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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798.jpg" alt="" class="wp-image-407347" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A bitcoin mine near Kongyuxiang, Sichuan, China on August 12, 2016. Paul Ratje | The Washington Post | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;sank Monday on reports that China has intensified its crackdown on cryptocurrency mining.



The world’s largest digital currency fell 7% to a price of $32,801 Monday morning, dropping below $33,000 for the first time since June 8, according to data from Coin Metrics. It was last trading at $33,243 as of 5:50 a.m. ET. Smaller rivals like&nbsp;<a href="https://www.cnbc.com/quotes/ETH.CM=">ether</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/quotes/XRP.CM=">XRP</a>&nbsp;also tumbled, down 8% and 7% respectively.



Many bitcoin mines in Sichuan were shuttered Sunday after authorities in the southwestern Chinese province ordered a halt to crypto mining, according to a&nbsp;<a href="https://www.globaltimes.cn/page/202106/1226598.shtml" target="_blank" rel="noreferrer noopener">report</a>&nbsp;from the Communist Party-backed newspaper Global Times. More than 90% of China’s bitcoin mining capacity is estimated to be shut down, the paper said.



<a href="https://www.bloomberg.com/news/articles/2021-06-18/hydro-rich-chinese-city-is-said-to-clamp-down-on-crypto-mining" target="_blank" rel="noreferrer noopener">Bloomberg</a>&nbsp;and&nbsp;<a href="https://www.reuters.com/technology/chinas-cryptocurrency-mining-crackdown-spreads-sichuan-2021-06-19/" target="_blank" rel="noreferrer noopener">Reuters</a>&nbsp;also reported on the move from Sichuan authorities. It follows similar developments in China’s&nbsp;<a href="https://www.cnbc.com/2021/05/26/major-china-bitcoin-mining-hub-lays-out-harsher-crackdown-measures.html">Inner Mongolia</a>&nbsp;and Yunnan regions, as well as&nbsp;<a href="https://www.cnbc.com/2021/06/15/chinas-bitcoin-miner-exodus-.html">calls from Beijing to stamp out crypto mining</a>&nbsp;amid worries over its&nbsp;<a href="https://www.cnbc.com/2021/02/05/bitcoin-btc-surge-renews-worries-about-its-massive-carbon-footprint.html">massive energy consumption</a>.



Separately, China’s central bank&nbsp;<a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4273265/index.html" target="_blank" rel="noreferrer noopener">said Monday</a>&nbsp;it had summoned Alipay, the payments service run by Alibaba affiliate Ant Group, and some major banks urging them to crack down on crypto trading. China had&nbsp;<a href="https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business.html">already banned</a>&nbsp;financial institutions from providing crypto-related services.



China’s crackdown appears to have led to a significant decline in bitcoin’s hash rate — or processing power — which has fallen sharply in the last month, according to data from&nbsp;<a href="https://www.blockchain.com/charts/hash-rate" target="_blank" rel="noreferrer noopener">Blockchain.com</a>. An estimated 65% of global bitcoin mining is done in China.



Bitcoin’s network is decentralized, meaning it doesn’t have any central party or middleman to approve transactions or generate new coins. Instead, the blockchain is maintained by so-called miners who race to solve complex math puzzles using purpose-built computers to validate transactions. Whoever wins that race is rewarded with bitcoin.



This power-intensive process has led to growing concerns over the potential environmental harm of bitcoin, with everyone from&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;to U.S. Treasury Secretary&nbsp;<a href="https://www.cnbc.com/janet-yellen/">Janet Yellen</a>&nbsp;<a href="https://www.cnbc.com/2021/05/13/why-elon-musk-is-worried-about-bitcoin-environmental-impact.html">raising the alarm</a>. China, where most bitcoin mining is concentrated,&nbsp;<a href="https://www.cnbc.com/2021/04/29/climate-china-has-no-other-choice-but-to-rely-on-coal-power-for-now.html">relies heavily on coal power</a>. Last month, a coal mine in the Xinjiang region flooded and shut down, taking nearly a quarter of bitcoin’s hash rate offline.



However, miners in China often migrate to places like Sichuan, which are rich in hydropower, in the rainy season. And some industry efforts have been launched — including the Bitcoin Mining Council and the Crypto Climate Accord — in an effort to reduce cryptocurrencies’ carbon footprint.

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Bitcoin drops as China intensifies crypto mining crackdown

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106866611-1618204779569-gettyimages-1311630693-vcg111324823090.jpeg" alt="" class="wp-image-407311" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106866611-1618204779569-gettyimages-1311630693-vcg111324823090.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106866611-1618204779569-gettyimages-1311630693-vcg111324823090-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106866611-1618204779569-gettyimages-1311630693-vcg111324823090-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A medical worker receives the Covid-19 vaccine at the First Affiliated Hospital of Sun Yat-sen University on April 7, 2021 in Guangzhou, Guangdong Province of China. Southern Visual | Visual China Group | Getty Images</figcaption></figure>



GUANGZHOU, China — China has administered more than a billion doses of its Covid-19 vaccines, a key milestone in the world’s largest inoculation drive.



As of Saturday, 1,010,489,000 doses had been given to people in China, according to the country’s National Health Commission (NHC). More than 100 million doses had been administered in the six days up to and including Saturday.



It’s unclear how many people have been full inoculated as the government does not release those numbers. But Zhong Nanshan, one of China’s top health experts attached to the NHC, said in March that the country is aiming to have 40% of the population fully vaccinated by the end of June.



After the outbreak of the coronavirus in China last year, authorities moved to quickly bring it under control and largely succeeded in reopening the economy and&nbsp;<a href="https://www.cnbc.com/2021/01/23/wuhan-returns-to-normal-as-world-still-battles-deadly-covid-pandemic.html">returning life to normal.</a>&nbsp;One reason behind the&nbsp;<a href="https://www.cnbc.com/2021/06/03/slow-to-start-china-now-vaccinating-against-covid-at-a-staggering-pace.html">slow start to China’s vaccination drive earlier this year</a>&nbsp;was that people did not see the urgency for getting inoculated.



But the campaign has since ramped up. It took China 25 days to climb from 100 million doses to 200 million doses — and just six days from 800 million to 900 million, according to state-run media Xinhua.



Still, new coronavirus outbreaks have happened in the country over the past year. Since late May, the major city of <a href="https://www.cnbc.com/2021/06/09/china-guangzhou-covid-cases-rise-as-authorities-tighten-measures.html">Guangzhou in the south of China has been battling the delta variant</a>, which first emerged in India. It is the first time that variant has seen local transmission in mainland China.



The city reported zero new locally transmitted cases on Sunday following a mass testing drive and local lockdowns.



CNBC two visited vaccination sites in the city earlier this month and saw long lines as people rushed to get vaccinated.



The&nbsp;<a href="https://www.who.int/news/item/07-05-2021-who-lists-additional-covid-19-vaccine-for-emergency-use-and-issues-interim-policy-recommendations" target="_blank" rel="noreferrer noopener">World Health Organization has approved for emergency use the Chinese-made Sinopharm</a>&nbsp;since May, and&nbsp;<a href="https://www.who.int/news/item/01-06-2021-who-validates-sinovac-covid-19-vaccine-for-emergency-use-and-issues-interim-policy-recommendations" target="_blank" rel="noreferrer noopener">Sinovac Covid-19 vaccines</a>&nbsp;since June.



China has been shipping its vaccines to countries around the world including Brazil, the United Arab Emirates and Malaysia. However, U.S. and European health authorities have not authorized any Chinese vaccines for emergency use.



There have been questions over the effectiveness of the China-made vaccines. Efficacy rates for China’s Covid vaccines have been found to be lower than those developed by&nbsp;<a href="https://www.cnbc.com/quotes/PFE" target="_blank" rel="noreferrer noopener">Pfizer</a>&#8211;<a href="https://www.cnbc.com/quotes/22UA-DE" target="_blank" rel="noreferrer noopener">BioNTech</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/quotes/MRNA" target="_blank" rel="noreferrer noopener">Moderna</a>.&nbsp;



Chile, another recipient of Chinese vaccines, released the results of a real-world study of over 10 million people in April. It found that the&nbsp;<a href="https://apnews.com/article/latin-america-south-america-coronavirus-pandemic-chile-7d8c822e886ca19fba22c9712f3ed896" target="_blank" rel="noreferrer noopener">Sinovac vaccine reduces deaths by 80%</a>. However, despite being one of the world’s most highly vaccinated countries,&nbsp;<a href="https://www.cnbc.com/2021/04/19/covid-chiles-coronavirus-cases-hit-record-levels-despite-vaccine-rollout.html">Chile saw cases surge in April</a>.

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<a href="https://www.cnbc.com/quotes/BTC.BS=-USS">Bitcoin</a>, the world’s best known cryptocurrency, has a few flaws — and that’s triggered other digital currencies to come up with more viable options, according to a professor at Cornell University.



It isn’t as anonymous as people think it is, and “mining” bitcoin is bad for the environment, pointed out economics professor Eswar Prasad.&nbsp;It also doesn’t work well as a currency, he told CNBC on Thursday.



One interesting aspect is that other cryptocurrencies have come up with solutions to address some of bitcoin’s flaws, said Prasad, who was formerly head of the International Monetary Fund’s China division.



<h2 class="wp-block-heading" id="h-1-mining-harms-the-environment">1. Mining harms the environment</h2>



<a href="https://www.investopedia.com/terms/b/bitcoin-mining.asp" target="_blank" rel="noreferrer noopener">Bitcoin mining</a>&nbsp;refers to the energy-intensive process required to produce new coins and ensure the payment network is secure and verified.



The electricity used when transactions are validated on the bitcoin blockchain, as well as the mining process, is “certainly not good for the environment,” Prasad said.



<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;said last month that his electric car company will&nbsp;<a href="https://www.cnbc.com/2021/05/12/elon-musk-says-tesla-will-stop-accepting-bitcoin-for-car-purchases.html">stop accepting bitcoin</a>&nbsp;as a form of payment because of environmental concerns, causing the price of bitcoin to drop 5% in a matter of minutes.



He has since made an about-turn and said in a tweet on Sunday that<a href="https://www.cnbc.com/2021/06/13/musk-tesla-will-accept-bitcoin-when-miners-use-clean-energy.html"> Tesla will accept bitcoin in transactions</a> if it can confirm “reasonable” and “clean energy usage by miners.”



Crypto miners use purpose-built computers to solve complex mathematical equations that effectively enable a coin transaction to go through. The miners are rewarded for their efforts by being paid in the cryptocurrency.



However, the entire process used to create a bitcoin requires a lot of energy and can consume more power than entire countries such as Finland and Switzerland, according to the&nbsp;<a href="https://cbeci.org/cbeci/comparisons" target="_blank" rel="noreferrer noopener">Cambridge Bitcoin Electricity Consumption Index</a>.



On the other hand, <a href="https://www.cnbc.com/quotes/ETH=">Ethereum</a> — the second-largest cryptocurrency sometimes viewed as an alternative to bitcoin — is coming up with a different <a href="https://www.cnbc.com/2021/05/10/how-to-mine-ethereum.html">method of mining</a> that requires less energy, Prasad pointed out. 



Called&nbsp;<a href="https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/" target="_blank" rel="noreferrer noopener">“proof of stake,”</a>&nbsp;it is the underlying mechanism for ethereum that activates so-called “validators” on the network, if they can prove that they hold ether, or a “stake.”



Ultimately, it should remove the need for vast amounts of computing power needed to validate transactions and the&nbsp;<a href="https://blog.ethereum.org/2021/05/18/country-power-no-more/" target="_blank" rel="noreferrer noopener">Ethereum Foundation claims it will use 99.95% less energy</a>&nbsp;than before.



“That is going to be much less energy intensive, and it could deliver a lot of the benefits that bitcoin was supposed to deliver. It could also make transactions much cheaper and quicker,” said Prasad.



However, it’s not there yet, he added.



<h2 class="wp-block-heading">2. Not so anonymous after all</h2>



Earlier this month, U.S. law enforcement officials said they were able to&nbsp;<a href="https://www.cnbc.com/2021/06/07/us-recovers-some-of-the-money-paid-in-the-colonial-pipeline-ransom-officials-say.html">recover $2.3 million in bitcoin</a>&nbsp;paid to a criminal cybergroup involved in the ransomware attack on Colonial Pipeline in May.



The FBI said its agents were able to identify a virtual currency wallet that the hackers used to collect payment from Colonial Pipeline.



“The main idea of bitcoin… was to provide pseudonymity,” said Prasad. “But it turns out that if you use bitcoin a lot, and especially if you use Bitcoin to get any real goods and services, then it becomes possible eventually to link your address or your physical identity to your digital identity.”



What’s interesting, he said, is that there are other cryptocurrencies trying to fix this and offer more anonymity. He highlighted Monero and Zcash as some examples.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS.jpeg" alt="" class="wp-image-407128" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Chris Ratcliffe/Bloomberg via Getty Images</figcaption></figure>



“So bitcoin really has set off something of a search for a better alternative and people seem to be on the lookout for a medium of exchange that does not require them to go through a trusted institution like the government or a commercial bank — but it’s not quite there yet,” Prasad said.



<h2 class="wp-block-heading">3. Doesn’t work well as a currency</h2>



In theory, bitcoin was supposed to provide an anonymous and efficient medium of exchange but “it hasn’t worked in that respect,” said the economics professor.



Rather, it’s “slow and cumbersome” to use bitcoin to pay for goods and services, and the market is very volatile, Prasad said.



<a href="https://www.cnbc.com/2021/05/19/why-is-bitcoin-so-volatile.html">Bitcoin is prone to wide swings in volatility</a>, as seen by its&nbsp;<a href="https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-but-bottom-could-be-near-.html">30% plunge in a single day last month.</a>



“So you could take a bitcoin to a store and one day, get a cup of coffee and another day, with the same bitcoin, be able to treat yourself to a lavish meal. So that doesn’t work well for the medium of exchange,” he said.



Bitcoin has become a speculative asset for people who hope it will appreciate in value, rather than because they want to use it as a payment mode, Prasad said.



— CNBC’s Sam Shead contributed to this report.

Bitcoin has 3 flaws — and that could set the stage for other alternatives, says Cornell economist

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The underinvestment in&nbsp;<a href="https://www.cnbc.com/quotes/@HG.1">copper</a>&nbsp;over the past decade is causing supply problems now, at a time when prices have shot up and green initiatives create higher demand for the metal, says commodity analyst Reid I’Anson of market intelligence firm Kpler.



“A number of producers in this market has grown extremely conservative over the past decade. This has really caused underinvestment to kind of percolate through the supply chain, and obviously now that’s creating problems,” I’Anson told CNBC on Wednesday.



From electronics to home construction, copper is used extensively in manufacturing and demand for the metal is seen as an economic bellwether. Earlier this year, copper prices&nbsp;<a href="https://www.cnbc.com/2021/04/29/copper-hits-a-decade-high-traders-on-possible-economic-effect.html">hit their highest level in a decade</a>. So far this year, copper prices have risen about 21%.



“So a lot of these firms are now realizing that prices are higher and they want to take advantage, but the lead time to get new mines online is going to take quite a long time,”&nbsp;he said.



Looking ahead, the demand for copper is only going to pick up. One key factor is the <a href="https://www.cnbc.com/2021/05/05/electric-vehicles-renewables-will-need-rise-in-mineral-supply-iea.html">drive toward sustainability</a> as <a href="https://www.cnbc.com/2020/06/24/coronavirus-why-the-pandemic-could-spark-a-copper-rally.html">governments spend more on green initiatives</a>, said I’Anson.



Copper is heavily used in the development of electric vehicles, their infrastructure, as well as in renewable power generation.



“I think that the metal will do quite well, given the fact that you’re gonna have a lot of westernized economies &#8230; willing to spend a lot of money to make sure that they are ‘greening their economy’ and that’s going to require a lot of copper input &#8230; moving forward,” I’Anson said.



<h2 class="wp-block-heading" id="h-chile-instability-a-risk-to-copper">Chile instability a risk to copper</h2>



Political instability in Chile, where much of the world’s copper is mined, will also contribute to the problem,&nbsp;said I’Anson.



Last month, the&nbsp;<a href="https://www.reuters.com/world/americas/chile-ruling-coalition-heading-disappointment-constitutional-delegates-vote-2021-05-17/" target="_blank" rel="noreferrer noopener">country’s ruling coalition unexpectedly failed</a>&nbsp;to garner the number of seats needed to draft a new constitution. Last year, Chileans voted to rewrite the country’s constitution after mass protests about inequality in 2019.



“You also have some uncertainty around Covid, which is making new investments slower than what was originally expected, say, six to 12 months ago,” said I’Anson. “So Chile, which is a key copper producer, is struggling to set a timeline for large investments that need to take place to meet the supply shortfall that is already apparent within this market now.”

copper-4318679_960_720

Copper supply shortfall could linger as green initiatives spur demand, analyst says

The Federal Reserve on Wednesday considerably raised its expectations for inflation this year and brought forward the time frame on when it will next raise interest rates.



However, the central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying program, though Fed Chairman Jerome Powell acknowledged that officials discussed the issue at the meeting.



“You can think of this meeting that we had as the ‘talking about talking about’ meeting,” Powell said in a phrase that recalled a statement he made a year ago that the Fed wasn’t “thinking about thinking about raising rates.”



As expected, the policymaking Federal Open Market Committee unanimously left its benchmark short-term borrowing rate anchored near zero. But officials indicated that rate hikes could come as soon as 2023, after saying in March that it saw no increases until at least 2024. The so-called dot plot of individual member expectations pointed to two hikes in 2023.



Though the Fed raised its headline inflation expectation to 3.4%, a full percentage point higher than the March projection, the post-meeting statement continued to say that inflation pressures are “transitory.” The raised expectations come amid the biggest rise in consumer prices in about 13 years.



“This is not what the market expected,” said James McCann, deputy chief economist at Aberdeen Standard Investments. “The Fed is now signaling that rates will need to rise sooner and faster, with their forecast suggesting two hikes in 2023. This change in stance jars a little with the Fed’s recent claims that the recent spike in inflation is temporary.”



Markets reacted to the Fed news, with&nbsp;<a href="https://www.cnbc.com/2021/06/15/stock-market-futures-open-to-close-news.html">stocks falling</a>&nbsp;and government bond yields higher as investors anticipated tighter Fed policy ahead, including the likelihood that the bond purchases will slow as soon as this year.



“If you’re going to get two rate hikes in 2023, you have to start tapering fairly soon to reach that goal,” said Kathy Jones, head of fixed income at Charles Schwab. “It takes maybe 10 months to a year to taper at a moderate pace. Then you’re looking at we need to start tapering maybe later this year, and if the economy continues to run a little bit hot, rate hikes sooner rather than later.”



Even with the raised forecast for this year, the committee still sees inflation trending to its 2% goal over the long run.



“Our expectation is these high inflation readings now will abate,” Powell said at his post-meeting news conference.



Powell also cautioned about reading too much into the dot-plot, saying it is “not a great forecaster of future rate moves. “Lift-off is well into the future,” he said.



Powell did note that some of the dynamics associated with the reopening are “raising the possibility that inflation could turn out to be higher and more persistent than we anticipate.”



Powell said progress toward the Fed’s dual employment and inflation goals was happening somewhat faster than anticipated. He particularly noted the sharp rebound in growth that now has the Fed seeing GDP 7% in 2021.



“Much of this rapid growth reflect the continued bounceback in activity from depressed levels, and the factors more affected by the pandemic remain weak but have shown improvement,” he said.



Officials raised their GDP expectations for this year to 7% from 6.5% previously. The unemployment estimate remained unchanged at 4.5%.



The statement tempered some of the language of previous statements since the Covid-19 crisis. Since last year, the FOMC had said the pandemic was “causing tremendous human and economic hardship across the United States and around the world.”



Wednesday’s statement instead noted the progress vaccinations had made against the disease, noting that “indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement.”



Investors were watching the meeting closely for statements about how Fed officials see an economy undergoing rapid expansion since the depths of the pandemic crisis in 2020.



Recent indicators show that in some respects the U.S. is expanding at the fastest rate since World War II. But that growth also has come with inflation, and the central bank has faced pressure from various sources to at least start curtailing the at least $120 billion in bond purchases it is making each month.



At his post-meeting news conference Chairman Jerome Powell noted that Fed officials “had discussions” on the progress made toward the inflation and employment goals relative to the asset purchases, and will continue do do so in the months ahead.



Markets had been looking for the possibility that the committee would address its open-market operations where it provides short-term funding for financial institutions. The so-called overnight repo operations, where banks exchange high-end collateral for reserves, have been seeing record demand lately as institutions look for any yield above the negative rates they are seeing in some markets.



The committee did raise the interest it pays on excess reserves by 5 basis points to 0.15%.



In a separate matter, the FOMC announced that it would extend dollar-swap lines with global central banks through the end of the year. The currency program is one of the last remaining Covid-era initiatives the Fed took to keep global markets flowing.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106897115-1623744771472-gettyimages-1233454482-AA_14062021_379705.jpeg" alt="" class="wp-image-406891" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106897115-1623744771472-gettyimages-1233454482-AA_14062021_379705.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106897115-1623744771472-gettyimages-1233454482-AA_14062021_379705-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106897115-1623744771472-gettyimages-1233454482-AA_14062021_379705-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>British Prime Minister Boris Johnson (R) elbow-bumps a greeting with Australian Prime Minister Scott Morrison (L) in the doorway of 10 Downing Street in London, United Kingdom on June 14, 2021. Anadolu Agency | Anadolu Agency | Getty Images</figcaption></figure>



The U.K. has agreed a free trade deal with Australia which it said marked a “new dawn” in its relationship with the country.



The deal — known as a Free Trade Agreement or FTA — means it will cost less for British businesses to sell products like cars, confectionery&nbsp;and Scotch whisky into Australia, the U.K. government said Tuesday.



The move will boost U.K. industries that employ 3.5 million people across the country, it added.



“Today marks a new dawn in the UK’s relationship with Australia, underpinned by our shared history and common values,” U.K. Prime Minister Boris Johnson said in a statement.



“Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.”



The deal was flagged late Monday when Australia’s minister for trade said Johnson and his Australian counterpart Scott Morrison had agreed the broad terms of the agreement over dinner in Downing Street in London.



The U.K. is keen to strike trade deals with nations around the world following its departure from the EU, but the deal is not without controversy. British farmers, for example, have expressed concerns that they could be undercut by cheap Australian agricultural imports and about Australian food standards.



Addressing these concerns, the government said Tuesday that British farmers “will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards.”



“We are also supporting agricultural producers to increase their exports overseas, including to new markets in the Indo-Pacific,” it said.



Australia’s prime minister remarked Tuesday that “reinforcing our trade relationship is a great opportunity.”



Speaking to the Australia-United Kingdom Chamber of Commerce in London, Morrison noted that while there might be some “hesitancy” when it come to the new trade deal, “the ultimate explanation is jobs.”&nbsp;



“We either are passionate about growing the markets in which we can operate, providing opportunities for our own producers and suppliers and services, or we will stay in a situation of being unable to take up those opportunities,” he said.



<h2 class="wp-block-heading" id="h-post-brexit-trade">Post-Brexit trade</h2>



The free trade deal with Australia is the first major agreement negotiated from scratch by the government since the U.K. left the EU. A final “Agreement in Principle” will be published in the coming days.



The deal is seen as a precursor to the U.K. joining a wider Asia Pacific free-trade agreement known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).



On Tuesday, the government said the trade deal with Australia “is also a gateway into the fast-growing Indo-Pacific region and will boost our bid to join CPTPP, one of the largest free trade areas in the world, covering £9 trillion of GDP and 11 Pacific nations from Australia to Mexico.”



The U.K. was Australia’s fifth largest trading partner in 2019 and in 2020, and last year the U.K.-Australia trade relationship was worth £13.9 billion ($19.6 billion).



Trade is expected to grow under the deal, the government said, adding that it will also offer more opportunities to young people (Brits under the age of 35 will be able to travel and work in Australia more freely following the agreement).

106897115-1623744771472-gettyimages-1233454482-AA_14062021_379705

UK agrees post-Brexit trade deal with Australia

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104587243-GettyImages-812524742-jamie-dimon.jpg" alt="" class="wp-image-406848" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104587243-GettyImages-812524742-jamie-dimon.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104587243-GettyImages-812524742-jamie-dimon-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104587243-GettyImages-812524742-jamie-dimon-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Jamie Dimon, chief executive officer of JPMorgan Chase &amp; Co. Marlene Awaad | Bloomberg | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/jamie-dimon/">Jamie Dimon</a>&nbsp;believes cash is king – at least for the time being.



<a href="https://www.cnbc.com/quotes/JPM" target="_blank" rel="noreferrer noopener">JPMorgan Chase</a>&nbsp;has been “effectively stockpiling” cash rather than using it to buy Treasuries or other investments because of the possibility higher inflation will force the Federal Reserve to boost interest rates, Dimon said Monday during a conference. The biggest U.S. bank by assets has positioned itself to benefit from rising interest rates, which will let it buy higher-yielding assets, he said.



“We have a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory,” said Dimon, longtime JPMorgan CEO.



“If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates,” Dimon said. “I do expect to see higher rates and more inflation, and we’re prepared for that.”



Dimon waded into the ongoing debate on whether higher inflation is a result of temporary aspects of the reopening, like raw material shortages or supply chain issues, or if it could be more lasting. Fed officials have called the current spike in inflation transitory, meaning temporary and short-lived. But there are increasingly voices, including&nbsp;<a href="https://www.cnbc.com/quotes/.BBKA" target="_blank" rel="noreferrer noopener">Deutsche Bank</a>&nbsp;economists and hedge fund&nbsp;<a href="https://www.cnbc.com/2021/06/14/paul-tudor-jones-says-bet-heavily-on-every-inflation-trade-if-fed-keeps-ignoring-higher-prices.html">billionaires</a>, who&nbsp;<a href="https://www.cnbc.com/2021/06/07/deutsche-bank-warns-of-global-time-bomb-coming-due-to-rising-inflation.html">warn</a>&nbsp;of consequences should the Fed ignore&nbsp;<a href="https://www.cnbc.com/2021/06/14/paul-tudor-jones-says-the-feds-credibility-is-at-risk-with-inflation-view.html">inflation</a>.



Later Monday,&nbsp;<a href="https://www.cnbc.com/quotes/MS" target="_blank" rel="noreferrer noopener">Morgan Stanley</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/james-gorman/">James Gorman</a>&nbsp;told CNBC’s Wilfred Frost on Closing Bell that he, too thinks that higher inflation may be lasting and the Fed may be forced to hike rates earlier than expected.



“The question is when does the Fed move?” Gorman said. “It has to move at some point, and I think the bias is more likely earlier than what the current dots suggest, rather than later.″



JPMorgan’s move to accumulate cash accounts for about half of the decrease in anticipated net interest income this year, Dimon said. The other half comes from lower credit card balances, he said. The bank now expects $52.5 billion in net interest income in 2021, down from the&nbsp;<a href="https://www.spglobal.com/marketintelligence/en/news-insights/blog/banking-essentials-newsletter-june-edition" target="_blank" rel="noreferrer noopener">$55 billion</a>&nbsp;it disclosed in February.



In the wide-ranging discussion, Dimon struck on several familiar themes. He warned that banks were under threat from fintech and Big Tech players including&nbsp;<a href="https://www.cnbc.com/quotes/PYPL" target="_blank" rel="noreferrer noopener">PayPal</a>, which has a larger market capitalization than nearly all U.S. banks.



Dimon disclosed that the bank’s automated investing service You Invest has garnered about $50 billion in assets, despite the fact that “we don’t even think it’s a very good product yet.”



The bank’s second-quarter revenue from trading will be “a little north of $6 billion,” which is lower from the “exceptional” period a year ago, Dimon said. Investment banking revenue is headed about 20% higher than a year ago and could be one of the bank’s best quarters on strength in mergers advice and equity and debt issuance, he said.

104587243-GettyImages-812524742-jamie-dimon

Jamie Dimon says JPMorgan is hoarding cash because ‘very good chance’ inflation is here to stay

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362.jpeg" alt="" class="wp-image-406748" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Win McNamee | Getty Images</figcaption></figure>



Bitcoin’s price surged Sunday evening stateside after Tesla CEO Elon Musk said the electric vehicle maker could accept bitcoin transactions again in future.



As of 1:52 a.m. ET Monday, Bitcoin surged 12.79% to $39,533.81, according to data from Coindesk. Since the start of the year, bitcoin has surged more than 30%, though its current price is way off the all-time high of $64,829.14 hit in April.



Those gains came after Musk said Sunday that Tesla will resume allowing bitcoin transactions “when there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”



<a href="https://www.cnbc.com/2021/05/12/elon-musk-says-tesla-will-stop-accepting-bitcoin-for-car-purchases.html">Teslas halted car purchases with bitcoin in mid-May</a>, citing concerns over the climate impact of cryptocurrency mining.



<a href="https://www.cnbc.com/2021/02/05/bitcoin-btc-surge-renews-worries-about-its-massive-carbon-footprint.html">Crypto mining requires massive amounts of energy</a>&nbsp;to fuel powerful computers — bitcoin mining consumes more energy than entire countries such as Finland and Belgium, according to the&nbsp;<a href="https://cbeci.org/cbeci/comparisons" target="_blank" rel="noreferrer noopener">Cambridge Bitcoin Electricity Consumption Index</a>.



The latest development marks yet another example of large market moves following comments by the Tesla CEO and billionaire.



<a href="https://www.cnbc.com/2021/05/13/bitcoin-btc-price-falls-after-tesla-stops-car-purchases-with-crypto.html">Hundreds of billions of dollars were wiped off the cryptocurrency market</a>&nbsp;after Musk tweeted in May about Tesla’s suspension of car purchases using bitcoin. Musk’s past tweets have also been linked to moves in the stock market — ranging from&nbsp;<a href="https://www.cnbc.com/2021/01/29/elon-musks-tweets-are-moving-markets.html">so-called meme stocks</a>&nbsp;such as&nbsp;<a href="https://www.cnbc.com/quotes/GME" target="_blank" rel="noreferrer noopener">GameStop</a>, to the&nbsp;<a href="https://www.cnbc.com/2021/06/02/elon-musk-tweets-again-sending-shares-of-baby-shark-investor-soaring.html">investor of viral song “Baby Shark.”</a>



<h2 class="wp-block-heading" id="h-bitcoin-under-environmental-spotlight">Bitcoin under environmental spotlight</h2>



The environmental impact of bitcoin mining has come under intense scrutiny.



As part of its crackdown on bitcoin, China’s Inner Mongolia region — a major bitcoin mining hub —&nbsp;<a href="https://www.cnbc.com/2021/05/26/major-china-bitcoin-mining-hub-lays-out-harsher-crackdown-measures.html">in late-May proposed punishments</a>&nbsp;for companies and individuals involved in digital currency mining. It came after&nbsp;<a href="https://www.cnbc.com/2021/05/21/bitcoin-falls-after-china-calls-for-crackdown-on-bitcoin-mining-and-trading-behavior.html">Chinese Vice Premier Liu He said it is necessary to “crack down on Bitcoin mining</a>&nbsp;and trading behavior” to prevent the “transmission of individual risks to the social field.”



Elsewhere, Iran’s government in announced in May a&nbsp;<a href="https://www.cnbc.com/2021/05/26/iran-bans-bitcoin-mining-as-its-cities-suffer-blackouts.html">ban on the mining of bitcoin and other cryptocurrencies</a>&nbsp;until Sept. 22, after officials said blackouts in the country’s capital of Tehran and several other large cities were in part due to the energy-intensive activity.

106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362

Bitcoin pops nearly 13% after Musk suggests Tesla could accept the cryptocurrency again

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