DUBAI: The chief executive of Qatar Investment Authority said on Tuesday that the sovereign wealth fund is not interested in crypto investments but it is exploring opportunities in blockchain.
Mansoor bin Ebrahim Al-Mahmoud was speaking at the Qatar Economic Forum organized by Bloomberg.
The $300 billion sovereign wealth fund owns stakes in Credit Suisse and Volkswagen AG as part of its European portfolio.
Russian exemption
On the other hand, Russian lawmakers approved a draft law that would potentially exempt issuers of digital assets and cryptocurrencies from value-added tax.
Russia has long voiced skepticism of cryptocurrencies and other digital assets, with the central bank citing concerns over financial stability.
But in February the regulator gave blockchain platform Atomyze Russia the first license to exchange digital assets. A license for dominant lender Sberbank soon followed.
Unprecedented Western sanctions have hit the heart of Russia’s financial system over events in Ukraine and lawmakers have scrabbled to bring in new legislation to soften the blow.
The draft law, approved by State Duma members in the second and third readings on Tuesday, envisages exemptions on value-added tax for issuers of digital assets and information systems operators involved in their issue.
It also establishes tax rates on income earned from the sale of digital assets.
The current rate on transactions is 20 percent, the same as for standard assets. Under the new law, the tax would be 13 percent for Russian companies and 15 percent for foreign ones.
The draft must still be reviewed by the upper house and signed by President Vladimir Putin to become law.
Bitcoin miners
Bitcoin miners have been forced to tap into their cryptocurrency stashes as a plunge in prices, rising energy costs and increased competition bite into profitability.
The number of coins miners are sending to crypto exchanges has been steadily climbing since June 7, researchers at MacroHive noted, in a sign that “miners have been increasingly liquidating their coins on exchanges.”
Several publicly listed bitcoin miners collectively sold more than 100 percent of their entire output in May as the value of bitcoin tumbled 45 percent, an analysis by Arcane Research found.
“The plummeting profitability of mining forced these miners to increase their selling rate to more than 100 percent of their output in May. The conditions have worsened in June, meaning they are likely selling even more,” said Arcane analyst Jaran Mellerud.
The crypto mining space rapidly expanded in 2021 as bitcoin more than quadrupled in value, but this growth has further pressured margins as the process is designed to grow more difficult as the number of miners increases.
“Over the past six months, hash rate and mining difficulty have increased while the price of bitcoin has dropped. These are both negatives for existing miners as both work to compress margins,” said Joe Burnett, analyst at bitcoin mining firm Blockware Solutions.
High energy prices are also hitting miners, which by some estimates use more electricity than the Philippines, according to the Cambridge Bitcoin Electricity Consumption Index.
“If you’re not at a very low-cost electricity area at this point, you’ve got to shut down,” noted Chris Brendler, senior research analyst at D.A. Davidson.
Daily trading
Bitcoin, the leading cryptocurrency internationally, traded lower on Tuesday, falling by 1.77 percent to $20,811.95 as of 9:15 a.m. Riyadh time.
Ethereum, the second most traded cryptocurrency, was priced at $1,192.89 falling by 1.73 percent, according to data from CoinDesk.