HRF’s Weekly Financial Freedom Report #56

Nicaragua | Financial Reforms Risk Enshrining Repression Into Law

Nicaraguan dictator Daniel Ortega has proposed financial reforms, granting the nation’s central bank more power while placing private financial institutions under greater state control. The law would restructure how the Central Bank of Nicaragua (BCN) and the Superintendency of Banks and Other Financial Institutions (SIBOIF) operate, making them overseen by a shared board of directors chaired by current BCN president Ovidio Reyes. This proposal would empower officials with access to citizens’ and companies’ private financial data and increase their ability to monitor cross-border transactions to identify those moving funds out of the country. It further stipulates the ability to dismiss financial executives, directors, and auditors without cause and deploy law enforcement against non-compliant individuals. These measures risk enshrining financial repression into law, leaving citizens subject to financial monitoring and control.

China | Regime Monitoring and Censoring Economists 

The CCP is tightening control over economic discourse, targeting economists with views diverging from state narratives. This follows a directive from the Securities Association of China (SAC), which urged chief economists at brokerages to align their public statements with government policies and focus on “bolstering” investor confidence. Companies have been instructed to take strict action against “inappropriate commentaries or behaviors,” including termination if it results in “major negative impacts.” This move aims to consolidate the state’s economic messaging and muzzle independent views to ensure a single narrative that aligns with the CCP’s agenda.

Iran | Shutters Onramps to Digital Asset Exchanges

The Iranian government is shutting down the onramps to digital asset exchanges, confining citizens in the nation’s collapsing currency. This comes after the Iranian rial lost 37% of its value against the US dollar in 2024, prompting many Iranians to turn to digital assets like Bitcoin. Before this recent shutdown, Iran froze the bank accounts of digital asset exchanges to prevent capital flight. The regime also suspended payment processing services under the pretense of money laundering. For Iranians enduring severe inflation, financial repression, and an isolated economy, Bitcoin represents one of the few remaining paths to financial freedom — a path the regime is now working to block.

Sudan | Replaces Banknotes Amid Civil War

Sudan is replacing its old banknotes with new 1,000- and 500-pound notes through a currency replacement program. Citizens are urged to deposit old notes at banks for new ones. However, the ongoing conflict between the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF) is complicating matters. In RSF-held areas, the new currency has been declared illegal. This has left locals unable to exchange their old notes and facing the risk of losing their savings. Meanwhile, withdrawal limits, high fees, and inadequate banking access hinder citizens from exchanging their old notes in SAF-controlled regions. This currency replacement program is exacerbating financial exclusion and exposing the perils of centralized currency in conflict zones.

Russia | War Expenditures Driving Inflation 

Russia’s escalating war spending is fueling inflation and deepening financial hardships for its citizens. Housing costs have surged 30% since Vladimir Putin’s invasion of Ukraine, and mortgage rates have followed, making homeownership increasingly unattainable for many. Meanwhile, a weakening ruble is quickly eroding family savings across the country. These disparities reveal the state’s failure to balance priorities, leaving Russians at the mercy of state policies and a deteriorating economy as the regime prioritizes its geopolitical offense. Citizens who never had a democratic choice to go to war are forced to pay the consequences.

Cambodia | Approves Stablecoins While Bitcoin Remains Banned

The National Bank of Cambodia now permits financial institutions to offer services using “qualifying” stablecoins (a digital currency pegged to a fiat currency) despite maintaining a nationwide ban on Bitcoin. This directive seeks to better regulate digital asset operations, with stablecoins being a focal point, likely due to their centralized nature and easier oversight. This comes after Cambodia’s government recently blocked 16 digital asset exchanges. Concerns over the regime’s ability to monitor and control stablecoins are amplified by cases like Tether previously (USDT) freezing accounts in the country. Additionally, by permitting stablecoins over Bitcoin, these regulations may serve to protect the Bakong, Cambodia’s central bank digital currency (CBDC), from greater digital currency competition, particularly in domestic payments.