get “whilst the war is still underway, then it makes even less sense” for Russia “to stop the war and agree to this plan.” 

Russia is facing a “weakening adversary now,” Mercouris said, and Moscow clearly prefers that to facing a “strengthened adversary later.”  

India has become the biggest country in the world this year, but conversely, its fertility rates have been in a steep decline for years.

In reality, the reversal of population growth that manifested itself in China this year has already begun in India as well.

As Statista’s Katharaina Buchholz explains, the number of children born per woman in India had dropped to 2.0 by 2019. To maintain a stable population, 2.1 births per woman are necessary.

Birth rates have been declining across all religious groups, making rates more similar in the process, reporting by Pew Research Center shows. 

You will find more infographics at Statista

Muslim women have traditionally given birth to more children than other women in India, but the gap between Hindu and Muslim birth rates in the country as been narrowing from one third to one quarter higher birth rates among the latter population.

While life expectancy in India is still growing rather quickly, the population can continue to increase, but if this factor slows down in the future, population decline will start.

India is expected to remain the biggest country in the world throughout this century, but could pass the title on to Nigeria beyond that.