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How Portugal became Europe’s accidental ‘bitcoin heaven’

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Portugal has long sought foreign cash by giving tax breaks and special visas to foreign investors and digital nomads
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As governments slowly shackle the crypto industry with regulations and obligations, Portugal is increasingly isolated in Europe — a place with few rules that investors describe as a crypto paradise.

“You don’t need to do anything else because you already have a perfect system, with zero percent tax on bitcoin,” said Didi Taihuttu, a prominent crypto enthusiast who shifted his family to Portugal from the Netherlands. 

“For bitcoiners, it’s heaven,” he added.

Financial authorities across the globe are grappling with fundamental questions about cryptocurrencies.

Firstly, are they currencies or assets? If they are assets, how do you categorise and tax them? 

Right now, Portugal is one of the last countries in Europe to regard them as currencies from a tax point of view, meaning profits from trading are not taxed.

The finance ministry told AFP it was reviewing the situation and wanted a common European framework, but pressure is building for quick action. 

Mariana Mortagua, a far-left MP, called recently for urgent regulation and summed up the situation bluntly: “Portugal has become a tax haven.”

Even those in the crypto industry accept that things will have to change.

“It’s hard to justify other financial assets being taxed at around 28 percent but not cryptocurrencies,” said Pedro Borges of Criptoloja, the first crypto exchange registered in Portugal.

– ‘Legal vacuum’ –

Portugal has long sought foreign cash by giving tax breaks and special visas to foreign investors and so-called digital nomads — those who work online without the need for a fixed business location.

And the tax regime is not the only appeal — beaches, climate and cuisine all figure, particularly for people from northern Europe.

“Portugal has the sun, amazing food and amazing people,” said Taihuttu, who has set up in the Algarve in the country’s heavily touristed south. 

“Portugal can become one of the best countries in Europe for living, for investing.”

But while the lifestyle is likely to remain unchanged, the same cannot be said of the tax regime.

One London-based tax lawyer, who asked to remain anonymous, said he would not advise his clients to put their money into Portugal despite its “very lenient” tax system.

“It’s not a long-term strategy of the government to attract companies in the sector, rather it is a legal vacuum,” he said.

“I bet that in 10 years, the City (of London) will be more lenient than Portugal.”

Britain is one of many countries attempting to market itself as a “crypto hub”.

– Bubble warning –

If internal pressures don’t force the Portuguese government’s hand, then intervention could come from outside.

Fabio Panetta of the European Central Bank sounded the alarm on crypto late last month when he said the ecosystem showed “strikingly similar dynamics” to the sub-prime mortgage bubble that helped tank the world economy in 2007.

Crypto-assets now have a far higher market capitalisation than the $1.3 trillion of bad loans that sparked the global financial crisis.

“We must not repeat the same mistakes by waiting for the bubble to burst,” he said, arguing for strong regulation.

He accused “crypto evangelists” of promising “heaven on Earth” while hawking a glorified Ponzi scheme — because crypto-assets are generally not backed by any streams of revenue, they rely on money from new investors to keep prices high.

If new investors dry up, the asset price tanks.

Those already in the market need to attract new money, which explains high-profile advertising at the Super Bowl, celebrity endorsements and armies of boosters on social media.

Taihuttu’s Instagram account plays like a scrolling advertisement for a luxury lifestyle of beaches, skiing, travel and adventure — all apparently funded by crypto.

Like other crypto entrepreneurs he has dazzling plans — after pushing his “crypto family” he is now proposing a “crypto village” somewhere in Portugal, selling plots of land with proof of ownership stored on blockchains.

To him, at least, the country should welcome these ideas with open arms.

“Portugal needs more jobs and economic growth,” he said. “So why stop the evolution of technology and money?”

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Australian KFC patrons clucking mad over lettuce-cabbage switch

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Australians are up in arms about local KFC outlets' decision to use a cabbage mix on some menu items due to a lettuce shortage
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Fried chicken chain KFC said Tuesday that high lettuce prices in Australia have forced it to switch to a cabbage mix in burgers and other products, prompting customers to complain the result is less than “finger lickin’ good”.

The local price of the verdant leaf has soared by as much as 300 percent in recent months, forcing the fast-food chain to tweak the Colonel’s recipe in some stores.

“We’re currently experiencing a lettuce shortage. So, we’re using a lettuce and cabbage blend on all products containing lettuce until further notice,” the company told customers.

The company blamed widespread flooding in the country’s east for the problem.

But supply chain expert Flavio Macau of Edith Cowan University said Russia’s invasion of Ukraine was also a factor, pushing up diesel and fertiliser prices.

A single head of iceberg lettuce in Sydney or Melbourne that once sold for about $2 now goes for close to $8.

The company told customers: “If that’s not your bag, simply click ‘customise’ on your chosen product and remove lettuce from the recipe :)”

The change was certainly not the “bag” of some social media users.

“The fact that you are replacing lettuce with cabbage makes me rethink my whole meal at KFC. There’s 4 or 5 other things I would eat before cabbage Its such a weird choice,” said one disgruntled tweeter.

“Feels like a sign of the apocalypse,” said another.

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Asian markets mixed as rate hike woes offset China tech hopes

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Traders were cheered by reports that China was close to ending a crackdown on ride-hailing app Didi, lifting hopes of a similar move for the rest of the tech sector
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Asian markets struggled Tuesday on long-running worries over surging inflation and rising interest rates, which overshadowed hopes that China would ease off its regulatory drive against the country’s beleaguered tech giants.

A spike in US Treasury yields took the wind out of the sales for Wall Street, with focus now on the release of inflation data from the United States and China at the end of the week.

Analysts are tipping the Federal Reserve to lift borrowing costs by half a point at its next three meetings as officials try to get a grip on runaway prices.

But that is causing discomfort on trading floors as investors fret over the impact on economic growth and firms’ bottom lines.

“Inflation concerns are not going anywhere fast,” Fiona Cincotta, at City Index, said. “Rising crude oil prices and a strong labour report have lifted bets that the Fed may need to act aggressively to rein in inflation.”

And SPI Asset Management’s Stephen Innes added: “Investors are hyper-focused on inflation, economic growth, and future Fed policy.

“Most assume the worst and think a financial tsunami will hit the US and global markets thanks to the quorum of US-based bank CEOs that have given the gloomy growth narrative their imprimatur. Anything less than that outcome is going to surprise a lot of folks.”

Equity markets were mixed in early trade.

Tokyo rose, helped by a softening of the yen to a two-year low owing to expectations the Bank of Japan will not tighten monetary policy just as US rates climb.

Manila and Jakarta also edged up but there were losses in Sydney, Seoul, Singapore, Wellington and Taipei.

Hong Kong dipped and Shanghai was flat, even as heavyweights Alibaba and JD.com led gains among tech firms following a report that China was close to ending a painful crackdown on ride-hailing app Didi Global and restore its main apps this week. Didi’s US-listed notes soared more than 20 percent.

The Wall Street Journal added that probes into two other firms — Full Truck Alliance and recruitment platform Kanzhun — fanning optimism for the sector’s outlook after a long period of hefty selling pressure.

“This was seen as a signal that the regulatory crackdown on Chinese tech firms was starting to end… as China focuses on stabilising the economy following Covid restrictions,” said National Australia Bank’s Tapas Strickland.

Markets have seen some levelling out in recent weeks as the easing of lockdown measures in China helps to offset some of the worries about higher rates and the impact of the Ukraine war.

But market-watcher Louis Navellier warned there was still plenty more volatility to come.

“If history repeats, we could be down tomorrow, then up on Wednesday, then down on Thursday, and possibly up on Friday,” he said in a commentary. “So just get used to these up-down, up-down oscillations because they are going to continue.

“I want to remind investors to not get too excited when the market rallies because it is going to continue to oscillate. There is just too much uncertainty out there.”

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: UP 0.4 percent at 28,031.15 (break)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 21,609.25

Shanghai – Composite: FLAT at 3,237.14

Brent North Sea crude: UP 0.6 percent at $120.28 per barrel

West Texas Intermediate: UP 0.7 percent at $119.29 per barrel

Euro/dollar: DOWN at $1.0675 from $1.0699 

Pound/dollar: DOWN at $1.2500 from $1.2528

Euro/pound: UP at 85.42 pence from 85.37 pence

Dollar/yen: UP at 132.60 yen from 131.88 yen

New York – Dow: UP 0.1 percent to 32,915.78 (close)

London – FTSE 100: UP 1.0 percent at 7,608.22 (close)

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Apple unveils message recall, other ‘wish list’ features

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Apple CEO Tim Cook poses for a portrait at the Apple Park campus in California
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Apple opened Monday its first in-person developers conference since the onset of the pandemic with chips, maps and a way to delete precipitously sent messages, but was mum on any virtual reality offerings.

The tech giant touted new features and capabilities being built into the operating systems running iPhone, Apple Watch and more, along with a speedy new MacBook Air computer driven by a second generation of its custom chip.

Apple chief Tim Cook and his team showed off coming innovations during a keynote presentation at its first developers conference to be held at its campus in the Silicon Valley city of Cupertino — and the first in-person version of the gathering since Covid-19 struck.

“It’s so good to see you all,” Cook said from a stage set up on a lawn next to Apple’s ring-shaped headquarters, as an audience of several thousand developers cheered in the morning sunshine.

No updates, however, were forthcoming on a rumored virtual reality operating system or hardware.

Still, developers will get to meet with Apple engineers during the weeklong conference, and even work in a new building with soundproof rooms to let them discuss ideas without being overheard.

Aside from new MacBook models, the event was a deep dive into coming new generations of operating systems for Apple’s line-up of offerings.

Apple will start letting people delete and edit messages after they have been sent as part of the latest update to its operating software, as well as customizable options for the iPhone main screen.

Users of its digital wallet should soon also be able to pay for purchases in installments.

Relying increasingly on custom made chips has enabled Apple to make its devices and software work more seamlessly together, and catch up a bit to features offered by rivals such as Google Maps and even Microsoft Xbox video game platform for Windows-powered computers.

Creative Strategies analyst Carolina Milanesi saw it as Apple filling “users’ wish-list,” adding capabilities to make its apps, services or hardware the natural option in an increasingly competitive market.

“They are listening to what the users are saying and they’re making changes,” Milanesi said.

As increased dependence on computers and the internet caused by the pandemic shows no sign of abating, and by better tuning hardware and software for convenience promises to keep people in Apple’s money-making ecosystem, the analyst added.

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