Tuesday, January 16, 2018

Cryptocurrency prices crashing as Wednesday trading opens up to a number of countries ready to severely regulate crypto use and trading

By the time U.S. markets opened up on Jan. 16, Bitcoin, Ethereum, and most other cryptocurrencies had experienced a pretty strong meltdown as reports from several countries emerged that governments across the board were preparing new and in some cases severe regulations on crypto use and trading.



Indonesia:
Bank Indonesia is taking a firm stance against cryptocurrencies as it urges all parties to refrain from owning, selling or trading the tokens. 
“Owning virtual currencies is very risky and inherently speculative,” the central bank said in a statement Saturday. The digital tokens “are prone to forming asset bubbles and tend to be used as method for money laundering and terrorism funding, so it has the potential to affect financial-system stability and harm the public.” 
The move highlights the challenge faced by regulators as they seek to manage potential risks from the global cryptocurrency mania while lacking the authority to prohibit its use. South Korea’s central bank banned employees from trading cryptocurrencies on the job last week, while China has outlined proposals to discourage bitcoin mining, the process by which the virtual currency enters circulation. - Bloomberg
China:
Chinese authorities are reportedly aiming to completely ban centralized trading of virtual currencies as well as individuals and businesses that provide related services. 
According to an internal memo from a government meeting seen by Reuters, Beijing will continue to apply pressure to the virtual currency trade and prevent the growth of risks in that market. 
National and local authorities should ban venues that provide centralized trading of digital currencies, including bitcoin as the biggest one, Vice Governor of the People’s Bank of China (PBOC) Pan Gongsheng said. 
Regulators need to ban individuals or institutions that provide market-making activities, guarantees, or settlement services for centralized trading of the currencies, such as online “wallet” service providers, he said. – Russia Today
France:
The French minister of the economy, Bruno Le Maire, has announced the creation of a working group to develop cryptocurrency regulations. 
In a speech Monday, Le Maire said that the working group will be responsible for proposing guidelines and drafting a framework on cryptocurrency regulations with the objective being to prevent the technology's misuse, French daily Les Echos reports.
The minister stated: 
"We want a stable economy. We reject the risks of speculation and the possible financial diversions linked to bitcoin." 
Le Maire indicated that the working group will be headed by Jean-Pierre Landau, the former deputy governor of the country's central bank, the Bank of France. 
“Jean-Pierre Landau's mission will be responsible for proposing guidelines on the evolution of regulations and to better control development and prevent their use for the purpose of tax evasion, money laundering or for financing criminal activities and terrorism," he said. 
The move to establish a cryptocurrency working group comes a month after Le Maire proposed a discussion on bitcoin regulation at a G-20 summit in 2018. He said that he will ask Argentina to put bitcoin on the agenda during an upcoming gathering in April. 
"There is evidently a risk of speculation. We need to consider and examine this and see how ... with all the other G20 members we can regulate bitcoin," he stated at the time. - Coindesk
Germany:
Yesterday, a director of Germany's central bank expressed similar sentiment, saying that cryptocurrencies must be regulated at a global scale, not just on a national level.
Brazil:
Brazil has joined fellow BRICS members China and India in taking a tough line on cryptocurrencies by banning them from the country's financial markets. 
The South American country’s securities regulator has prohibited local investment funds from buying digital cash, Reuters reports. Cryptocurrencies cannot be considered financial assets, the regulator ruled. 
Earlier in December, Brazilian authorities published a warning about the risks associated with digital currencies. Brazil has had seven public hearings on bitcoin before finally cracking down on it. 
“According to a study by Credit Suisse, Brazil’s productivity has not risen since 1981, and it’s not going to rise if the government keeps banning everything that can make us more productive,” Brazilian media commentator and popular YouTube blogger RaphaĆ«l Lima said, criticizing the decision. “And with an official 12.4 percent unemployment rate, anything that can generate a job should be welcomed with wide-open arms.” – Russia Today
It is one thing for individual governments to administer domestic policies that affect the buying, selling, mining, and trading of cryptocurrencies within their domains, as investors can simply move to other exchanges to conduct their transactions.  But as more and more nations begin a concerted effort to either regulate or outright ban the use and trading of these digital currencies, the more it will flush out a large portion of investors and potentially relegate the sector back to the fringes, and to the black markets.

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