News & numbers
“It would appear they don’t love crypto. I suppose crypto is fundamentally aimed at reducing power of centralised government and they don’t like that, is my guess.” Elon Musk on why China might have banned cryptocurrencies
China says no to cryptocurrency
For years a staple of the nation’s economy, China has finally decided to crack down on cryptocurrencies. In September, the country’s central bank announced a ban on all transactions involving cryptocurrencies, effectively outlawing digital tokens like Bitcoin. “Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China explained, adding it “seriously endangers the safety of people’s assets”. The news rocked crypto markets across continents, with the price of Bitcoin crashing by over $2,000 (£1,460) after the announcement.
Analysts gave a number of reasons for China’s move, from an attempt to wean investors off volatile investing to a way of fighting money laundering. What was in no doubt was the chaos the decision caused across the country. Some Bitcoin miners rushed overseas, while expensive mining equipment became scrap metal overnight. China’s erstwhile dominance in the industry became clear back in April, when a flood in a cave used for cryptocurrency mining in the remote Xinjiang region shut off around one-third of the world’s capacity at a stroke.
Facebook under pressure as whistleblower sweeps Congress
From privacy concerns to electoral interference, the world’s biggest social media company has recently struggled to preserve its image. In a blockbuster session on Capitol Hill, Frances Haugen recently did her part to squeeze Facebook even further. An ex-employee at Facebook (now also known as Meta), the whistleblower made a number of startling claims about the Silicon Valley giant, including that Facebook’s own studies show that it amplifies hate and misinformation.
“The thing I saw at Facebook over and over again was there were conflicts of interest between what was good for the public and
what was good for Facebook,” Haugen explained. “And Facebook, over and over again, chose to optimise for its own interests, like making more money.” In a rare sign of political unity, Republicans and Democrats across Congress expressed their interest in fully regulating Mark Zuckerberg’s enterprise. Across the Atlantic, meanwhile, regulators in the UK have been showing what that could mean in practice. In October, the Competition and Markets Authority fined Facebook $70m for “consciously” refusing to report relevant information during an investigation of the tech giant’s acquisition of online database Giphy.
UK industry struggles with energy crisis
UK politicians and journalists love reminding us about the ‘bad old days’ of the 1970s: a time of rampant energy shortages and stagnating productivity. The hairstyles and trouser widths may have changed, but there are signs that the country could be returning to that benighted decade in at least one respect: power cuts.
After gas prices increased dramatically – rates increased by 70% in September alone – several UK energy suppliers collapsed amid a government-mandated inability to pass price rises onto consumers. That soon
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left a gap in the market, a nightmare for industry up and down the country. Manufacturers from steel and glass to cement were forced to cut production. In part, the problems were caused by a lack of supply from Russia, with some analysts accusing President Putin of deliberately making his European neighbours suffer. Russia, for its part, denied any involvement. “We are not using any weapons,” emphasised the Russian leader, describing any claims to the contrary as “politically motivated blather”.
Asian businesses ride post-Covid digitalisation wave
One of the few glimmers of light over the past 18 months has been the way businesses have been forced by lockdowns and changing consumer behaviour to embrace digitalisation. And though they’ve historically been slower than their Western cousins, there are signs companies in Asia are moving the same way. That’s the headline of Cisco’s 2020 Asia Pacific SMB Digital Maturity Study, which found that nearly 70% of small and medium-sized businesses are boosting digitalisation in the wake of the pandemic. It claims these efforts could add S$3.1trn (£1.6bn) to the region’s economy by 2024. All the same, it’s clear that some countries are closer to a digital tomorrow than others. While companies in Japan and Singapore maintain leading positions, places like Malaysia and the Philippines are further behind. And there’s still much to do – 17% of respondents grumbled about a lack of skilled workers, for example.
Etihad raises over $1bn in ESG loan – while CFOs struggle to put sustainability on the agenda
Social responsibility has been a watchword in C-Suites for a while – but it’s only recently that CFOs seem to finally be putting their fine words into action. A striking example came in October when Etihad, the UAE’s national carrier, raised $1.2bn in the first sustainability-linked loan tied to ESG targets in global aviation. With terms linked to multiple KPIs – especially around CO2
emissions – results
are expected to be assessed independently. “Our goals will have a real-world impact, and to underscore our accountability, we have committed to penalties and incentives of up to $5.5m linked to our progress against key performance indicators,” explained Adam Boukadida, CFO at Etihad Aviation Group. Not that every CFO seems willing to put the future of the planet at the top of their to-do lists. According to a recent survey by PwC, just 21% place enhancing ESG reporting on their agendas, compared with 47% who valued turning the finance function into a strategic business partner.
Finance Director Europe /
www.ns-businesshub.com
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