HRF’s Weekly Financial Freedom Report #2

From Singapore pioneering the use of central bank digital currencies to staggering currency debasement in Cuba and Egypt, it is evident that governments worldwide continue to abuse their digital power. Despite all this, it is inspiring to see people pushing back with open-source code and taking their financial freedom into their own hands.

Let’s dive right into highlights from this week!

IMF Policy | CBDCs

In Singapore on Nov. 15, IMF Managing Director Kristalina Georgieva gave a major policy speech called “The Digital Finance Voyage,” arguing that central bank digital currencies could replace cash. “This is not the time to turn back,” she said, enthusiastically pushing public and private sector actors to continue to innovate with CBDCs. She also announced the launch of the IMF’s CBDC Handbook, a how-to guide for aspiring governments.

Singapore and South Korea | CBDC

Singapore’s central bank, the Monetary Authority of Singapore (MAS), is set to pilot the use of wholesale central bank digital currencies in 2024 to support domestic and commercial payments. This move is in line with the local regime’s intense interest in surveillance and control. Separately, the South Korean government announced that 100,000 citizens will experiment with its CBDC pilot next year, using the state-run tokens to buy goods and services.

Cuba | Inflation

Independent media outlet El Toque reported in its daily tracker that the Cuban peso exchange rate had collapsed past 265 per dollar on the streets of Havana. The state is Cuba’s largest employer, and state employees earn pesos. Anyone earning and saving in pesos has lost more than 90% of their purchasing power since the island’s currency reform in 2021. This has sparked a new wave of Bitcoin adoption. Last year, El Toque received a grant from HRF to help it more closely monitor the adoption of cryptocurrency in Cuba.

Nigeria | Energy

The Nigerian startup and Green Africa Mining Alliance member Trojan Mining announced the construction of a 500KW Bitcoin hydromine, complete with locally built mining containers. A 1MW facility is also in the works. In June, new federal policy in Nigeria made it so that states can independently manage their electricity infrastructure, opening the door for many new projects like this, especially in regions with abundant energy currently going untapped.

Bangladesh | Inflation & Wages

An estimated 25,000 Bangladeshi garment workers protested against a government-offered pay raise of 56.25%, shuttering more than 100 factories. The workers claim the raise —which doubles monthly wages — does not come close to keeping up with rising costs. Last month, food inflation hit more than 12% in this nation of 173 million people.

Egypt | Monetary Policy

The Egyptian dictatorship is now seeking an IMF bailout of $5 billion as it continues to struggle through an economic crisis. As part of the condition for the loan, the regime of Abdel Fattah El-Sisi has imposed a severe currency devaluation, crushing the purchasing power of average Egyptians, who can afford less and less of basic items like bread as the weeks and months go by.

OCEAN | Bitcoin Mining

Just one day after DEMAND launched the world’s first Stratum V2 mining pool, Jack Dorsey and Luke Dashjr announced a new decentralized, non-custodial mining pool called OCEAN. At a press conference in South Carolina, Dorsey and others unveiled the new operation, which is meant to reduce the censorship risk posed by the dominant mining pools of today. OCEAN clients get paid out directly from the Bitcoin block reward, and get to see the block templates before working on them.

Wallet of Satoshi | Mobile Wallets

Amid regulatory uncertainty sparked by Binance head CZ stepping down, Bitcoin wallet provider Wallet of Satoshi removed its app from U.S. Apple and Google stores, stating it “will not serve U.S. customers going forward.” While the specific reason for this decision was not disclosed, the company said that US customers’ funds were safe and can still be transferred to other wallets. This episode is another reminder of the risks that custodial wallets pose and another reminder that self-custodying bitcoin is a critical step to protecting financial freedom.

Stable Channels | Bitcoin Development

The first “Stable Channel” has been broadcasted onto the Bitcoin mainnet. Stable Channels enable bitcoin users to utilize the Lightning Network to get dollar price exposure in a self-custodial way that doesn’t rely on or connect to the existing banking system. It is a reality that people in collapsing economies want dollars, not pesos or lira. But centralized stablecoins pose major risks. Innovations like “Stable Channels” could potentially offer a much more trustless way for people anywhere on earth to get dollar exposure.

Hub21 | Bitcoin Education

Belgrade saw the launch of Hub21, a nonprofit community, research, and Bitcoin education center. Nestled within Serbia’s burgeoning IT landscape, Hub21 will provide education and training for the general public, as well as conducting research, and facilitating networking opportunities within the Bitcoin design and development ecosystem.

Censorship | Bitcoin Mining

Miningpool-observer is a project aimed at “detecting when Bitcoin mining pools are not mining transactions they could have been mining.” Last week, it uncovered six transactions spending from OFAC-sanctioned addresses that were missing from blocks mined by different pools. One pool in particular, F2Pool, intentionally left out four of them. It is important to monitor mining pools to help miners make informed decisions about which pools to use. HRF is proud to support 0xB10C, the author of this initiative, who received a grant from our Bitcoin Development Fund earlier this year.

WalletScrutiny | Open Source Funding

Spiral announced a grant renewal for WalletScrutiny, calling it “one of the most important projects in Bitcoin. Full stop.” WalletScrutiny (an HRF grantee) lets Bitcoin users verify whether their wallet is open-source and secure. Anyone can go to its website and search for a wallet and see if, for example, the wallet is open-source, self-custodial, or independently reproducible. Each wallet gets a score based on how many critical tests it is able to pass.

Nostr | Decentralized Social Media

Last week, Nostr (a decentralized and open social network protocol) saw a significant influx of new Thai users after a video on the platform reached nearly one million views. Thailand has recently been the top country for downloads of Damus, a popular Nostr client, according to company employees. Nostr usage remains on the rise in authoritarian regimes like Thailand and China. Separately, the ability to run decentralized file sharing over Nostr through torrents was also launched, giving the protocol another powerful use case.

The Monetary Gates Are Open                                                                               

By Lyn Alden, founder of Lyn Alden Investment Strategy

Until now, governments have had two primary methods to control how money flows into and out of a country: port of entry (e.g. airport) or through an international financial service provider (e.g. Western Union). In both instances, states have maintained tight monetary control over limits and transaction types, effectively locking their citizens into their jurisdictions. In this in-depth piece, Lyn Alden explores how the inventions of Bitcoin and dollar stablecoins are beginning to circumvent this problem. Everything Lyn writes is a recommended read, especially her new book, Broken Money. HRF is very grateful to be mentioned in the book, and we are also grateful to have received a donation from Lyn from the first 1,000 copies sold.

On Stolen Bitcoin Keys, Privacy, Self Custody, and Seed Phrase Tips   

By NVK, co-founder of Coinkite and builder of Bitcoin security hardware

For newcomers to Bitcoin, it can be intimidating to self-custody Bitcoin… yet it is a necessary step to achieving economic freedom. In this 15-minute video, NVK discusses with Natalie Brunell tips on self-custodying Bitcoin and how best to protect seed phrases. This is a great primer for anyone looking to take Bitcoin security more seriously.

Thank you for reading the Financial Freedom Report. I’d love to hear your thoughts on today’s newsletter so feel free to reply to this email. And if you enjoyed it, please consider sharing with your colleagues, friends, and loved ones.

Until next time,

Ayelen Osorio

Financial Freedom Specialist

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