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Dogecoin’s Transaction Surge Surpasses Bitcoin and Ethereum With 2 Million Transactions Settled in 24 Hours

The Dogecoin blockchain has witnessed a significant surge in transaction activity ever since the inception of DRC20 tokens. When compared to other prominent networks, Dogecoin has stood out with its substantial volume of processed transactions. Recent statistics reveal an unprecedented milestone reached on May 27, 2023, as the number of DOGE transactions soared to a record-breaking high of more than 2 million.

Dogecoin’s Transfer Activity Skyrockets, Hashrate Climbs More Than 38%

The leading meme coin network, Dogecoin, has been leaving behind network giants like Bitcoin and Ethereum in the race for daily transaction settlements. While Bitcoin has averaged around 400,000 to 532,000 confirmed transactions per day over the past week, and Ethereum has been processing approximately a million transfers daily, Dogecoin has surpassed them both.

Since May 22, the Dogecoin network has consistently confirmed over a million transactions each day, reaching 1.42 million on May 23. Saturday, May 27 witnessed a milestone for the Dogecoin network as it soared to an all-time high, processing 2,079,070 transactions.

Today, on May 28, 2023, the network shows no signs of slowing down, with the transaction count already surpassing the million mark and continuing to climb. The surge in DOGE transactions can be attributed to the introduction of DRC20 tokens, akin to the BRC20 tokens minted on the Bitcoin blockchain.

The realm of DRC20 tokens is expansive, but their current values lack the indexed structure found in BRC20s, making it difficult to figure out the worth of these newfound assets. Presently, DRC20s, also known as Doginals, are primarily exchanged through over-the-counter (OTC) trades, reminiscent of the early days when Bitcoin-based Ordinal inscriptions were traded before the advent of Ordinal exchange platforms.

Alongside the surge in transactions, the Dogecoin network, which can be merge mined with Litecoin, has experienced a notable uptick in hashrate over the past few weeks. To illustrate, the Scrypt hashrate dedicated to the Dogecoin network on May 9 stood at 638 terahash per second (TH/s). However, it has escalated by 38.71% to its current standing of 885 TH/s.

What do you think about the Dogecoin network settling more than 2 million transfers on Saturday? Do you expect this trend to continue? Share your thoughts and insights in the comments section below.

‘Weaponization Project of the Dollar’: Asian Countries Talk De-Dollarization; Jim Rogers Says USD’s Time ‘Coming to an End,’ and More — Week in Review

The future fate of the U.S. dollar continues to dominate financial news, as investor Jim Rogers says the USD’s time is “coming to an end,” and nine Asian countries have been discussing de-dollarization measures in Iran. In other news, an expert has predicted that the price of gold will skyrocket due to economic conditions, and JPMorgan CEO Jamie Dimon has said of interest rates that people “should be prepared for rates going higher from here.” All this and more just below, in this latest Bitcoin.com News Week in Review.

9 Asian Countries Discuss De-Dollarization Measures in Meeting Hosted by Iran

Top officials from nine Asian countries, members of the Asian Clearing Union (ACU), have gathered in Tehran for their annual meeting, where de-dollarization takes center stage. In addition to the officials from Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka, Russia’s central bank governor and officials from Belarus and Afghanistan also attended the meeting.

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Renowned Investor Jim Rogers Warns US Dollar’s Time ‘Coming to an End’ as Countries Seek Alternatives

Veteran investor Jim Rogers, who co-founded the Quantum Fund with billionaire investor George Soros, says the U.S. dollar’s time is coming to an end as more countries are seeking alternatives to the USD. “Many friends of America are moving, trying to find something to compete with and ultimately replace the U.S. dollar. It will happen. It has always happened,” he warned.

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JPMorgan Boss Warns ‘Everyone Should Be Prepared’ for Interest Rates ‘Going Higher From Here’

JPMorgan Chase, the largest bank in the United States, held its investor day event on Monday, where CEO Jamie Dimon answered questions from analysts and journalists. Despite market expectations of a rate hike pause, Dimon cautioned that people “should be prepared for rates going higher from here.” The billionaire banker also discussed the potential for commercial real estate to sour following concerns raised by Berkshire Hathaway’s Charlie Munger about the sector.

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Gold Prices Poised to Skyrocket as Expert Predicts Fourfold Increase in Demand

Although gold has been trading below the $2K range since May 16, 2023, Rick Rule, the founder of Rule Investment Media, is confident that the struggling U.S. economy will cause demand for precious metals like gold to skyrocket. In an interview published on May 18, Rule emphasized that people’s anxiety about the purchasing power of conventional savings methods has always been the main factor driving gold prices. According to Rule, this trend is likely to continue, and he predicts that demand for gold will increase by fourfold in the near future.

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What are your thoughts about recent conversations on the dollar losing its influence in global economics? Let us know in the comments section below.

Biden, Republicans Strike Tentative Deal to Raise US Debt Ceiling

The White House and House Republicans have reached an agreement in principle to raise the U.S. debt ceiling. Described by President Joe Biden as “good news for the American people,” the deal would open the door to avoiding a historic default by the government in Washington and averting not just a potential economic catastrophe in the United States but a global recession as well.

Joe Biden, Kevin McCarthy Announce In-Principle Agreement to Raise Debt Ceiling

After weeks of negotiations, which put an end to a months-long stalemate, the White House and the Republican leadership of the House of Representatives now have “an agreement in principle” on a deal to raise the debt ceiling in the U.S. for two years and limit budget spending.

The agreement has been reached by President Joe Biden and House Speaker Kevin McCarthy during a phone call on Saturday. Both sides are now facing the difficult task to convince the Republican-controlled House and Democrat-dominated Senate to back the deal in Congress before June 5.

On that date, the U.S. government could find itself unable to pay its bills, according to Treasury Secretary Janet Yellen, who just updated her projection on Friday. Yellen had previously estimated that the United States could default on its debt obligations as early as June 1.

“We have come to an agreement in principle. We still have a lot of work to do but I believe this is an agreement in principle that is worthy of the American people,” McCarthy told reporters, quoted by CNN. In a tweet, he accused the U.S. head of state that “he wasted time and refused to negotiate for months.”

President Biden confirmed the deal on Twitter, too. He remarked that the agreement is a compromise that would not make everyone happy but emphasized it “is good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession.”

Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle.

It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. And, the agreement protects my and…

— President Biden (@POTUS) May 28, 2023

Deal to Cap Spending, Postpone Further Ceiling Revisions Until After 2024 Election

Joe Biden urged both chambers of Congress to “pass the agreement right away.” Negotiating teams are expected to present the finalized text of the legislation on Sunday and McCarthy said that he will likely speak with the President again in the afternoon.

If approved by lawmakers, with the House vote expected on Wednesday, the agreement would increase the limit for the U.S. government’s $31.4 trillion debt through January 2025, postponing future clashes over the ceiling between the Democrats and the Republicans beyond the 2024 presidential election.

It would also cap spending in the 2024 and 2025 budgets, Reuters reported. And according to a source familiar with the negotiations quoted by CNN, non-defense spending will be capped to the current levels for next year and increased by 1% in the following fiscal year.

In case Biden signs it into law before the approximate default date, Washington would avoid a potentially unprecedented crisis with unpredictable consequences for the world economy as the U.S. government has never before defaulted on its obligations.

The threat of a recession has sparked reactions across the globe. While the credit rating agency Moody’s labeled the potential U.S. default a “near-term danger to the dollar’s position,” China’s Chengxin International Credit Rating agency downgraded the United States’ credit rating this week.

Crypto markets reacted positively to the news of the deal reached in the U.S. capital, with the price of bitcoin (BTC) rising by around 2% in 24 hours to over $27,000 at the time of writing and that of ether (ETH), the second-largest crypto by market cap, increasing by nearly 1% to almost $1,850 per coin.

Do you expect the Congress to support the agreement to raise the U.S. debt ceiling on time? Tell us in the comments section below.

Blockchain-Based Re-Usable KYC ‘Particularly Valuable in Web3’ — Cheqd CEO Fraser Edward

According to Fraser Edward, the CEO and co-founder of the public permissionless network, Cheqd, one of the main hurdles faced when attempting to move data stored on Web2 servers to Web3 is “establishing a clear and scalable revenue model.” Edward however suggested overcoming this hurdle will unlock new use cases which facilitate economic activities within the Web3 ecosystem will be unlocked.

The Trusted Data Market

The Cheqd co-founder also told Bitcoin.com News that in today’s data-driven world, greater emphasis is now being placed on obtaining accurate and verified data. This shift in value from what Edward labeled generic data to trusted data is evidenced by users’ demand for data that is portable and cryptographically verifiable. According to Edward, it is this demand for assured data that has given rise to what is now known as the “trusted data market.”

Meanwhile, in the rest of his responses to questions from Bitcoin.com News, the Cheqd CEO touched on the so-called “bot paranoia” and how a decentralized reputation system can be used to combat bots and impersonators. The CEO also offered his thoughts on blockchain-based re-usable KYCs as well as how these can be used in the real world.

Below are Edward’s answers to questions sent to him via Telegram.

Bitcoin.com News (BCN): What is a Trusted Data Market and what problem does it solve for businesses and individuals?

Fraser Edward (FE): In today’s data-driven world, trust and assurance in data are critical, especially considering the increasing volume of data, the emergence of advanced language models like ChatGPT, and the rising volume of fraud. This shift in value from generic data to “trusted data” is characterized by data which is portable, cryptographically verifiable, assured provenance and traceability. Since trusted data has value, recipients will pay the issuers of the data for that value, incentivising them to provide more trusted data wherever possible.

Let’s consider the example of a Web3 lender looking to attract new users from Web2, and retain existing users in Web3 by lowering collateral ratios on crypto loans: Suppose a borrower approaches a lender, either in the cefi or defi space, seeking a loan. Traditionally, lenders require significant over-collateralization (>140-200%) due to the unknown risk associated with an individual borrower.

In a new scenario, lenders and protocols can offer appropriately collateralized loans if the borrower provides signals that support a perceived reduction of risk. These ‘signals’ are trusted data which may include on-chain transaction history, social signals and proofs like DAO contribution history, ownership of real-world assets, and even the borrower’s Web2 credit score and KYC data. The lender utilizes these signals to assess the risk of the loan. The more signals the borrower provides, the lower the perceived risk.

This enables lenders to offer competitive loan terms while maintaining their risk profile. Moreover, it enhances the efficiency of capital markets, stimulates growth through new money creation, and establishes cryptocurrencies as a viable alternative to fiat currencies. As the loan is repaid, the lender can provide prompt payment credentials to the borrower, which the borrower can share with other lenders to demonstrate good behaviour. The new lender then compensates the old lender and the borrower for these credentials.

Cheqd supports this data market by ensuring the lender (the verifier of the trusted data) can utilise Cheqd’s payment infrastructure to pay the Issuer of the trusted data (let’s say a consumer credit agency) in a privacy-preserving mechanism. The transaction (the loan) remains trustless, however, the relationship between the borrower and the lender has signals that support trust, enabling a more efficient lending market in crypto whilst retaining what makes crypto lending unique.

Lastly, let’s explore the application of credentials in the context of DAOs: A DAO commissions an anonymous artist for a specific artwork. The artist successfully completes the work and receives payment from the DAO. The DAO provides the artist with a credential endorsement stating their professionalism, quality work, and timely delivery. The artist can then anonymously share this credential with future projects or DAOs when applying for a job. In this scenario, the new DAO or project may compensate the previous DAO for the recommendation, as it helps de-risk their hiring process. By leveraging trusted data credentials, businesses and organizations can enhance trust and streamline onboarding to speed up work.

BCN: The so-called “bot paranoia” often makes users question whether the person they’re talking to in the digital world is really who they claim to be. Can a decentralized reputation system solve that problem for users? If so, how?

FE: A decentralized reputation is built on various signals that contribute to its credibility. These signals encompass a wide range, including KYC and liveness credentials, social media history (such as account age and posting frequency), and endorsements from other individuals or organizations. Users have the flexibility to combine and selectively share these signals to prove their reputation. While each signal could be manipulated individually, attempting to do so for all signals would be highly challenging and time-consuming.

Moreover, since each recipient of the reputation (i.e., the observer) can prioritize different factors, impersonating someone would require covering all bases, adding significant time and effort to the process. While impersonation remains theoretically possible, the time-consuming nature of such attempts makes it economically unviable. For instance, it would involve maintaining consistent social accounts over the years, demonstrating a regular history, and acquiring endorsements from reputable organizations and people.

BCN: Your company is said to be building a marketplace where holders, issuers, and verifiers can exchange and monetize verifiable data. Can you tell our readers who these holders, issuers, and verifiers are as well as how the exchange and monetization of data works?

FE: Absolutely. One nuance here is that “holders, issuers, and verifiers/receivers” are roles and therefore often overlap, especially for organizations. Let’s consider an example: An investment DAO employs someone to analyze companies and projects for potential funding. The DAO gives the person or people credentials so they can prove who they work for to the companies and projects so they can be trusted and prevent scamming.

In this scenario:

Issuer: DAO
Holder: Person
Verifier/receiver: Bank

Then, once the DAO has invested, it issues credentials to the company or project so that it can prove they are trustworthy and reputable to other investors or potential business partners without needing to involve the DAO all the time.

In this scenario:

Issuer: DAO
Holder: Company or project
Verifier/receiver: Other investors or potential partners

BCN: Much of the world’s data is still stored on Web2 servers. Bringing them to Web3 in a verifiable and privacy-preserving manner could help unlock new use cases or at least improve the existing ones. What are the challenges of bringing verifiable Web2 data such as credit scores to the Web3 ecosystem to facilitate economic activities?

FE: One of the primary historical hurdles of releasing data to the control of individuals has been the commercial aspect. Traditionally, companies collect, aggregate, and analyze data, generating revenue by selling either aggregate data or insights derived from their analysis. Transitioning to the new data paradigm, where individuals have control over their own data, requires new technologies, which entail costs for businesses. Without a viable revenue stream associated with these changes, commercial feasibility is limited unless mandated by regulations.

Therefore, the key challenge lies in establishing a clear and scalable revenue/commercial model, which is precisely what we at Cheqd are directly addressing. Our focus is on incentivizing the release of data from existing servers and silos back to the control of the individuals to whom it pertains. By solving this challenge, we can unlock new use cases or improve existing ones, facilitating economic activities within the Web3 ecosystem.

BCN: The KYC process is sometimes seen as a major stumbling block in the financial services sector. It can be time and resource-consuming and the data can be fraudulent. Do you think a so-called blockchain-based re-usable KYC can solve this problem and potentially improve the user experience?

Absolutely, re-usable KYC is particularly valuable in Web3, where users are highly mobile and prone to switching between multiple exchanges or marketplaces. For example, the European Commission found 21% of survey respondents had switched providers, i.e. exchanges or marketplaces within the last 5 years, higher than for any other product or service, e.g. current accounts or fiat investment products. It did not ask about switching multiple times within this period or using multiple providers which anecdotally we know most people do.

Currently, many financial service providers outsource their KYC requirements to third-party providers like Onfido, Jumio, or Trulioo, who perform the checks and provide the results. As a result, users often find themselves repeatedly providing their information to the same third-party provider when registering with different financial service providers.

By undergoing the KYC process once and obtaining re-usable credentials, users can utilize those credentials with different service providers multiple times. Implementing such a system would significantly expedite onboarding processes and enhance user satisfaction, particularly when compared to the current approach. It also allows people to use parts of those digital credentials for other purposes, like proving they are over a certain age to buy alcohol, tobacco or lottery tickets for example, without exposing everything in the credential.

What are your thoughts on this interview? Let us know what you think in the comments section below.

Russian State Duma Chairman: ‘US National Debt Is a Global Financial Pyramid’

Vyacheslav Volodin, chairman of the Russian State Duma, the lower house of the Russian Federal Assembly, has stated that U.S. debt has become a “global financial pyramid” whose objective is to “deceive other nations and people.” Volodin also explained that the ability of the U.S. government to service its debt was weakening, making the U.S. dollar a toxic currency.

Russian State Duma Chairman Criticizes U.S. Debt Management

Vyacheslav Volodin, chairman of the Russian State Duma, has blasted the U.S. government’s management of its national debt. On Friday, the head of the lower house of the Russian Federal Assembly criticized the situation of the spiraling debt of the U.S. and how the U.S. government has lifted the debt ceiling more than 100 times in the past.

On his Telegram channel, Volodin stated:

All financial pyramids, as history shows, sooner or later end in failure. But the current situation is different. The U.S. national debt is a global financial pyramid created by Washington to deceive other nations and people.

Furthermore, Volodin explained that the ability of the U.S. government to service its debt was weakening. This made the dollar a risky coin to hold, Volodin remarked, making it a “toxic” currency, explaining that several countries were shifting to other currencies for this cause.

U.S. Debt in Perspective

According to official numbers, for the year 2023, the U.S. debt was $31.4 trillion, having increased almost $10 trillion during the last five years. A significant yearly increase was produced in 2020 when it rose 19% due to the impact of the different Covid-19 assistance programs.

The increase in this national debt also determines a rise in the interest paid on it. On this, Volodin stated:

Just think about it, in 2023 the sum of interest payments on the U.S. national debt could reach 1.5 trillion USD, and it is almost a third of all US budget revenues.

The Chairman of the State Duma also recommended that the different states of the U.S. federation should seek alternatives to the dollar to reduce the risks for their citizens.

Twenty-three states are discussing laws to approve using gold and silver for payments. In April, Arkansas signed a law to make gold and silver bullion and coins legal tender, releasing transactions made with these metals from any tax duties. In the same way, Texas is currently advancing a bill that would issue a gold-backed digital currency as legal tender.

What do you think about the statements of Vyacheslav Volodin, chairman of the Russian State Duma, on the U.S. national debt and the U.S. dollar? Tell us in the comment section below.

Makerdao Considers Significant DAI Savings Rate Hike: 3.3% on the Horizon, If Vote Passes

The Makerdao collective is currently immersed in a discussion about the potential rise of the DAI stablecoin’s savings rate to 3.3%. This suggestion was introduced by Block Analitica and revealed to the community on May 26 under the title “Stability Scope Parameter Changes #2.”

Block Analitica Proposes Raising DSR to 3.3%

Risk and intelligence firm Block Analitica has recommended boosting Makerdao’s DAI Savings Rate (DSR) to 3.3%, as per a recent proposal submitted on Friday. Makerdao’s DSR is a function that enables users to accrue interest on their DAI holdings by securing their DAI within DSR smart contracts.

“Brace yourself, DAI holders, for a DSR at 3.33%,” declared Makerdao’s official Twitter account. “An upcoming Executive Vote will deploy a new DSR raise, from 1% to 3.33%, if approved. This change was put forth by [Block Analitica] and submitted via the latest Stability Scope Parameter Changes,” the Makerdao team further elaborated.

At present, DAI ranks as the fourth-largest stablecoin asset by market capitalization, and it is supported by a substantial quantity of centralized stablecoins. Data on May 27, 2023, reveals that more than 24% of the collateral underpinning DAI consists of USDC, 10.4% comes from GUSD, and another 10.4% is comprised of USDP.

Only 11.5% is backed by ethereum (ETH), and an additional 8.5% is collateralized by Lido’s staked ether (STETH). Over the past month, DAI’s supply has diminished by 3.5%, and since February 2022, its market capitalization has decreased from $9.8 billion to its current value of $4.61 billion. The proposition to augment the DSR would yield a considerably higher interest rate than today’s 1%.

The first escalation to 1% commenced last year, followed by a notable surge in DAI DSR deposit activity and engagement from Olympus DAO this year. A similar upswing in action could transpire if the community advances the proposal to an approval status through a Makerdao vote.

Do you think the proposed DAI savings rate hike by Makerdao could ignite a surge in activity? Share your thoughts and opinions in the comments section below.

EU Securities Watchdog ESMA Warns of Unregulated Crypto, Gold Investment Offerings

The European Securities and Markets Authority (ESMA) has issued a warning regarding investments in assets like cryptocurrencies. They will remain unregulated in most countries until the EU’s Markets in Crypto Assets (MiCA) law is enforced across the Union, the regulator pointed out.

ESMA Highlights Risks Related to Unregulated Products and Services for Crypto and Other Assets

The European Union’s securities watchdog, ESMA, has issued a statement warning investors of risks arising from investment firms providing both regulated and unregulated products and services for crypto and gold, among other assets, as well as some non-transferable securities.

These usually fall outside the scope of the EU’s existing financial services regulation but are offered as alternatives to financial instruments. ESMA remarked that retail investors often rely on the reputation of a provider and advised companies on how they should act in such cases.

#ESMA warns investors of risks that arise when investment firms offer both regulated and unregulated products and/or services.

remind firms of the behaviours they are expected to adopt
firms may not benefit from regulatory protectionshttps://t.co/TT3CQFgeKs pic.twitter.com/5CPrrbbvid

— ESMA – EU Securities Markets Regulator (@ESMAComms) May 25, 2023

The authority also noted that while MiCA is close to its full adoption, offered crypto assets will continue to be unregulated in most jurisdictions until the legislation enters into force throughout the EU, a process expected to complete in 2025.

ESMA is concerned that potential investors may be misled in terms of the level of protection they get, when unregulated products and services are offered in parallel, on the same website with regulated ones, and not fully aware of their nature and associated risks.

The watchdog recommends that investment firms “take all take all necessary measures to ensure that clients are fully aware of the regulatory status of the product/service they are receiving.” That includes clear disclosures when regulatory protections do not apply.

The information about the regulatory status of a product or a service should be “fair, clear and not misleading” and “effectively communicated in all dealings with clients,” ESMA suggests, while the companies should not use their own regulatory status for promotion purposes.

Do you think the European market for crypto investment products and services will grow with the adoption of MiCA? Share your expectations in the comments section below.

Rich Dad Poor Dad Author Robert Kiyosaki Says America Is Bankrupt Amid US Debt Crisis

Rich Dad Poor Dad author Robert Kiyosaki says America is bankrupt as lawmakers engage in lengthy negotiations over the debt ceiling. “Unfunded liabilities as Social Security are over $250 trillion,” he said as the U.S. faces a potential debt default.

Robert Kiyosaki on U.S. Debt Crisis

The author of Rich Dad Poor Dad, Robert Kiyosaki, has shared his perspective on the U.S. debt crisis and the lengthy negotiations surrounding the debt ceiling. Rich Dad Poor Dad is a 1997 book co-authored by Kiyosaki and Sharon Lechter. It has been on the New York Times Best Seller List for over six years. More than 32 million copies of the book have been sold in over 51 languages across more than 109 countries.

“Politicians debating raising $30 trillion U.S. debt limit bad comedy, ‘Kabuki theater,’” Kiyosaki tweeted Wednesday, adding:

Facts are: U.S. bankrupt. Unfunded liabilities as Social Security are over $250 trillion. Financial market ‘derivative assets’ measured in quadrillions … thousands of trillions.

He then reiterated his usual recommendation of buying gold, silver, and bitcoin. The famous author previously explained that the three investments are “best for unstable times.”

Kiyosaki believes that the U.S. debt exceeds the commonly mentioned figure of $31.4 trillion, indicating a more severe situation. A study shows that off-the-books obligations or unfunded liabilities of the U.S. amount to over $250 trillion.

In March, the Rich Dad Poor Dad author predicted that the next crash will be the $1 quadrillion derivatives market. He cautioned that the Federal Reserve’s interest rate hikes will crash stocks, bonds, real estate, as well as the U.S. dollar.

In a follow-up tweet on Friday, Kiyosaki raised concerns about Germany’s recession, warning that the U.S. could fail next. The German economy experienced a technical recession in the first quarter of this year. Referencing the banking crisis, where several major banks failed, the renowned author wrote:

First banks. Countries next? Will Germany be the first country to fail? Go bankrupt? if Germany fails which country will be next? Will America default after Germany?

U.S. Treasury Secretary Janet Yellen has revised her estimation of the potential date for the U.S. to default on its debt obligations to June 5, from the previous date of June 1. The Congressional Budget Office (CBO) estimated that a U.S. default could occur in the first two weeks of June. Global investment bank Goldman Sachs, however, said the “real deadline” for a U.S. default is more like June 8-9. On Saturday, the White House and Republicans reached a tentative deal to avoid a U.S. default.

What do you think about the statements by Rich Dad Poor Dad author Robert Kiyosaki? Let us know in the comments section below.

Treasury Secretary Yellen Revises Debt Default Date: US Government Could Exhaust Funds by June 5

U.S. Treasury Secretary Janet Yellen has updated her projection regarding the date the U.S. government could default on its debt obligations. She warned that the Treasury “will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5.”

Yellen Warns US Could Default on June 5

U.S. Treasury Secretary Janet Yellen has revised her estimate for the potential date of a U.S. default. In a letter she sent to all congressional leaders Friday regarding the debt limit, Yellen wrote:

Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5.

“We will make more than $130 billion of scheduled payments in the first two days of June, including payments to veterans and Social Security and Medicare recipients. These payments will leave Treasury with an extremely low level of resources,” Yellen clarified.

“During the week of June 5, Treasury is scheduled to make an estimated $92 billion of payments and transfers, including a regularly scheduled quarterly adjustment that would result in an investment in the Social Security and Medicare trust funds of roughly $36 billion. Therefore, our projected resources would be inadequate to satisfy all of these obligations,” the Treasury secretary added.

Yellen previously said that the Treasury will not be able to pay all of the government’s bills as early as June 1. The Congressional Budget Office (CBO) estimated that a U.S. default could occur in the first two weeks of June. Meanwhile, global investment bank Goldman Sachs said the “real deadline” for a U.S. default is more like June 8-9.

The U.S. government is expecting some tax payments on June 15. However, Yellen has stated that “the odds of reaching June 15, while being able to pay all of our bills, is quite low.”

Many people have warned of disastrous consequences of the U.S. defaulting on its debt obligations. Yellen said the consequences would be “unthinkable.” The International Monetary Fund (IMF) expects “very serious repercussions” if the U.S. defaults on its debt. Harvard Professor Kenneth Rogoff said it could spark a global financial crisis.

What are your thoughts on the revised timeline provided by U.S. Treasury Secretary Janet Yellen regarding the potential date of the U.S. government defaulting on its debt obligations? Let us know in the comments section below.