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Japan Pushes Cashless Agenda by Rewarding Non-Cash Payments After Tax Hike

Japan Pushes Cashless Agenda by Rewarding Non-Cash Payments After Tax Hike

Japan’s recent October sales tax increase took the rate from 8% to 10%, the previous such hike occurring in April of 2014, when the rate was raised from 5%. The increase is accompanied this time around by new government policy which rewards cashless payments by allowing merchants to provide effective “cash back” of up to 5% on purchases.

Also Read: Popular Smartphone Apps Are Adding Crypto Capabilities

More Japanese Are Going Cashless

Japan loves cash. With paper and coin payments still accounting for close to half of all private final consumption expenditures as of 2017, and a rich history of stuffing yen into mattresses and home safes — especially in light of the country’s relatively recent foray into the world of negative interest rates — the land of the rising sun is undoubtedly cash-enamored.

That said, e-money, mobile payment systems, and recently crypto exchange apps continue to pop up at an increasing rate in the paradoxically tech-savvy and old-fashioned culture. In similar spirit, the government is now offering effective tax discounts to those consumers who turn their back on traditional paper and coin in favor of cashless systems, of up to 5%. The approach so far seems to be taking effect for Japanese policymakers, whose official aim is to double a previous cashless payment ratio of 18% to 40% by 2027. A recent survey by Japanese news outlet Mainichi Shimbun found that:

Some 20% of respondents to a recent Mainichi Shimbun survey said they have either started using cashless payments or are considering using such payment methods, after the government introduced a point reward system to counter the negative economic effects of the recent sales tax hike from 8% to 10%.

While Mainichi Shimbun points to countering negative economic effects as rationale for the push, the basic agenda has been on the table for awhile, with purported justifications ranging from increased tourism (in part due to easier use of foreign credit and debit cards), to the Ministry of Economy, Trade, and Industry (METI) pushing for Japan’s embrace of new financial technologies and the “fourth industrial revolution.” METI released its report “Cashless Vision” in 2017 citing improved transparency and accurate tax collection, labor shortages and population decline.

As Nikkei Asian Review detailed prior to the recent tax hike, “METI has adopted, among its countermeasures [against a new recession], a nine-month long campaign to give consumers refunds, in the form of points, if they shop at one of half a million selected stores using one of the 40 approved electronic money payment systems.”

Japan Pushes Cashless Agenda by Rewarding Non-Cash Payments After Tax Hike
A sign at a Japanese convenience store in Niigata prefecture notifies customers they can receive point rewards of 2% on cashless purchases.

Consequences of the Push

While the tech-savvy consumer and cryptocurrency enthusiast may be understandably optimistic about the move, some are asking pointed questions regarding potential consequences for business owners and spenders alike. Small, cash-only businesses that may wish to avoid adoption and processing fees for various cashless methods could find themselves in a pinch in coming years. Especially if METI achieves its ultimate objective of raising cashless settlement to “the world’s highest level” in the future.

Further, merchants in Japan are receiving promotional material packages to promote the push, raising concern with some taxpayers. A small business owner in Nagano Prefecture told news.Bitcoin.com that there are “loads of plastified, non-recyclable stickers, signs and stuff plus loads of leaflets and booklets, too. Probably cost the taxpayer more money than … they might save by using a card rather than cash.”

Finally, the payment systems can have very serious security issues as evidenced by 7-Eleven’s 7pay suffering a ¥38 million (~$350,000) hack in July, resulting in unauthorized payments, leaked customer data, and ultimately the demise of the program.

Potential for Crypto Adoption

As Japanese authorities seek to mimic the likes of Sweden and other dominantly cashless economies, crypto is coming along for the ride. Both e-commerce giant Rakuten and popular messaging service Line now have apps for trading and acquiring cryptocurrencies which are effectively linked to their cashless and mobile payment services R Pay and Line Pay. This, coupled with notable crypto adoption via merchants and the proliferation of active local communities and trading groups in Japan, has some viewing the cashless push as bullish for bitcoin regardless of policy or motive.

What are your thoughts on Japan’s push to go cashless? Let us know in the comments section below.


Image credits: Shutterstock, Ned Snowman, fair use.


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5 Lessons PlayStation Now Needs to Learn from Xbox Game Pass

Xbox Game Pass is a great service, as evidenced by its user base. PSNow has struggled to compete. There are at least five lessons PSNow could take away from Game Pass. Xbox Game Pass is a pretty stellar service. It doesn’t require a strong internet connection, it’s fairly priced and gives you access to loads […]

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Germany Barely Avoids Recession, Economy Remains Stagnated

Germany Barely Avoids Recession, Economy Remains Stagnated

The German economy, the largest and most influential in Europe, narrowly missed falling into recession last quarter. But with quarterly GDP growth averaging a little over 0% since the third quarter of last year, the Old Continent’s economic powerhouse is facing stagnation.

Also read: Germany’s Financial Crisis Invokes 5-Year Rent Freeze

Dodging Recession by a Hair

With a seasonally adjusted 0.1% gross domestic product (GDP) growth in Q3 over the previous quarter, the German economy has surprised analysts who expected it to shrink by 0.1%. The good news comes on top of a revised estimate for Q2, from 0.2 to 0.1% contraction.

In Europe, the generally accepted definition of a recession refers to two consecutive quarters of negative growth, measured on a quarter-on-quarter basis. About the same time last year, Germany barely escaped recession when its GDP fell by 0.2% in the third quarter but then stopped at exactly 0% in the fourth.

According to the country’s official statistics, increased spending by German consumers and the government has helped the economy stay afloat this time. Between July and September, both household and government expenditure rose, the Federal Statistical Office Destatis announced.

Germany Barely Avoids Recession, Economy Remains Stagnated

The agency also noted that exports have increased, despite continuing trade tensions, while imports pretty much remained at the levels from the previous quarter. At the same time, construction registered positive indicators. All this was just enough to compensate for the lower German industry figures.

Any positive developments in Germany inevitably affect the rest of Europe. The Eurozone, the area of the monetary union of 19 EU member states, grew by 0.2% in Q3, according to Eurostat. This growth equals the one in the second quarter of 2019 but is still weaker than the growth recorded during the first three months of the year, 0.4%.

Germany Barely Avoids Recession, Economy Remains Stagnated

China is a different story, however, one that overshadows the modest German recovery. The ongoing trade war with the U.S. is taking a toll on the People’s Republic and the Chinese economy continues to slow down. China’s fixed-asset investment growth was only 5.2% year-on-year in the first 10 months of 2019, the National Bureau of Statistics announced Thursday quoted by Xinhua. The indicator, which reflects capital spent on infrastructure, property, and machinery, is at a record low level.

Meanwhile, investment in the private sector increased 4.4% in October, or 0.3 percentage points less than during the first nine months, which suggests that Chinese companies are more reluctant to make new investments. Industrial production rose 4.7% year-on-year last month, compared to 5.8% in September. Yearly growth in retail sales was 7.2% in October, a 16-year low.

Stagnation Still an Issue

Germany’s narrow escape from recession is not a reason for too much optimism. With an annual growth of only 0.5% in Q3, the German economy is effectively stagnating. Since the third quarter of last year, GDP growth has been averaging around 0.1% quarter-on-quarter. And after maintaining the lowest unemployment rate in the past four decades for the better part of this year, at 3.1 – 3.2%, unemployment in October has been estimated to reach 5%.

Germany Barely Avoids Recession, Economy Remains Stagnated

According to Carsten Brzeski, chief economist at ING Germany, the country’s economy “can still be divided into two worlds: the depressive world and the happy-go-lucky one. In the depressive world, there are very few signs of an imminent bottoming or recovery of the manufacturing sector since the summer of 2018. The sector is facing and will continue to face cyclical challenges, as ongoing trade conflicts, Brexit uncertainty and slower Chinese growth, along with structural challenges, disrupt the automotive industry,” he predicted in an article published by the Dutch banking giant.

“In the happy-go-lucky world, private consumption remains solid on the back of low inflation, low interest rates and a still-strong labour market. The construction sector keeps on booming and the government is also inserting some fiscal stimulus,” Brzeski added, quoted by the Guardian. “The main question, however, is how long the happy-go-lucky world can resist the negative impact from the depressive world. The latest developments suggest that the protective shield has started to crumble,” the expert warned.

Do you think Germany will enter into recession in 2020? Share your expectations about the future of Europe’s largest economy in the comments section below.


Images courtesy of Shutterstock.


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Xbox Is Setting Itself Up as King of Game Subscriptions

XO19 is Xbox’s biggest show of 2019. At the live event in London, Xbox has announced a big change to Game Pass. Along with Project xCloud, Microsoft seems to be future-proofing the Xbox brand. XO19 is upon us, and it seems like Xbox is setting their gaming platform up to be 100% future proof. Their […]

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POV Crypto – No Reservations with Zak Cole

The great Zak Cole returns to POV Crypto for his second interview. Per usual, Zak holds nothing back and provides us with unfiltered insights into both the Bitcoin and Ethereum world. We discuss the following.‚

  • Launching WhiteBlock Genesis‚
  • Changes to the Eth 2 shards and what that means‚
  • Why Zak works on Eth 2‚
  • Why Zak still believes in BTC and PoW
  • What we need to do to actually bring crypto to the world.‚

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Iranian Grid Explains Electrical Costs Will Fluctuate for Bitcoin Miners

Throughout the course of 2019, Iran’s government and the country’s energy officials have been creating new guidelines for bitcoin miners setting up data facilities in the oil-rich nation. On Wednesday, Mostafa Rajabi, a spokesperson for Iran’s Energy Ministry, described a new price model for mining operations and prices per kilowatt-hour (kWh) will fluctuate during certain months.

Also Read: Iranians Defy Warning and Share Pictures of Bitcoin Mining in Mosque

Iran’s Energy Ministry Plans to Pay Anyone Who Exposes Illegal Bitcoin Mining Operations

There’s been a lot of reports over the last year detailing how mining operations have migrated to Iran for cheap electricity. After the initial migration, the Iranian government and the country’s power supplier noticed a lot of energy was being used by crypto mining facilities. Following a government announcement about illegal miners, pictures were shared online that showed bitcoin miners housed inside a mosque.

Spokesperson for Tavanir (Iranian power grid) Mostafa Rajabi.

On November 13, Iran’s Energy Ministry spokesperson Mostafa Rajabi explained the country’s new guidelines for mining operations during an interview with IRIB News. Rajabi told the press that anyone who identifies illegal bitcoin operations to the government will be rewarded. Rajabi emphasized that people who expose these facilities will be paid 20% of the recovery damage stolen from the electrical grid.

Fluctuating Electrical Prices

Iran’s Energy Ministry will also prohibit mining digital assets after the peak hours of consumption surpass a threshold of 300 hours annually. During the interview, Rajabi also noted how much bitcoin miners would be charged using the average price for the export of electricity in Iran. During some points of the year, miners could be charged $0.08 per kWh (9,650 rials) and during the cold months of the year, miners would only be charged $0.04 per kWh. However, during the summer months when electricity is used the most in Iran, electrical prices could quadruple to $0.16 per kWh, Rajabi noted. Rajabi disclosed that the new mining rules were initiated when Iran’s summer electrical demand jumped by 7%.

A Bitcoin mining facility in the desert outside of Tehran.

Last June, Iranian law enforcement officials reportedly confiscated 1,000 bitcoin miners from two facilities. This was followed by a bill that was ratified two months later stating that cryptocurrency mining in Iran would be considered a legitimate business. During Rajabi’s interview, he told IRIB News that Iran will help operations that create their own power plants with government incentives. Mining operations that utilize renewable energy sources would be also rewarded, Rajabi stressed.

What do you think about the situation in Iran in regard to bitcoin miners? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Wiki Commons, Fair Use, and Pixabay.


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Chain Reaction Podcast – ETHEREUM’S DANNY RYAN: THE DEFINITIVE ETH 2.0 UPDATE

Host Tom Shaughnessy of Delphi Digital is joined by Ethereum’s Danny Ryan, as he answers the community’s most pressing questions on ETH 2.0, the technology, recent changes to the roadmap, and so much more. It was a pleasure to have Danny on for a look inside the Ethereum machine. Ethereum is at a pivotal juncture with ETH 2.0 on the horizon and new scaling technologies gaining momentum (optimistic rollups) et al.

To help support the show, please hit the subscribe button on iTunes so we can keep bringing you episodes like these!

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To access the insights package of Delphi’s leading crypto research, visit DelphiDigital.io on your device and sign up using coupon code CHAINREACTION

Disclosures:‚This podcast is strictly informational and educational and is not investment advice or a solicitation to buy or sell any tokens or securities or to make any financial decisions. Do not trade or invest in any project, tokens, or securities based upon this podcast episode. The host may personally own tokens that are mentioned on the podcast.‚Tom owns tokens in ETH, BTC, XTZ, LEO, DCR and STX.

Fortnite Pro FaZe Ewok Leaves Twitch for Mixer as Star Exodus Persists

Professional Fortnite player FaZe Ewok is leaving Twitch for Mixer. The 14-year-old streamer and gamer has 284,910 followers on Twitch. Fortnite streamer Ninja left Twitch for Mixer in August. In a post on Twitter, professional Fortnite player FaZe Ewok announced that she would now be streaming on Mixer. The Fortnite player, who at 13 years […]

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Trump’s North American Trade Deal Could Give Massive Boost to Dow Jones

House Speaker Nancy Pelosi says the USMCA is nearing ratification in the Democratically controlled House. Democrats say they want to be sure environmental and labor standards meet their expectations before striking a deal with Trump. One forex market analyst expects results that could be a boon for U.S. exports and the stock market. Nancy Pelosi […]

The post Trump’s North American Trade Deal Could Give Massive Boost to Dow Jones appeared first on CCN.com

Feds Nab Two Suspects in Alleged $550K Crypto-Fueled Scam

Two men have been charged with carrying out a nationwide cyber scheme. The U.S. DOJ alleges the men stole, or tried to steal, more than $550,000 in cryptocurrencies. The case comes in the wake of an uptick in cybercrime. Two Massachusetts men were arrested on Thursday and charged with carrying out a nationwide scheme to […]

The post Feds Nab Two Suspects in Alleged $550K Crypto-Fueled Scam appeared first on CCN.com


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