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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="630" height="354" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/bitcoin-1.jpeg" alt="" class="wp-image-404731" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/bitcoin-1.jpeg 630w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/bitcoin-1-300x169.jpeg 300w" sizes="auto, (max-width: 630px) 100vw, 630px" /></figure>



Cryptocurrency is known for volatility and some experts say crashes tend to happen on weekends.



“This has been a phenomenon in crypto for several years,” said Stephen McKeon, associate professor of finance at the University of Oregon in Eugene, and partner at Collab+Currency, a cryptocurrency-focused investment fund.&nbsp;



These weekend dips may have significant effects as regulators weigh the future of digital currency, experts say. Here’s why these crashes may be happening.



<h2 class="wp-block-heading" id="h-less-trading-on-weekends">Less trading on weekends</h2>



One of the reasons for weekend cryptocurrency volatility is there are fewer trades, said Amin Shams, assistant professor of finance at Ohio State University in Columbus, Ohio.



“When the volume is low, the same trade size can move prices a lot more,” he said



With banks closed over the weekend, there is less trading because investors may not be able to add money to their accounts, McKeon said.



“You get moments of market panic where there’s a lot of selling pressure,” he said.&nbsp;



Typically, there’s a rebound on Sunday night as Asian banks open and into Monday as U.S. banks follow, McKeon said.&nbsp;



Plus, there are cryptocurrency influencers like&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;who “wave a heavy hand over the crypto space,” said Tyrone Ross, CEO of Onramp Invest in New York.



When Musk tweets something negative about bitcoin after-hours, it may spark a wave of activity.



<h2 class="wp-block-heading" id="h-trading-on-margin">Trading on margin&nbsp;</h2>



Another reason for weekend price swings may be investors trading&nbsp;<a href="https://www.cnbc.com/2021/05/25/bitcoin-crashes-driven-by-big-margin-bets-new-crypto-banking.html">cryptocurrency on margin</a>, which is borrowing money from the exchanges to buy more assets, Shams said.



When digital currency prices dip below a certain level, traders must repay the loan, known as a “margin call.”&nbsp;



But if investors don’t cover the loan, exchanges may sell the digital currency to ensure they receive the borrowed money back.



With banks closed over the weekend, some traders may struggle to pay off the borrowed funds because they can’t move money into their accounts, triggering sell-offs from exchanges, Shams said.&nbsp;



“That’s going to drop the price further,” he added.



<h2 class="wp-block-heading" id="h-market-manipulation">Market manipulation</h2>



It’s also possible those trying to artificially influence cryptocurrency prices may be a factor.&nbsp;



“There are a lot of studies that show there is [market] manipulation,” said Shams.



For example,&nbsp;<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066" target="_blank" rel="noreferrer noopener">2019 research</a>&nbsp;shows how tether, a digital currency tied to the U.S. dollar, may have artificially inflated bitcoin and other cryptocurrency prices during the 2017 boom.



But researchers still don’t know the extent to which it happens, he said.&nbsp;I have not personally seen any conclusive evidence that suggests manipulation.Stephen McKeonASSOCIATE PROFESSOR OF FINANCE AT THE UNIVERSITY OF OREGON



One theory points to so-called spoofing, involving fake buy or sell orders to influence cryptocurrency prices by creating a false sense of supply and demand.&nbsp;



Some believe this happens more often during the week, causing digital currency prices to rise. But this theory may only be speculation, he said.



Other experts say there are “mixed views” on these practices.&nbsp;



“I have not personally seen any conclusive evidence that suggests manipulation,” McKeon said.



<h2 class="wp-block-heading" id="h-crypto-etfs">Crypto ETFs</h2>



Regardless of the reason for weekend volatility, it presents challenges for regulators weighing the approval of&nbsp;<a href="https://www.cnbc.com/2021/04/18/were-closer-to-a-bitcoin-etf-but-not-all-the-way-there-yet-cio.html">cryptocurrency-based exchange-traded funds</a>.



While ETFs trade during the work week, investors can buy or sell cryptocurrency 24 hours per day, seven days per week, and may create a mismatch for crypto ETFs, Shams said.



For example, if the digital currency market drops by 20% on a Sunday, those eager to sell may be stuck with their crypto ETFs until the markets open again on Monday.&nbsp;



Securities and Exchange Commission Chair Gary Gensler has called for&nbsp;<a href="https://www.cnbc.com/2021/05/07/sec-chairman-gary-gensler-says-more-investor-protections-are-needed-for-bitcoin-and-crypto-markets.html">greater investor protections for cryptocurrency</a>, signaling more regulation may be necessary before the agency approves crypto ETFs.&nbsp;



The SEC is currently reviewing bitcoin and ethereum ETF applications from several companies.

106888428-1622028919907-gettyimages-1232967074-omarques_18052021_crypto_3

Here’s why cryptocurrency crashes on weekends

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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/2021/06/106895309-1623346623938-106895309-16233465392021-06-10t173439z_1794430612_rc2m6h92rbg2_rtrmadp_0_g7-summit-biden.jpg" alt="" class="wp-image-406615" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106895309-1623346623938-106895309-16233465392021-06-10t173439z_1794430612_rc2m6h92rbg2_rtrmadp_0_g7-summit-biden.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106895309-1623346623938-106895309-16233465392021-06-10t173439z_1794430612_rc2m6h92rbg2_rtrmadp_0_g7-summit-biden-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106895309-1623346623938-106895309-16233465392021-06-10t173439z_1794430612_rc2m6h92rbg2_rtrmadp_0_g7-summit-biden-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>U.S. President Joe Biden speaks about his administration’s pledge to donate 500 million doses of the Pfizer (PFE.N) coronavirus vaccine to the world’s poorest countries, during a visit to St. Ives in Cornwall, Britain, June 10, 2021. Kevin Lemarque | Reuters</figcaption></figure>



WASHINGTON — President Joe Biden and leaders of the G-7 group of nations will publicly endorse a global minimum corporate tax of at least 15% on Friday, one piece of a broader agreement to update international tax laws for a globalized, digital economy.



The leaders will also announce a plan to replace Digital Services Taxes, which targeted the biggest American tech companies, with a new tax plan linked to the places where multinationals are actually doing business, rather than where they are headquartered.



For the Biden administration, the Global Minimum Tax plan represents a concrete step towards its goal of creating what it calls a “foreign policy for the middle class.”



This strategy aims to ensure that globalization and trade are harnessed for the benefit of working Americans, and not merely for billionaires and multinational corporations.



For the rest of the world, the GMT is intended to end the tax cutting arms race that has led some countries to cut their corporate taxes much lower than others, in order to attract multinational companies.



If widely enacted, the GMT would effectively end the practice of global corporations seeking out low-tax jurisdictions like Ireland and the British Virgin Islands to move their headquarters to, even though their customers, operations and executives are located elsewhere.



The second major initiative Biden and G-7 leaders will announce Friday is a plan they are “actively considering” to expand the International Monetary Fund’s supply of Special Drawing Rights, an internal IMF currency, that are available to low-income countries.&nbsp;



This plan is aimed at expanding international development financing to poor countries and helping them to purchase Covid vaccines and recover more quickly from the pandemic’s effects, according to a White House fact sheet.



The White House also said G-7 leaders will agree to “continue providing policy support to the global economy for as long as necessary to create a strong, balanced, and inclusive economic recovery.”



But it is the GMT plan that has the greatest potential to impact corporate bottom lines and influence investor decisions.



The G-7 tax agreement “will serve as a springboard to getting broader agreement at the G-20,” said a senior administration official, who spoke to reporters on background in order to discuss ongoing talks.



A joint statement issued Thursday by Biden and British Prime Minister Boris Johnson offers a preview of what to expect from the global tax agreement between the G-7 partner nations.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106895154-16233361742021-06-10t144218z_1156412984_rc2qxn94xtlj_rtrmadp_0_g7-summit-biden.jpeg" alt="" class="wp-image-406616" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106895154-16233361742021-06-10t144218z_1156412984_rc2qxn94xtlj_rtrmadp_0_g7-summit-biden.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106895154-16233361742021-06-10t144218z_1156412984_rc2qxn94xtlj_rtrmadp_0_g7-summit-biden-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106895154-16233361742021-06-10t144218z_1156412984_rc2qxn94xtlj_rtrmadp_0_g7-summit-biden-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Britain’s Prime Minister Boris Johnson speaks with U.S. President Joe Biden during their meeting, ahead of the G7 summit, at Carbis Bay, Cornwall, Britain June 10, 2021. Toby Melville | Reuters</figcaption></figure>



“We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises,” the statement says.



“We also commit to a global minimum tax of at least 15% on a country by country basis.”



As part of this agreement, “we will provide for &#8230; the removal of all Digital Services Taxes, and other relevant similar measures, on all companies.”



The removal of Digital Services Taxes, a patchwork of country-by-country taxes that specifically target the biggest American tech companies, represents a real victory for the United States.&nbsp;



Analysts&nbsp;<a href="https://www.cnbc.com/2021/06/08/taxes-global-minimum-corporate-tax-could-bite-fang-stocks.html">say the removal</a>&nbsp;of these taxes — and an end to the looming threat of new DSTs — would add a level of certainty to the international tax system that would ultimately benefit Big Tech companies in the long term, even if a new Global Minimum Tax raised costs in the near term.



Once the G-7 leaders adopt the GMT proposal, the next step will be to win support for it among the G-20 nations, a diverse group of economies that includes China, India, Brazil and Russia.&nbsp;



G-20 finance ministers and central bank governors are scheduled to meet in Venice, Italy, in July. The IMF funding proposal and the international tax plan are both expected to be high on the agenda.&nbsp;



It’s unclear at this point whether the GMT plan will win the support of the 19 member nations and the European Union.



Details of the plan have yet to be hammered out, and some of the G-20 countries keep corporate tax rates relatively low in an effort to lure businesses.



Much of the groundwork for adopting a GMT has already been laid by the Organization for Economic Cooperation and Development, or OECD, which&nbsp;<a href="https://www.zdnet.com/article/oecd-work-on-multinational-tax-avoidance-pushed-to-mid-2021/" target="_blank" rel="noreferrer noopener">released a blueprint last fall</a>&nbsp;outlining the two-pillar approach to international taxation.



The&nbsp;<a href="https://oecdecoscope.blog/2020/10/20/tax-challenges-from-digitalisation-a-global-two-pillar-solution-could-increase-tax-revenues-and-support-economic-activity/" target="_blank" rel="noreferrer noopener">OECD Inclusive Framework on Base Erosion and Profit Shifting,</a>&nbsp;known as BEPS, is the product of negotiations with 137 member countries and jurisdictions.



One pillar is the plan for countries to collect taxes from multinational corporations based on the share of that company’s profits derived from a particular country’s consumers.



The second pillar is the global minimum corporate tax, a set rate of at least 15% that would apply even when tax rates in a particular country are lower than that.

106895309-1623346623938-106895309-16233465392021-06-10t173439z_1794430612_rc2m6h92rbg2_rtrmadp_0_g7-summit-biden

Biden and G-7 leaders will endorse a global minimum corporate tax of at least 15%

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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/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059.jpeg" alt="" class="wp-image-406478" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Chesnot | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;surged on Wednesday after&nbsp;<a href="https://www.cnbc.com/2021/06/09/el-salvador-proposes-law-to-make-bitcoin-legal-tender.html">El Salvador passed a law to adopt bitcoin as legal tender</a>.



The cryptocurrency was trading at $37,176.44 at around 11:42 p.m. ET, up 13% from the previous 24 hours, according to CoinDesk data.



On Wednesday, lawmakers in the Central American country passed a law that made bitcoin legal tender. Among other things, it means prices can now be shown in bitcoin and tax contributions can be paid with the digital currency.



Bitcoin proponents, who have&nbsp;<a href="https://www.cnbc.com/2018/03/25/bitcoin-will-eventually-be-the-single-global-currency-twitters-jack-dorsey.html">long seen the digital coin as a viable alternative to fiat currencies</a>, welcomed El Salvador’s moves.



The country has<a href="https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html"> struck a partnership with digital wallet company Strike,</a> to build the country’s modern financial infrastructure using bitcoin technology.



Other cryptocurrencies got a lift as well, and ether and XRP were both trading higher.



Bitcoin is still significantly off of its record high of $64,829.14 that was hit in April.



Bitcoin is known for&nbsp;<a href="https://www.cnbc.com/2021/05/24/bitcoins-trading-action-lately-is-wild-even-by-cryptos-standards-and-the-drama-is-not-over-yet.html">wild price swings</a>&nbsp;that have prompted critics to suggest it is&nbsp;<a href="https://www.cnbc.com/2021/04/23/bitcoin-a-gimmick-and-resembles-a-ponzi-scheme-black-swan-author-.html">not suitable to be an effective currency</a>. El Salvador’s case will be closely watched to see how bitcoin might work as a payments mechanism on a country-wide basis.

106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059

Bitcoin rallies 13% jumping above $37,000 after El Salvador passes law to adopt it as legal tender

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Some of the world’s richest men — Jeff Bezos, Elon Musk, Warren Buffett, Carl Icahn, Michael Bloomberg and George Soros — pay just a tiny fraction of their increasing wealth in taxes, and in some cases pay no taxes in a given year,&nbsp;<a href="https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax" target="_blank" rel="noreferrer noopener">according to a report Tuesday.</a>



<a href="https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax" target="_blank" rel="noreferrer noopener">ProPublica, citing confidential IRS data it obtained on thousands of wealthy people</a>, reported that the 25 richest Americans “saw their worth rise a collective $401 billion from 2014 to 2018.”



But those people paid a total of just $13.6 billion in federal income taxes for those five years, which “amounts to a true tax rate of only 3.4%,” the article noted.



In contrast, the median U.S. household in recent years earned around $70,000 annually and paid 14% of that in federal taxes. Couples in the highest income tax rate bracket paid a rate of 37% on earnings higher than $628,300, the report said.



ProPublica pointed out that billionaires, unlike most other people whose earnings come from conventional wage income, often benefit from “tax-avoidance strategies beyond the reach of ordinary people.”



And their wealth is often largely based on the rising value of stock and real estate that is not considered taxable unless those assets are sold, the report noted.



ProPublica did not disclose how it obtained the tax information cited in the article, but did say that the outlet “went&nbsp;to considerable lengths to confirm that the information sent to us is accurate.” CNBC has not independently verified the information in the report.



The article said that according to ProPublica’s calculations, Buffett’s “true tax rate” was just 0.1%, or $23.7 million in taxes he paid on wealth growth of $24.3 billion, during the five-year time frame.



During that period, Buffett, CEO of&nbsp;<a href="https://www.cnbc.com/quotes/BRK.A" target="_blank" rel="noreferrer noopener">Berkshire Hathaway</a>, reported legally taxable income of $125 million.



Bezos, who as founder of&nbsp;<a href="https://www.cnbc.com/quotes/AMZN" target="_blank" rel="noreferrer noopener">Amazon</a>&nbsp;has become the world’s richest person, paid slightly less than 1% in ProPublica’s true tax rate, or $973 million, on wealth growth of $99 billion during the five-year period. Bezos’ actual taxable income during that time was $4.22 billion, the report said.



In 2007, Bezos “did not pay a penny in federal income taxes,” and he also avoided any federal income tax liability in 2011, the article said.



The world’s second-richest person,&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO Elon Musk, paid a 3.27% true tax rate, or $455 million, on wealth growth of $13.9 billion, ProPublica said.



Musk, who had an actual taxable income of $1.52 billion during the five-year period, paid no federal income taxes in 2018, according to ProPublica.



Bloomberg, former New York City mayor and founder of Bloomberg LP, paid a 1.3% true tax rate, or $292 million, during the time period looked at by ProPublica. His actual taxable income was $10 billion, the report said.



Soros, an investor, paid no federal income taxes between 2016 and 2018, which was a result of him losing money on his investments, his spokesman told ProPublica.



Icahn, another investor, paid no federal income tax in 2016 and 2017, years in which his total adjusted gross income was $544 million, the article said.



Icahn told ProPublica that he registered tax losses in both of those years as a result of taking deductions worth hundreds of millions of dollars due to the interest he paid on loans.



Asked whether it was appropriate that he had paid no income tax in certain years, Icahn said he was perplexed by the question, ProPublica reported.



“There’s a reason it’s called income tax,” Icahn was quoted as saying in the article. “The reason is if, if you’re a poor person, a rich person, if you are&nbsp;<a href="https://www.cnbc.com/quotes/AAPL" target="_blank" rel="noreferrer noopener">Apple</a>&nbsp;— if you have no income, you don’t pay taxes.”



He added: “Do you think a rich person should pay taxes no matter what? I don’t think it’s germane. How can you ask me that question?”



White House spokeswoman Jen Psaki on Tuesday was asked about the leak of tax information to Pro Publica.



“Any unauthorized disclosure of confidential government information by a person with access is illegal, and we take this very seriously,” Psaki told reporters at a news conference.



“The IRS commissioner said today that they are taking all appropriate measures, including referring the matter to investigators and Treasury and the IRS are referring the matter to the office of the inspector general, the Treasury inspector general for tax administration, the FBI and the US attorney’s office for the District of&nbsp;Columbia,&nbsp;all of whom have independent authority to investigate



“So obviously, we take it very seriously,” she added.



Psaki also said that she would not comment on the specific data in the article, but also said, “Broadly speaking, we know that there is more to be done to ensure that corporations and individuals at the highest income are paying more of their fair share.”

benzo

Bezos, Buffett, Bloomberg, Musk, Icahn and Soros pay tiny fraction of wealth in income taxes, report reveals

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1.jpeg" alt="" class="wp-image-406330" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Nayib Bukele, El Salvador’s president, delivers a speech to Congress at the Legislative Assembly building in San Salvador, El Salvador, on Tuesday, June 1, 2021. Photographer: Camilo Freedman/Bloomberg via Getty Images Bloomberg | Bloomberg | Getty Images</figcaption></figure>



El Salvador has become the first country to adopt <a href="https://www.cnbc.com/quotes/BTC.CB=">bitcoin</a> as legal tender.



Lawmakers in the Central American country’s Congress voted by a “supermajority” in favor of the Bitcoin Law, receiving 62 out of 84 of the legislature’s vote.



The price of bitcoin was up 5% to $34,239.17 shortly after the vote.



Earlier on Wednesday, President Nayib Bukele sent the law to to the country’s Congress for a vote.



“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law reads.



Prices can now be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.



Bitcoin is known for&nbsp;<a href="https://www.cnbc.com/2021/05/24/bitcoins-trading-action-lately-is-wild-even-by-cryptos-standards-and-the-drama-is-not-over-yet.html">wild price swings</a>&nbsp;that have prompted critics to suggest it is&nbsp;<a href="https://www.cnbc.com/2021/04/23/bitcoin-a-gimmick-and-resembles-a-ponzi-scheme-black-swan-author-.html">not suitable to be an effective currency</a>. It’s still unclear how El Salvador will ultimately roll out bitcoin as legal tender.



The exchange rate with the <a href="https://www.cnbc.com/quotes/.DXY">U.S. dollar</a> “will be freely established by the market,” according to the proposed law. El Salvador’s current official currency is the U.S. dollar.



The law also says that the state will “promote the necessary training and mechanisms so that the population can access bitcoin transactions.”



Approximately 70% of El Salvador does not have access to traditional financial services, according to the Bitcoin Law. The cryptocurrency is seen as a way to increase financial inclusion.



The proposal will need to go through El Salvador’s legislative process before being passed as law.



Bukele’s move to submit the law to Congress comes after he announced last week that&nbsp;<a href="https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html">El Salvador has struck a partnership with digital wallet company Strike,</a>&nbsp;to build the country’s modern financial infrastructure using bitcoin technology.



In April, <a href="https://www.cnbc.com/quotes/BTC.CM=">bitcoin</a> hit a record high of $64,829.14, but has since dropped by nearly half, according to CoinDesk data. It is still up over 230% over the last 12 months. That rise has been attributed to a number of factors including <a href="https://www.cnbc.com/2021/05/19/btig-keeps-50000-target-on-bitcoin-says-institutions-are-buying-during-rout.html">rising interest from institutional investors</a> and large companies such as <a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a> and <a href="https://www.cnbc.com/quotes/SQ" target="_blank" rel="noreferrer noopener">Square</a> buying bitcoin.

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El Salvador becomes first country to adopt bitcoin as legal tender after passing law

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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/2021/06/106892639-1622836826337-bit.jpg" alt="" class="wp-image-406201" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892639-1622836826337-bit.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892639-1622836826337-bit-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892639-1622836826337-bit-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A banner with the logo of bitcoin is seen during the crypto-currency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami, Florida, on June 4, 2021. Marco Bello | AFP | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin’s</a>&nbsp;price slipped again Tuesday. The reason for the move was unclear, however it may be related to concerns over security of the cryptocurrency after U.S. officials managed to recover most of the ransom paid to hackers that targeted Colonial Pipeline.



Court documents said investigators were able to access the password for one of the hackers’ bitcoin wallets. The money was recovered by a&nbsp;<a href="https://www.npr.org/2021/06/08/1004223000/how-a-new-team-of-feds-hacked-the-hackers-and-got-colonial-pipelines-bitcoin-bac" target="_blank" rel="noreferrer noopener">recently launched task force</a>&nbsp;in Washington created as part of the government’s response to a rise in cyberattacks.



The world’s largest cryptocurrency slid over 7% at 5 a.m. ET to a price of $32,952, according to Coin Metrics data. Smaller digital coins also slumped, with ether falling 7% to $2,524 and XRP losing around 6%.



In April, 2021 was&nbsp;<a href="https://www.cnbc.com/2021/04/14/bitcoin-btc-and-ether-eth-prices-rally-ahead-of-coinbase-listing.html">looking to be a banner year</a>&nbsp;for digital assets, with bitcoin having topped $60,000 for the first time ever. But a recent plunge in crypto prices has shaken confidence in the market. Bitcoin sank to nearly $30,000 last month, and is currently down almost 50% from its all-time high.



The digital currency is now up only 14% since the start of the year, though it’s still more than tripled in price from a year ago.



<h2 class="wp-block-heading" id="h-u-s-recovers-most-of-colonial-ransom">U.S. recovers most of Colonial ransom</h2>



On Monday, U.S. law enforcement officials said they had&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">seized $2.3 million in bitcoin</a>&nbsp;paid to DarkSide, the cybercriminal gang behind a crippling cyberattack on Colonial Pipeline.



According to a court document, the Federal Bureau of Investigation was able to access the “private key,” or password, for one of the hackers’ bitcoin wallets. Bitcoin has often been the currency of choice for hackers demanding ransom payments to decrypt data locked by malware known as “ransomware.”



Crypto media outlet Decrypt&nbsp;<a href="https://decrypt.co/72992/bitcoin-tumbles-9-fears-that-us-law-enforcement-hacked-network" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;there were unfounded rumors that the attackers’ bitcoin wallet had been “hacked,” an unlikely scenario.



DarkSide, which&nbsp;<a href="https://www.cnbc.com/2021/05/18/colonial-pipeline-hackers-darkside-received-90-million-in-bitcoin.html">reportedly received $90 million</a>&nbsp;in bitcoin ransom payments before shutting down, operated a so-called “ransomware as a service” business model, where hackers develop and market ransomware tools and sell them to affiliates who then carry out attacks.



According to blockchain analytics firm <a href="https://www.elliptic.co/blog/us-authorities-seize-darkside" target="_blank" rel="noreferrer noopener">Elliptic</a>, the seized funds represented the bulk of the DarkSide affiliate’s share of the ransom paid out by Colonial.



John Hultquist, vice president of analysis at Mandiant Threat Intelligence, called the move a “welcome development.”



“It has become clear that we need to use several tools to stem the tide of this serious problem, and even law enforcement agencies need to broaden their approach beyond building cases against criminals who may be beyond the grasp of the law,” said Hultquist.



“In addition to the immediate benefits of this approach, a stronger focus on disruption may disincentivize this behavior, which is growing in a vicious cycle,” he added.



<h2 class="wp-block-heading">Crypto crackdown</h2>



A number of issues are weighing on cryptocurrencies, including fears of a regulatory clampdown and tweets 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>.



Chinese authorities last month&nbsp;<a href="https://www.cnbc.com/2021/05/21/bitcoin-falls-after-china-calls-for-crackdown-on-bitcoin-mining-and-trading-behavior.html">called for a crackdown</a>&nbsp;on crypto mining and trading. Once a major player in the market, China has since moved to stamp out speculative investment in cryptocurrencies,&nbsp;<a href="https://www.cnbc.com/2017/09/04/chinese-icos-china-bans-fundraising-through-initial-coin-offerings-report-says.html">banning a fundraising method known as initial coin offerings</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/2017/09/11/bitcoin-price-falls-on-reports-that-china-is-closing-local-exchanges.html">shuttering local exchanges</a>.



Meanwhile, Elon Musk has gone from a supporter of bitcoin to seemingly falling out of love with it in a matter of months. Musk’s electric car firm stopped accepting bitcoin as a payment method last month due to&nbsp;<a href="https://www.cnbc.com/2021/05/13/why-elon-musk-is-worried-about-bitcoin-environmental-impact.html">concerns over its environmental impact</a>.



Last week, thousands of bitcoin investors descended on Miami for an event billed as the&nbsp;<a href="https://www.cnbc.com/2021/06/07/bitcoin-2021-elon-musk-jack-dorsey-winklevoss-twins-key-highlights.html">biggest bitcoin event in history</a>.



The conference had a few bizarre highlights, including El Salvador President Nayib Bukele announcing plans for the country to&nbsp;<a href="https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html">accept bitcoin as legal tender</a>.

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Bitcoin slides 7% after U.S. seizes most of Colonial Pipeline ransom

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133.jpg" alt="" class="wp-image-406173" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



MIAMI – Crypto lingo and booze flowed freely as thousands of bitcoin enthusiasts descended on South Florida this weekend.



At Bitcoin 2021, billed as the biggest bitcoin event in history, legions of faithful fans braved 90-degree days to talk all things crypto. Many of the conference attendees were bitcoin maximalists, a phrase used to describe people who believe that bitcoin, and not necessarily other cryptocurrencies, is the future of finance. Most plan to BTD (buy the dip) and HODL (hold on for dear life).



The energy was electric. A maskless, sold-out crowd of 12,000 attendees spent two days glad-handing, hugging, sending crypto from wallet to wallet, and closing business deals in between panels and speeches. The novelty of taking part in a largely indoor event, free of Covid restrictions, contributed to the atmosphere.



A standard pass to the event cost $1,499. Some guests paid for a highly coveted orange bracelet, known as the “Whale Pass,” which takes its name from a term used to describe individuals who hold large sums of bitcoin. The pass granted access to an extra day of speakers, exclusive parties, and a private area in the convention hall, replete with a free bar. On the first day of the conference, it was retailing on Eventbrite for $21,000, plus a $529 transaction fee.



The crowd look was mixed. Picture conference merch like neon-colored fanny packs, Bitcoin 2021 branded sunglasses, and t-shirts with crypto puns and hashtags. Some appeared ready for a summer rave, wearing bikinis in the media room.



However, there was also a strong contingent clad in standard Wall Street business casual, in yet another sign of growing mainstream interest in the world’s most popular cryptocurrency. “Whether they were attendees, or just in Miami for the events, it is more institutional participation than I’ve ever seen at a bitcoin conference,” Nic Carter,&nbsp;founding partner at Castle Island Ventures, told CNBC.



<h2 class="wp-block-heading" id="h-miami-lights-up-for-crypto">Miami lights up for crypto</h2>



For the thousands who didn’t get an official ticket to the event, the parties and tangential gatherings were the real draw. There were yacht parties with a DeFi (decentralized finance) theme, sumo wrestling matches, NFT art gallery openings, and cocktail hours dedicated to talking about Bitclout, a social network built on the blockchain technology that underpins most cryptocurrencies.



The after-parties took over rooftops across the city, with at least one featuring fire dancers. The Oasis, one of the biggest nightclubs in Miami, was non-stop crypto.



“There isn’t a way to quantify the level that an event like this boosts business,” said Mati Greenspan, portfolio manager and founder of Quantum Economics, who flew in from Israel Wednesday night for the event. “What might take me an hour meeting at home can be done in five or ten minutes at a conference. So every hour is worth five or ten meetings.”



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM.jpg" alt="" class="wp-image-406174" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Fire dancers entertain crypto enthusiasts at a rooftop party in Miami. Mati Greenspan</figcaption></figure>



A lot of talk centered around moving to Miami. Start-ups, venture firms, and crypto exchanges have been relocating to the city en masse – or at least opening additional offices.



Mayor Francis Suarez has portrayed himself as bitcoin-friendly – Suarez&nbsp;<a href="https://www.cnbc.com/video/2021/02/17/miami-mayor-francis-suarez-on-push-to-accept-bitcoin-attract-big-tech.html">announced in February</a>&nbsp;that Miami plans to accept tax payments in bitcoin and let employees draw their salary in the cryptocurrency, though the timing of the rollout is unclear. The city is also exploring holding bitcoin on its balance sheet.



Now, the entire city seems to be getting on board. “From waiters to Uber drivers, a bouncer at the nightclub and even a lady selling tchotchkes at the mall, most locals I met on the ground seemed to be somewhat familiar with cryptocurrencies, and many of them are HODLing,” said Greenspan, of the few days he spent in Miami.



Carter himself is considering the move. “Virtually everyone I’ve talked to is super bullish on Texas and Florida and pretty bearish on on New York, San Francisco, and Boston,” he said. “I left this thinking that I’m going to make that transition myself.”



<h2 class="wp-block-heading">‘Bitcoin fixes everything’</h2>



A common refrain from some of the biggest names on stage was that “bitcoin fixes everything,” which pretty much sums up the general sentiment at the conference.



“We say bitcoin is hope; bitcoin fixes everything,” said Saylor. “That certainly was the case with our stock.”



Dorsey also doubled down on his commitment to the cryptocurrency. “If I were not at Square or Twitter, I’d be working on bitcoin. If it needed more help than Square and Twitter, I would leave them for bitcoin,” said Dorsey.



The undertone of widespread support for bitcoin carried with it a spirit of rebellion against the existing financial system.



“We don’t need the banks anymore,” continued Dorsey. “We don’t need the financial institutions that we have today.”



Cameron Winklevoss wore a T-shirt with a picture of the Federal Reserve building with a caption reading, “Rage against the machine,” a reference to how bitcoin is not controlled by a central bank.&nbsp;



As one panel MC put it, “We are going to put the Fed out of business,” which speaks to how people at Bitcoin 2021 generally regarded the monetary system and fiat money, with bitcoin seen as the solution.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing.jpg" alt="" class="wp-image-406175" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Tyler Winklevoss and Cameron Winklevoss (L-R), creators of crypto exchange Gemini Trust Co. on stage at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida. Joe Raedle | Getty Images</figcaption></figure>



But a repudiation of the status quo doesn’t mean anarchy. In many of my conversations with attendees, the narrative was far from an advocation of societal collapse or dissolution.



“The whole point of bitcoin is that it’s a&#8230;peaceful protest against a monetary system that people want no part of,” said Carter. “I don’t think the Fed has a lot to fear from bitcoin. You don’t have to take to the streets to promote bitcoin.”



The conference drew participants from countries with high inflation or other currency troubles – places like Venezuela, Cuba, Turkey, Nigeria, Lebanon, and Iran – who perhaps best understand the use case for a cryptocurrency like bitcoin.



“There are hundreds of people in these places and you don’t have to explain bitcoin to them; they understand it intuitively,” explained Carter. “That was one of the best parts of the conference for me: meeting people who felt the real-world impact of currency collapse and seeing how they use bitcoin.”



One consistent theme of the conference was the maturity of the Lightning Network, a payments platform built on bitcoin, which enables instant transactions.



Virtually every booth at the conference was accepting Lightning transactions. Even Square and Twitter CEO Jack Dorsey completed one during his main stage talk with Alex Gladstein, of the Human Rights Foundation.



“That’s a real success story,” said Carter. “It’s taken four or five years for Lightning to be built on top of bitcoin, but it’s working now.”



<h2 class="wp-block-heading">The shadow of Elon</h2>



Elon Musk wasn’t physically in Miami but his presence was definitely felt. Right at the start of the conference, the price of bitcoin dropped following a tweet by the&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO that implied he was breaking up with the currency.



Max Keiser, a high-profile bitcoin holder,&nbsp;began his fireside chat by cursing Musk’s name, shouting, “F&#8212; Elon!” several times.



On the main stage, Dorsey took what seemed to be a veiled shot at Musk’s critique of the environmental impact of bitcoin mining, saying that it actually “incentivizes more renewable energy.”



“You just look at the economics of it and ultimately miners have to make a profit and getting cheap renewable energy maximizes their potential for profit. It’s really that simple,” continued Dorsey. “I thought I had an agreement with some notable figures out there, and that seemed to change in a matter of weeks and now it’s in a weird kind of place.”



Michael Saylor, a high-profile crypto advocate and the CEO of MicroStrategy – a company that bought bitcoin for its balance sheet last year, before both Square and Tesla – took Dorsey’s comments one step further.



“It’s the highest value use of intermittent energy. It’s the highest value use of renewable energy. It’s the highest value use of wasted or stranded energy. And it’s just the highest value use of energy, period,” said Saylor.



NFL player and bitcoin fan Russell Okung launched a billboard campaign Friday with the tagline “Stick to space, Elon,” a reference to the fact that Musk should stay in his lane, and leave crypto opining to those in the industry.



Most conference attendees said they were ignoring his comments regardless. Many said they don’t think Musk, or anyone else – not even governments – can stop bitcoin.&nbsp;One person in the bathroom line called him a clown, referring to his promotion of a new, pornographically named cryptocurrency over the weekend.

106893007-1623065955092-GettyImages-1233274133

Thousands of bitcoin believers descended on Miami to party and preach the gospel of ‘HODL’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106804344-16068395452020-12-01t161743z_1922070013_rc2gek97p5me_rtrmadp_0_usa-senate-hearing.jpeg" alt="" class="wp-image-406167" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106804344-16068395452020-12-01t161743z_1922070013_rc2gek97p5me_rtrmadp_0_usa-senate-hearing.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106804344-16068395452020-12-01t161743z_1922070013_rc2gek97p5me_rtrmadp_0_usa-senate-hearing-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106804344-16068395452020-12-01t161743z_1922070013_rc2gek97p5me_rtrmadp_0_usa-senate-hearing-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Chairman of the Federal Reserve Jerome Powell listens during a Senate Banking Committee hearing on “The Quarterly CARES Act Report to Congress” on Capitol Hill in Washington, U.S., December 1, 2020. Susan Walsh | Reuters</figcaption></figure>



The Federal Reserve is in the early stages of a campaign to ready markets for reducing its $120 billion in monthly asset purchases to stimulate the economy.



Comments by Fed officials in the past several weeks suggest the issue of tapering looks likely to be discussed as soon as the Federal Open Markets Committee meeting next week, and the Fed may be on track to begin asset reductions later this year or early next year.



At least five Fed officials have publicly commented on the likelihood of those discussions in recent weeks, including Patrick Harker, president of the of the Federal Reserve Bank of Philadelphia, Robert Kaplan of Dallas, Fed Vice Chair for bank supervision Randal Quarles and C<a href="https://www.cnbc.com/2021/06/04/feds-mester-lauds-jobs-data-but-says-its-not-enough-to-change-policy.html">leveland Fed President Loretta Mester</a>, whose comments to CNBC came after Friday’s monthly jobs report.



“As the economy continues to improve, and we see it in the data, and we get closer to our goals … we’re going to have discussions about our stance of policy overall, including our asset purchase programs and including our interest rates,” Mester said Friday.



While the discussion may take place, an announcement of a decision to actually taper would be several months later, perhaps in late summer or early fall. That announcement would then put the beginning of the asset reduction further out, perhaps by year-end or early next year. Since the Fed will taper its purchases, that is, reduce the amount it buys by some amount each month, that timeline would still see the Fed purchasing billions of dollars of assets well into 2022, though at an increasingly slower pace.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893111-1623082339717-timelinenew.png" alt="" class="wp-image-406168" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893111-1623082339717-timelinenew.png 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893111-1623082339717-timelinenew-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893111-1623082339717-timelinenew-140x80.png 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



All of that is contingent on how the economy rebounds from the pandemic. The recent pace of new job growth, averaging 541,000 payrolls over the past three months, and the recent decline in the unemployment rate look to be more or less in line with Fed expectations. Most Fed officials continue to believe that the recent spurt of inflation will prove temporary, so even big monthly gains are unlikely to speed up the plan, at least for a time.



<h2 class="wp-block-heading" id="h-avoiding-a-tantrum">Avoiding a tantrum</h2>



While the decision to taper is based on economic data, it eventually will be converted by Fed officials to calendar dates, though, as the Fed has done in the past, still linked to the data.



Behind the glacial pace of reducing asset purchases is a deliberate attempt to avoid another so-called taper tantrum, the sharp spike in bond yields in 2013 that came after Fed Chairman Ben Bernanke hinted asset purchases could wind down.



One view inside the Fed is that the taper tantrum occurred because it failed to adequately separate in the market’s mind the timelines for hiking interest rates and for reducing asset purchases. This time, the Fed is creating a long runway for tapering, making clear that rate increases only come after this process. It also has set a higher standard of economic improvement required for rate increases than it has for asset purchase reductions.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="263" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893108-1623082358297-tapertalkersnew.jpg" alt="" class="wp-image-406169" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893108-1623082358297-tapertalkersnew.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893108-1623082358297-tapertalkersnew-300x107.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893108-1623082358297-tapertalkersnew-140x50.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



Quarles late last month made that separation clear, saying: “It will become important for the FOMC to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings.” But, he added,&nbsp; “in contrast, the time for discussing a change in the federal funds rate remains far in the future.”



At the moment, fixed income markets appear to be giving the Fed leeway to follow a gradual timeline. The 10-year note yield has been anchored around 1.60 percent for nearly four months, and the 2-year note rate has hovered around 15 basis points (0.15%). Fed Funds futures do not fully price in a 25-basis point rate hike from the Fed until early 2023.



Fed officials expected volatility around any announcement that it will reduce asset purchases. And it’s clear yields could rise as a result. It’s possible markets may become more aggressive in pricing in rate hikes. The measure of success for the Fed’s current efforts will come if policymakers can move toward reducing asset purchases but see only modest changes in expectations for rate increases.



The key risk now is that the Fed, in trying to avoid a taper tantrum, maintains easy monetary policy too long, allowing inflation to become a permanent, rather than temporary, problem.

106804344-16068395452020-12-01t161743z_1922070013_rc2gek97p5me_rtrmadp_0_usa-senate-hearing

The Fed is in early stages of a campaign to prepare markets for tapering its asset purchases

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892855-1623029647380-gettyimages-1233290194-DSC_5640.jpeg" alt="" class="wp-image-406080" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892855-1623029647380-gettyimages-1233290194-DSC_5640.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892855-1623029647380-gettyimages-1233290194-DSC_5640-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892855-1623029647380-gettyimages-1233290194-DSC_5640-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Indian women wait in a queue for food in New Delhi. SOPA Images | LightRocket | Getty Images</figcaption></figure>



The World Bank has warned that critical measures need to be taken during the pandemic recovery to get women back to work and on the path to gender equality.



The pandemic has exacerbated existing gender gaps, and now more than ever, additional efforts are needed to move women forward, Caren Grown, global director of the World Bank Group, told CNBC on Friday.



“While everyone has faced the same storm, it has really differentially impacted men and women,” Grown told “<a href="https://www.cnbc.com/asia-squawk-box/">Squawk Box Asia</a>.”



For instance, though the death rate from Covid-19 has generally been higher among men, women have been more adversely impacted socially and economically, she said.



That’s due in part to women’s disproportionate representation in hard-hit industries, such as hospitality and tourism, ut also because of the additional caregiving duties they typically face.



Even before the pandemic, the World Bank estimated it could take 150 years for women to achieve gender equality with men. The health crisis has likely extended that timeline.



To help overcome those disparities, Grown said ensuring equitable access to vaccines would be critical. That includes making sure women have the time and means to make their appointments.



Beyond that, further financial and caregiving support is needed to get the hardest-hit women back on their feet and into work.



Finally, more safeguards need to be put in place against gender-based abuse, she said.



“Something that has been exposed during this pandemic is the increases in gender-based violence,” said Grown. “It was always called the shadow pandemic, but as we think about recovery we actually have to put in place stronger responses and preventative measures.”

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World Bank says critical measures are needed to return women to the workforce after the pandemic

GoTo: The multibillion-dollar superapp behind Indonesia’s most valuable merger | CNBC Make It

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892780-1622879513809-gettyimages-1233264637-AFP_9BD47B.jpeg" alt="" class="wp-image-406028" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892780-1622879513809-gettyimages-1233264637-AFP_9BD47B.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892780-1622879513809-gettyimages-1233264637-AFP_9BD47B-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892780-1622879513809-gettyimages-1233264637-AFP_9BD47B-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Britain’s Chancellor of the Exchequer Rishi Sunak (center), U.S. Treasury Secretary Janet Yellen (right) attend the first day of the G-7 Finance Ministers Meeting at Lancaster House in London on June 4, 2021. Stefam Rousseau | AFP | Getty Images</figcaption></figure>



Finance ministers from the Group of Seven (G-7) advanced nations agreed on Saturday to back a&nbsp;<a href="https://www.cnbc.com/2021/06/05/g-7-nations-reach-historic-deal-on-global-tax-reform.html">minimum global corporate tax rate of at least 15%</a>.



U.S. Treasury Secretary&nbsp;<a href="https://www.cnbc.com/janet-yellen/">Janet Yellen</a>&nbsp;said such a global minimum rate would end “the race-to-the-bottom in corporate taxation” and “ensure fairness for the middle class and working people in the U.S. and around the world.”



Governments in major economies have for years faced the challenge of taxing large companies, such as tech giants&nbsp;<a href="https://www.cnbc.com/quotes/FB" target="_blank" rel="noreferrer noopener">Facebook</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/quotes/GOOGL" target="_blank" rel="noreferrer noopener">Google</a>, that operate across many jurisdictions.



A common practice among many multinational companies is to declare income — such as those from intangible sources like software and patents — in low-tax jurisdictions regardless of where the sales are made. That allows the companies to avoid paying higher taxes in their home countries.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="602" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892876-1623039392709-Corporate_tax_map.jpg" alt="" class="wp-image-406029" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892876-1623039392709-Corporate_tax_map.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892876-1623039392709-Corporate_tax_map-300x244.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892876-1623039392709-Corporate_tax_map-98x80.jpg 98w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



The G-7 agreement feeds into a broader global effort to update tax rules around the world and will be discussed further at a Group of Twenty (G-20) meeting next month.



The Organisation for Economic Co-operation and Development or OECD, an intergovernmental group, has been facilitating negotiations on global taxation over the last few years. It expected a global corporate minimum tax rate would make up the bulk of the $50 billion to $80 billion in additional taxes that companies will end up paying,&nbsp;<a href="https://www.reuters.com/business/finance/what-is-global-minimum-tax-what-will-it-mean-2021-06-05/" target="_blank" rel="noreferrer noopener">reported Reuters.</a>



<h2 class="wp-block-heading" id="h-highest-and-lowest-corporate-tax-rates">Highest and lowest corporate tax rates</h2>



Generally, countries in Africa and South America impose higher corporate tax rates compared with many in Europe and Asia, according to data by Washington-based think tank Tax Foundation, the OECD and consultancy KPMG.



Many low-tax jurisdictions are small nations such as Bulgaria and Liechtenstein, the data showed.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="638" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892878-1623039482847-Highest_corporate_tax_list.png" alt="" class="wp-image-406030" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892878-1623039482847-Highest_corporate_tax_list.png 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892878-1623039482847-Highest_corporate_tax_list-300x259.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892878-1623039482847-Highest_corporate_tax_list-93x80.png 93w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



Around 15 countries do not impose a general corporate income tax, the data showed. That includes island nations such as Bermuda, Cayman Islands and British Virgin Islands, which are widely known as offshore “tax havens” — jurisdictions where large companies shift profits to in order to pay less taxes.



Those territories benefit from jobs created to serve multinational companies, such as legal and accounting services. Tax havens also make money from fees paid by large companies to create subsidiaries there.



Daniel Bunn, vice president for global projects at Tax Foundation, said low-tax jurisdictions facilitate investments in other countries with higher taxes.



<a href="https://www.cnbc.com/2021/06/07/charts-show-highest-and-lowest-corporate-tax-rates-around-the-world.html#"></a>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="617" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892879-1623039565344-Lowest_corporate_tax_list.png" alt="" class="wp-image-406031" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892879-1623039565344-Lowest_corporate_tax_list.png 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892879-1623039565344-Lowest_corporate_tax_list-300x250.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892879-1623039565344-Lowest_corporate_tax_list-96x80.png 96w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



So, applying a global minimum tax rate would increase the costs of those investments and could result in a “little bit of economic blowback,” he told CNBC’s “<a href="https://www.cnbc.com/asia-squawk-box/">Squawk Box Asia</a>” on Monday.



Bunn said many questions remain on how that minimum tax rate will be applied and which parts of corporate income to tax. He added that tax havens may not go away entirely.



“It’s unclear where things will settle in a few years,” he said. “There may still be opportunities for evasion or avoidance or different countries changing the rules in ways that are preferential to their jurisdictions.”

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