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Showing posts with label virtual currency. Show all posts
Showing posts with label virtual currency. Show all posts

Sunday, 21 March 2021

Bitcoins, Cryptocurrencies under fire

 

Bitcoins


 India and China come down hard due to concerns of financial market stability, illegal fundraising

N THE latest twist involving the world of cryptocurrencies, India’s government plans to impose a massive ban on the asset class.

Reports have indicated that the Indian government plans to pass a bill that would ban just about every activity involving cryptocurrencies, including the possession, issuance, mining, trading and the transferring of crypto-assets.

Once passed, this would make it one of the world’s strictest policies on cryptocurrencies. Government officials have said that the move is because they believe cryptocurrencies threaten the stability of financial markets, tend to fund unlawful activities and even resemble ponzi schemes.

The move by the Indian government falls in line with the school of thought that cryptocurrencies could increasingly suffer bans by governments around the world.

In India’s case, the move comes after an earlier ban two years ago. But last year, the courts in India overturned the decision, citing the ban as “disproportionate” after cryptocurrency exchanges filed a lawsuit against the central bank’s ban.

The strong stance against cryptocurrencies has also been shown by China’s government. More than three years ago, China was the first country to ban initial coin offerings (ICOs), calling it “illegal fundraising”.

Since then, the Chinese government has accelerated efforts to clamp down all businesses involved in cryptocurrency operations, including bitcoin miners.

China’s government says its stance is based on investor protection, money laundering concerns and the unnecessary consumption of energy due to crypto mining activities.

Last month alone, there were plans to ban new cryptocurrency mining projects and shut down existing ones in China’s Inner Mongolia region.

As one financial analyst puts it, “the problem with cryptocurrencies is that while it thrives to work in an unregulated world, it is bound to come under the scrutiny and regulation of governments, which are mostly afraid of its misuse and potential negative impact to financial markets. Perhaps somewhere in the future, a balance will be struck but that is anyone’s guess”.

While governments have a tendency to ban cryptocurrencies, many are embracing blockchain technology with the intention of issuing state-backed digital currencies.

This is essentially an electronic version of notes or coins which would replace physical cash entirely and dubbed central bank digital currencies or CBDC.

China is one of the leading countries for this and has already passed a law to legalise its own official digital currency. Similarly, India is an example of another country that is considering having its own digital currency. Interestingly, India’s move to pass the bill to ban cryptocurrencies comes soon after the mother of all cryptos, namely, bitcoin has hit its all-time high past US$60,000 (RM246,449) for the first time earlier this week.

The world’s biggest currency rally was driven by speculative demand, increased adoption by firms and institutional investors that see bitcoin as a store of value. Last month, Tesla bought over a billion dollars worth of bitcoins.

The electric car maker said it plans to accept the digital coin as payment for its products. Mastercard has also said it would also soon accept bitcoin as a form of payment.

Asset manager BlackRock and payment companies Paypal and Square have also recently backed cryptocurrencies.

Back home, the question remains whether the government, central bank or the Securities Commission (SC) would take a stronger stance against cryptocurrencies.

Malaysia’s regulators have held the view that digital assets are not legal tender and have warned investors to be cautious when dealing with cryptocurrencies.

SC chairman Datuk Syed Zaid Albar tells StarBizWeek that “investors must understand that unregulated, offshore investments are not protected under Malaysian securities law”.

“The SC has put in place a regulatory framework for such new emerging investment channels to provide certainty to issuers and investors who are keen to explore these new instruments.

“For example, our regulatory framework has tried to address issues such as putting investors’ money in trust accounts, accurate disclosures, cooling-off periods and conflict of interest situations are also regulated, ” Syed Zaid explains.

The country’s central bank, Bank Negara, also echoes a similar view, explaining that digital assets lack the characteristics of money and suffer from several limitations such as price volatility and risks of cyber threats.

“Digital asset activities are also subject to anti-money laundering and counter-terrorism financing regulations administered by the respective authorities, ” the central bank reported in its annual report in 2019.

Malaysia is also one of the countries studying the feasibility of issuing its own digital currency. “The bank is no exception, and we continue to engage closely in discussions surrounding CBDC with other central banks, ” it said.

More collaborations among central banks around the world are taking place to study the impact of a digital currency for financial stability and the monetary policy of a country.

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Tuesday, 5 November 2019

China gets into blockchain race with US



Blockchain is perhaps best known for underpinning the operation of cryptocurrencies such as bitcoin, which Beijing may seek to replicate.PHOTO: REUTERS
One example of the potential application of blockchain technology is a newly launched app by the Communist Party that asks members to explain why they joined and what party loyalty means to them. (Photo: AFP/Greg Baker)

BEIJING: China has launched an ambitious effort to challenge the US dominance in blockchain technology, which it could use for everything from issuing digital money, to streamlining a raft of government services and tracking Communist Party loyalty.

The technology received a crucial endorsement from President Xi Jinping last week, a signal that the government sees blockchain as an integral part of the country's plan to become a high-tech superpower.

Beijing is the latest in a handful of countries to have adopted a law strictly governing the encryption of data - particularly blockchain technology, which allows the storage and direct exchange of data without going through an intermediary.

Reputedly unfalsifiable, blockchain is a database shared across a network of computers. Once a record has been added to the chain it is almost impossible to change.

It is perhaps best known for underpinning the operation of cryptocurrencies such as bitcoin - which Beijing may seek to replicate as it pushes ahead with its plans for a world-leading government-run digital currency.

https://cna-sg-res.cloudinary.com/image/upload/q_auto,f_auto/image/12059024/16x9/670/377/9e6b6b9b2b6ec007ae2c9a3107f86991/tI/blockchain-technology-received-a-crucial-endorsement-from-president-xi-jinping-last-week-a-signal-that-the-government-sees-it-as-an-integral-part-of-the-country-s-plan-to-become-a-high-tech-superpower-1572750315390-2.jpg
Blockchain technology received a crucial endorsement from President Xi Jinping last week, a signal
Blockchain technology received a crucial endorsement from President Xi Jinping last week, a signalBlockchain technology received a crucial endorsement from President Xi Jinping last week, a signal that the government sees it as an integral part of the country's plan to become a high-tech superpower. (Photo: AFP/Andrew Caballero-Reynolds)

Although the new law for blockchain "is still rather vague", the country is clearly one of the most active in terms of regulation, Stanislas Pogorzelski, editor of specialist site Cryptonaute.fr, told AFP.

"China has understood very well that to stay a superpower, you have to be at the forefront of new technologies," said Pogorzelski.

Blockchain is set to play a key role in many sectors in the future, including digital finance, internet of things, artificial intelligence and 5G.

LESS HUMAN INTERVENTION 

Bitcoin(FX:BTC/USD)Stock market insights from social media
Updated https://sentifi.com/currencies/bitcoin
It could also serve to make China's vast bureaucratic system more efficient.

The official Xinhua news agency said a blockchain-based system had been used for the first time to automatically generate and file an enforcement case in Chinese court against a party who failed to pay damages in a mediation agreement.

With less human intervention, such systems could make judicial enforcement in China "more intelligent and transparent," the agency said.

Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said China should step up research and development of the technology.

"Blockchain should play a bigger role in strengthening Chinese power in cyberspace, developing the digital economy and promoting socio-economic development," Xi said.

"The general sentiment of Xi's comments was simple," said Anthony Pompliano, who writes a daily cryptocurrency newsletter.

"Blockchain technology is really important for the future and China plans to be the global leader," Pompliano added.

LOYALTY TEST

According to analyst Kai von Carnap of the Mercator Institute for Chinese Studies, blockchain-backed tools have potential applications that go well beyond improving administrative efficiency in China.

"More interesting will be those targeting party discipline, internal stability and ideological loyalty," Von Carnap told AFP.
Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said
Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said
 https://cna-sg-res.cloudinary.com/image/upload/q_auto,f_auto/image/12059022/16x9/670/377/4fa319d4c8e8c12060091d197dfd0249/sF/chinese-shares-jumped-this-week-as-investors-piled-into-stocks-linked-to-blockchain-after-xi-said-china-should-step-up-research-and-development-of-the-technology-1572750315390-3.jpg
Chinese shares jumped this week as investors piled into stocks linked to blockchain, after Xi said China should step up research and development of the technology. (Photo: AFP/Hector Retamal)

One example is a newly launched app by the Communist Party that asks members to explain why they joined and what party loyalty means to them.

Blockchain technology is then used to store their responses on a permanent, widely distributed ledger - recording their thoughts in cyberspace forever.

"NOT A FAN"

As China trumpets its push for more blockchain technology, it is hoping to outpace trade-war rival the United States, whose President Donald Trump tweeted his disdain for cryptocurrencies in July.

"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air," he wrote.

The contrast between the world's two biggest economies is "striking", according to Pompliano, who says "bitcoin, blockchain technology, and digital assets are not a priority for America".

Facebook chief executive Mark Zuckerberg had to defend his plans to launch a digital coin called Libra to the US Congress in October, after it faced a torrent of criticism from all sides - including governments who see it as a threat to their monetary sovereignty.

"I don't think Libra will succeed," Huang Qifan, vice director of the CCIEE, an economic think-tank that advises Beijing, said this week in remarks widely reported by state media.

"It is better ... to have sovereign digital currencies issued by a government or a central bank," he said.

Last year China released a damning report on existing digital currencies, saying they were "increasingly used as a tool in criminal activities."

But while Beijing banned cryptocurrencies two years ago, it is fast-tracking preparations for its own state-run virtual currency, which is supposed to facilitate transactions and reduce costs.

The anonymity of cryptocurrencies allows users to buy and sell freely without leaving a digital trail - but China's mooted e-cash system will be tightly regulated, experts say, and run by the People's Bank of China.

Source: AFP/zl   Source link

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Blockchain endorsement : Xi said China will increase investment in blockchain technology after chairing a study session last week on d.

What is Blockchain Technology, its uses and applications?

 

BLOCKCHAIN beyond Bitcoin

Friday, 1 November 2019

President Xi’s Blockchain Push Triggers Frenzy in China Technology Stocks

Blockchain endorsement: Xi said China will increase investment in blockchain technology after chairing a study session last week on developing the industry, state-owned Xinhua reported.— AP
 
https://youtu.be/hfNcct7ZfbE

https://youtu.be/KoDD2Yk0bjE
  • Shenzhen tech index surges 5.3%, the most in eight months
  • Investors urge companies to develop blockchain businesses
BEIJING: Chinese investors snapped up every blockchain-related stock in sight after President Xi Jinping said Beijing wants to speed up development of the technology.

The gains were widespread yesterday, with Insigma Technology Co and Sinodata Co among more than 60 tech shares surging by the daily limit in Shanghai and Shenzhen.

The excitement coincided with a 26% rally in Bitcoin, and also boosted stocks with more tenuous connections to blockchain, like baby-food producer Beingmate Co and selfie-app developer Meitu Inc.

Xi said China will increase investment in blockchain technology after chairing a study session last week on developing the industry, state-owned Xinhua reported late last Friday.

The market reaction shows how far an endorsement from Xi can go in China, where high-level officials yesterday began their first major policy meeting since early 2018.

“Most of these companies, especially those that are just beginning to state their connection with blockchain today, are trying to take advantage of the hype, ” said Li Shiyu, fund manager at Guangdong Xiaoyu Investment Management Co. “It shows how much excitement can be triggered by something stressed as a priority by the top man himself.”

Xi Jinping comments spark rally in China technology stocks

The Shenzhen Information Technology Index closed 5.3% higher yesterday, its biggest advance in eight months.

Hundsun Technologies Inc, Easysight Supply Chain Management Co, YGSOFT Inc and dozens more companies with officially registered blockchain businesses rose by the 10% limit.

In Hong Kong, traders singled out Meitu due to its plans for an encrypted user-identification system.

The shares surged as much as 30%. Pantronics Holdings Ltd - which earlier this month said it will change its name to “Huobi Technology”, a reference to a digital currency exchange - rallied as much as 67%.

American depositary receipts of Chinese blockchain companies also surged last Friday.

Investors pressured other firms to jump on the blockchain hype, using an online Q&A platform to submit thousands of questions on their plans to use the technology.

“Please proactively make expansion plans in blockchain to jump on state policies - doing so would be the best reward to investors, ” urged one shareholder of development-store operator Hunan Friendship & Apollo Commercial Co. — Bloomberg

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Friday, 29 December 2017

Bitcoin falls as S. Korea says exchange closures possible

Downtrend: A small toy figure is seen on representations of the bitcoin virtual currency in this illustration. The cryptocurrency is down about 28 from its record high reached last week. — Reuters


SEOUL: Bitcoin resumed its tumble after South Korea said it was eyeing options including a potential shutdown of at least some cryptocurrency exchanges to stamp out a frenzy of speculation.

South Korea has been ground zero for a global surge in interest in bitcoin and other cryptocurrencies as prices surged this year, prompting the nation’s prime minister to worry over the impact on Korean youth.

While there’s no immediate indication Asia’s No. 4 economy will shutter exchanges that have accounted by some measures for more than fifth of global trading, the news poses a warning as regulators the world over express concerns about private digital currencies.

Bitcoin fell as much as 9% to as low as US$13,828 in Asia trading, erasing modest gains after the South Korean release, composite Bloomberg pricing shows. It’s now down about 28% from its record high reached last week.

South Korea will require real-name cryptocurrency transactions and impose a ban on the offering of virtual accounts by banks to crypto-exchanges, according to a statement from the Office for Government Policy Coordination.

Policy makers will review measures including the closure of crypto-exchanges suggested by the Ministry of Justice and take proper measures swiftly and firmly while monitoring the trend of the speculation. Bitcoin was trading at about a 30% premium over prevailing international rates yesterday in Seoul – a continuing sign of the country’s obsession, and the difficulty in arbitraging between markets.

“Cryptocurrency speculation has been irrationally overheated in South Korea,” the government said in the statement, which comes little more than a week after the bankruptcy filing of one South Korean exchange. “The government can’t leave the abnormal situation of speculation any longer.”

Singapore’s monetary authority warned last week that cryptocurrency buyers should be aware they could lose all their money, joining counterparts who’ve warned about speculative mania surrounding bitcoin, which has surged more than 1,300% this year.

“Regulators are getting so concerned that this is primarily and predominantly a retail phenomenon,” said Stephen Innes, head of trading for Asia-Pacific at Oanda. “Regulators not only in Asia but globally are going to start addressing this fact because I don’t think they’ve actually come to terms with what the absolute downside of a complete drop in crypto means for the economy.”

Source: Bloomberg

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