Bitcoin Must Be Accepted by World Bank, According to Charter | MicroStrategy Acquires Additional Bitcoins and Now Holds Over 105,000 BTC in Total
Top stories and news you should know in the bitcoin, crypto, and decentralized markets
Quote of the Week
“Sold almost all of my bitcoin. Don’t need it… I’m saying that this is not going up because of structural reasons.”
— Jim Cramer (CNBC contributor, Mad Money host, on June 21st with BTC trading at ~$32K its local bottom)
SHOT: The World Bank refuses to help El Salvador with their acceptance and implementation of their Bitcoin Bill making BTC legal tender alongside the world’s reserve currency USD, but it turns out that it must accept legal tender from member countries as part of their own charter.
CHASER: Meaning the World Bank MUST accept BTC as well as pay El Salvador the offset of the gains and/or take delivery of their legal tender (bitcoin) for any losses forcing them to implement the capabilities to both accept and pay nations in bitcoin.
The World Bank’s Bitcoin Backfire
WELL, Well, well…
The World Bank in short time after mockingly refusing to help El Salvador with its Bitcoin acceptance and implementation found that there was catch in their own charter from 1944 requiring them to accept the legal tenders of member countries, meaning it must accept bitcoin according to their own sanctions.
After trying to pour cold water on El Salvador’s adoption of bitcoin as legal tender due to “environmental and transparency” concerns, the World Bank discovered in its founding document some articles that may soon force them to accept bitcoin payments from countries that have embraced bitcoin and crypto assets. The central theme of 1944 Articles of Agreement for the World Bank is commitment to accept payments from member states in local currencies to engage with sovereign governments “to end extreme poverty and promote shared prosperity.” The charter allows payments in “the member’s currency,” but it also allows central banks to pay with “notes or similar obligations” backed by their reserves.
Section 12 of Article V defines acceptable “forms of holdings of currency” as follows:
The Bank shall accept from any member, in place of any part of the member’s currency, paid in to the Bank under Article II, Section 7 (i), or to meet amortization payments on loans made with such currency, and not needed by the Bank in its operations, notes or similar obligations issued by the Government of the member or the depository designated by such member, which shall be non-negotiable, non-interest bearing and payable at their par value on demand by credit to the account of the Bank in the designated depository.
If that was not already great news, it gets better. In the case of El Salvador’s development bank, Banco de Desarrollo, their $150M bitcoin fund can act as reserves to back their IOUs. Additionally the World Bank’s charter says if the local currency has appreciated in value, then the World Bank must pay those gains back.
Section 9 of Article II states that holdings paid into the bank by members should be continually revalued (presumably against a “real” benchmark like USD), so if the local currency has appreciated, it says, the World Bank should do the decent thing and hands the gains back:
Whenever the par value of a member’s currency is increased, the Bank shall return to such member within a reasonable time an amount of that member’s currency equal to the increase in the value of the amount of such currency.
This creates an interesting scenario for the World Bank because they may be asked to pay El Salvador in bitcoin. On the contrary, should the local currency depreciate in value and the member gets margin called it has to “pay to the Bank within a reasonable amount of time an additional amount of its own currency sufficient to maintain the value.” Making matters even more bizarre, if El Salvador’s bitcoin falls in value, the World Bank actually will have to accept bitcoin as payment and begin stacking their own position in the asset.
It is not written in stone, so these articles may change. The World Bank very well could also choose not to respect the sovereign right of El Salvador to choose its own currency. The former would not be surprising, but the latter could be telling of the scheme that the World Bank pulls with central banks to financially engineer exploitative deals with member countries.
After rejecting any association with their use of bitcoin as legal tender, bitcoin-ers dug deep to show the World Bank that its hands were tied by their own charter that forces them to implement the capability to both accept as well as pay member countries in bitcoin.
TL;DR — The World Bank disparaged bitcoin and El Salvador without knowing that their own founding document requires them to not only help them with their new legal tender (BTC), but also requires themselves to implement it into their own payment systems.
News You Should Know
MicroStrategy Acquires Additional Bitcoins and Now Holds Over 105,000 Bitcoins in Total
MicroStrategy® Incorporated (Nasdaq: MSTR), the largest independent publicly-traded business intelligence company, announced that it had purchased an additional approximately 13,005 bitcoins for approximately $489 million in cash at an average price of approximately $37,617 per bitcoin, inclusive of fees and expenses. MicroStrategy holds an aggregate of approximately 105,085 bitcoins, which were acquired at an aggregate purchase price of approximately $2.741 billion and an average purchase price of approximately $26,080 per bitcoin, inclusive of fees and expenses. MacroStrategy LLC, a subsidiary of MicroStrategy, holds approximately 92,079 of the bitcoins.
Citigroup Launches a Digital Asset Unit within Its Wealth Management Division
The latest bank to join the cadre of those considering offering crypto products for their wealthy clients as well as futures, trading, and custody services for them too. It is a no brainer for these banks to do so because they risk continuing to drag their feet while missing out on potential revenue streams.
Cramer Says He ‘Sold Almost All’ of His Bitcoin, Fearing China Has Had It with Crypto
The reason why this was a naïve decision for Cramer is that China’s crackdown on the mining and trading of bitcoin shows its powers as a tool for capitalism and democracy at a time when their government is clamping down hard in Hong Kong. Buying bitcoin rather than selling would have been the more patriotic as well as profitable move. Right now we are witnessing one of the greatest transfers of resources and wealth of the century from East to West, and it’s one massive opportunity… See the additional reading section at the bottom for an article on this topic!
Pictures Say 1,000 Words, Memes Say 10,000
Stephen Spratt @StephenSprattYou can barely move in financial markets this week without running into a speaker from the Federal Reserve. Sixteen FOMC speaking engagements lined up this week. SIX. TEEN.
FXHedge @FxhedgersFED'S BOSTIC: I BELIEVE THAT THE HOUSING MARKET IS NOT IN A BUBBLE, AND THAT PRICES ARE GROWING AS A RESULT OF SUPPLY AND DEMAND.
The Recount @therecount“Pay them more.” — President Biden whispers in response to questions about worker shortages. https://t.co/8OtMvzizFT
Positive Vibes Only
*Walter Bloomberg @DeItaoneFED'S POWELL: NO 5% INFLATION IS NOT ACCEPTABLE
Jack Posobiec @JackPosobiecThe last video of John McAfee ‘Why Does Power Corrupt’ https://t.co/2DzgIZwXSE
John McAfee @officialmcafeeIn a democracy, power is given not taken. But it is still power. Love, compassion, caring have no use for it. But it is fuel for greed, hostility, jealousy... All power corrupts. Take care which powers you allow a democracy to wield.
Thought Provoking Tweets
Ron Paul @RonPaulHow can a government, that's $28 trillion in debt, spend trillions of dollars that it does not have? Well, one major way is the Federal Reserve creates money-out-of-thin-air and then 'loans' it to the government by buying the government's bonds.
Bloomberg @businessPeter Thiel: “I do wonder whether at this point, Bitcoin should also be thought [of] in part as a Chinese financial weapon against the U.S.” https://t.co/tGx2a5zyAI
FXHedge @FxhedgersDAVE PORTNOY'S SAFEMOON COIN HITS 0.000000 EARLIER TODAY #zilch
Charlie Bilello @charliebilelloCommodity prices over last year... Lumber: +104% Natural Gas: +98% WTI Crude: +81% Heating Oil: +78% Brent Crude +76% Gasoline: +75% Corn: +65% Copper: +63% Coffee: +57% Soybeans: +49% Cotton: +46% Silver: +45% Sugar: +43% Wheat: +35% Palladium: +35% Platinum: +28% Gold: +0.1%
Tweets Moving the Markets
Documenting Bitcoin 📄 @DocumentingBTCChina logistics firm in Guangzhou is airlifting 3,000kg (6,600lbs) of #bitcoin miners to Maryland, USA. 🇺🇸 A crackdown on #Bitcoin mining is a geostrategic blunder for China, and a chance for the U.S to secure jobs, its energy grid, and place in the digital economy. https://t.co/ipG1nYhUXp
CNBC @CNBCCrypto strategist says bitcoin pullback is shaking out investors who have 'paper hands' https://t.co/SKhiYrDNfc
Breaking Market News @FinancialJuiceUS TREASURY SECRETARY YELLEN: WE CAN'T ALLOW ANY CHANCE OF THE GOVERNMENT DEFAULTING ON ITS DEBT.
Carl Quintanilla @carlquintanilla“By now, it is clear that cryptocurrencies are speculative assets rather than money … #Bitcoin in particular has few redeeming public interest attributes ..” - @BIS_org (h/t @knowledge_vital) https://t.co/EYhkrZBl3C
Squawk Box @SquawkCNBC"China is going all in on #crypto in a big way," says @Katie_Haun. "They are all in on their brand of crypto which is a closed permission system kind of at odds with the open, decentralized protocols we see as the future of the crypto system." https://t.co/ABwHcbT2sN
Other Investment News
Blockchain Capital Raises $300 Million for Fund V — PR Newswire
GBTC Redemptions Stealing Bitcoin Spot Demand — Bitcoin Magazine
The Merit and Nature of Bitcoin’s Energy Consumption by Nic Carter & Castle Island Ventures
Go West, Bitcoin! Unpacking the Great Hashrate Migration by Nic Carter