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Spain eyes crackdown on video game ‘loot boxes’

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European consumer groups want tighter regulation of the extremely lucrative video games industry
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Spain’s government will within days present a draft bill to regulate video game “loot boxes” for which users must pay, a minister said Friday, warning of the addiction risks for youngsters. 

An increasingly common feature in many video games, “loot boxes” are caches of virtual weapons and equipment which a player can buy to increase their prowess or status within the game.

But not all boxes contain useful tools and gamers can only see what’s inside after paying, prompting widespread criticism for encouraging behaviour similar to that associated with gambling.

“We have drawn up a very specific law which we will present in the coming days” that will regulate the sale of such content, Spain’s Consumer Affairs Minister Alberto Garzon told Radiocable. 

“It is like gambling… because it involves compulsive consumption behaviour which provokes a series of issues for players, from stress to financial bankruptcy,” he told the independent radio station.

“At the end of the day, these are sums which pile up and can lead to gambling addiction,” Garzon said. 

Such features were aimed above all “at the under-18 age group, where in 2021, up to 30 percent admitted they had paid significant amounts of money to obtain such rewards” within a game, he said, citing health ministry statistics. 

The age ratings for such games “don’t take into account the danger posed by this feature, so parents could buy a game for a 13-year-old, for example, without being aware it includes an element which, in real life, could not be bought by anyone under 18,” he explained. 

– ‘Predatory’ –

In April, PEGI, the European body that issues age ratings for video games, introduced a labelling change that requires gaming companies to say if a game includes “paid random items” — a form of optional in-game purchases.

Many other countries have also been struggling with the controversial question of “loot boxes” although few have taken steps to regulate them. 

On Tuesday, 20 European consumer groups threw their weight behind a Norwegian Consumer Council (NCC) report on loot boxes that described them as “exploitative and predatory”, with the groups demanding better regulation of the video game industry. 

“The sale and presentation of loot boxes often involve exploiting consumers through predatory mechanisms, fostering addiction, targeting vulnerable consumer groups and more,” the NCC’s head of digital policy Finn Myrstad said in a statement. 

Gaming companies often used “highly problematic practises to increase their own revenue” through features that “manipulate consumers to spend large sums of money through aggressive marketing, exploitation of cognitive biases, and misleading probabilities”, the report found. 

In Europe, only Belgium and the Netherlands have banned loot boxes after directly associating them with gambling. 

In a statement issued in response to the government’s move, the Spanish Association of Video Games (AEVI) said it “rejects any association with gambling” and insisted on the sector’s right to “self-regulation”. 

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Central African Republic dives into crypto with the Sango

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Crypto fan: President Faustin-Archange Touadera
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Undeterred by the turmoil hitting crypto, the Central African Republic (CAR) — one of the poorest and most troubled countries in the world — has unveiled plans to launch its own digital currency.

President Faustin Archange Touadera, in an “online event” on Sunday, announced CAR would create the Sango Coin and a zero-taxation “crypto-hub”, the first in Africa.

The currency is named after Sango, which with French is one of the two official languages in the landlocked country, rated the world’s second poorest nation under the UN’s Human Development Index.

Through a platform called Crypto Island, the Sango will become “the catalyst for tokenising (CAR’s) vast natural resources,” Touadera declared, providing no timeline or other details.

He hailed Sango and Crypto Island as “a new digital system fed by blockchain,” the internet-based ledger that underpins crypto currencies.

“Sango Coin will give the whole world direct access to our resources,” attracting investors and “getting the engines of the economy going,” he enthused.

On April 27, Touadera’s office abruptly announced that the CAR had adopted Bitcoin as legal tender alongside the CFA franc, a currency the country shares with five other central African economies.

It became the first country in Africa to embrace Bitcoin as a national currency, and the second in the world after El Salvador last September.

The April announcement sparked bemusement among analysts, given the entrenched poverty and lack of infrastructure in the CAR, where only one person in seven has access to mains electricity. 

They also voiced concern about the impact of crypto volatility on savings.

Virtual currencies have gone into a tailspin as investors look to safer havens at a time of inflation and uncertainty sparked by the Ukraine war.

Bitcoin has lost nearly 60 percent of its value over the past six months.

– ‘Digital gold’ –

Touadera on Sunday said 57 percent of Africa’s population does not have access to a bank.

“The solution,” he said, was “the smartphone, the alternative to the traditional bank, cash and financial red tape”.

On Twitter, he said, “gold served as the engine of our civilisation for ages! In this new age, digital gold will serve the same for the future.”

The CAR’s rush to crypto has been seen by some critics in the context of its closer ties with Russia.

Touadera has been accused of using Russian paramilitaries to buttress his regime and offering CAR’s natural resources in exchange. 

The country has a treasure chest of minerals, ranging from copper and gold to diamonds and uranium.

The CAR, a former French colony, plunged into a civil war along sectarian lines in 2013 after the then-president, Francois Bozize, was ousted.

Touadera was first elected in 2016 after an interim period and re-elected in disputed circumstances in 2020.

Violence diminished in 2018 but rebel forces remain active.

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Turkish inflation hits two-decade high of 78.6%

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Rising prices have sparked waves of protests in Turkey ahead of next year’s general election, the toughest of President Recep Tayyip Erdogan’s rule
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Inflation in Turkey in June soared to an annual rate of 78.6 percent — the highest in 24 years, according to official data released Monday — as President Recep Tayyip Erdogan’s unconventional economic policies continued to take their toll.

But independent estimates published by Turkish economists showed prices rising at more than double that figure.

The inflation rate reported by Turkey’s state statistics agency was the highest since the emerging market suffered a currency meltdown during a global financial crisis in 1998.

Inflation had stood at 73.5 percent in May and at 15.0 percent at the start of last year.

Economy Minister Nureddin Nebati on Friday vowed that consumer prices will start dropping in December.

“I promise to you and to the president, we will see a drop in inflation starting in December,” he was quoted as saying by Turkish media.

According to the official data, the surge in inflation in June was driven by a jump of 123.4 percent in the cost of transportation and a 94-percent increase in non-alcoholic drinks.

Turkey’s latest problems began when Erdogan forced the central bank to go through with a series of interest rate cuts last year that he said were part of his “new economic model”.

The policy rate went down despite rising consumer prices.

But the Turkish leader rejects conventional economics and affirms that high interest rates cause prices to rise.

Economists believe his approach has exacerbated the pain felt world-wide from the jump in food and energy prices caused by Russia’s invasion of Ukraine. 

– Questions over data –

However, more and more economists are starting to question Turkey’s official data.

A monthly report release Monday by Turkey’s ENAG group of independent economists showed consumer prices rising by 175 percent in June.

ENAG said prices had risen by 71.4 percent since the start of the year alone.

The Istanbul chamber of commerce said inflation in Turkey’s largest city has reached an annual rate of 94 percent.

“No one actually believes official Turkish data anymore,” said BlueBay Asset Management economist Timothy Ash.

“There is no expectation of anything like a credible policy response.”

Turkey’s official data are turning into a hot political issue ahead of next year’s general election — widely viewed as the toughest of Erdogan’s two-decade rule.

Opposition leader Kemal Kilicdaroglu accused the state statistics agency of “lying”.

“Stop committing crimes for the benefit of President Erdogan,” Kilicdaroglu told the agency on Twitter.

A survey published by the Metropol polling agency on Friday showed 69 percent of respondents believed the unofficial ENAG figure and just 24 percent the one reported by the government.

– ‘Cost-of-living problem’ –

Erodgan has doubled down on his economic approach and hinted that he may want the benchmark interest rate to move even lower in the months to come.

He has also tried to reverse the accompanying drop in his public approval by announcing a rapid series of wage hikes to large parts of the population.

He has bumped up the minimum wage earned by roughly 40 percent of the working Turks from 2,826 liras in late December to 5,500 liras ($325) this month.

The wage is used as the benchmark for a wide range of social benefits across the economy.

Economists warn that substantially raising the pay of so many people is an inflationary measure that should be accompanied by interest hikes or other means of limiting spending.

But Erdogan rejects the very idea that Turkey is suffering from inflation.

“We do not have an inflation problem. We have a cost-of-living problem,” Erdogan said last month.

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Turkish inflation hits two-decade high of 78.6%

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Rising prices have sparked waves of protests in Turkey ahead of next year’s general election, the toughest of President Recep Tayyip Erdogan’s rule
Share this:

Inflation in Turkey in June soared to an annual rate of 78.6 percent — the highest in 24 years, according to official data released Monday — as President Recep Tayyip Erdogan’s unconventional economic policies continued to take their toll.

But unofficial estimates published by Turkish economists showed prices rising at more than double that figure.

The inflation rate reported by Turkey’s state statistics agency was the highest since January 1998.

Inflation had stood at 73.5 percent in May and at 15.0 percent at the start of last year.

Economy Minister Nureddin Nebati on Friday vowed that consumer prices will start dropping in December.

“I promise to you and to the president, we will see a drop in inflation starting in December,” he was quoted as saying by Turkish media.

According to the official data, the surge in inflation in June was driven by a jump of 123.4 percent in the cost of transportation and a 94-percent increase in non-alcoholic drinks.

Turkey’s crisis started when Erdogan forced the central bank to go through with a series of interest rate cuts last year that he said were part of his “new economic model”.

The policy rate went down despite rising consumer prices.

But the Turkish leader rejects conventional economics and affirms that high interest rates cause prices to rise.

Economists believe his approach has exacerbated the pain felt world-wide from the jump in food and energy prices caused by Russia’s invasion of Ukraine. 

– Questions over data –

However, more and more economists are starting to question Turkey’s official data.

A monthly report release Monday by Turkey’s ENAG group of independent economists showed consumer prices rising by 175 percent in June.

ENAG said prices had risen by 71.4 percent since the start of the year alone.

The Istanbul chamber of commerce said inflation in Turkey’s largest city has reached an annual rate of 94 percent.

“No one actually believes official Turkish data anymore,” said BlueBay Asset Management economist Timothy Ash.

“There is no expectation of anything like a credible policy response.”

Turkey on Friday substantially raised the minimum wage for the second time in a year to cushion the blow on households ahead of next year’s general election.

The hike of the net monthly take-home pay to 5,500 liras ($330) means the nominal minimum wage has nearly doubled since the end of last year.

It stood at 2,826 liras in late December and 4,253 liras in January.

Economists warn that substantially raising the pay of a large swathe of the population is an inflationary measure that should be accompanied by interest hikes or other means of limiting spending.

Official data show that more than 40 percent of Turks earned the minimum wage at the start of the year.

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