January 06, 2018
By Luke Bakies - January 05, 2018 (cryptocoinmastery.com)
It is undeniable that Japan has been one of the leaders for Bitcoin over the last few years and it continues to solidify its place as Bitcoin’s heart. Japan has been in the spotlight since the beginning with Bitcoin as founder, Satoshi Nakamoto, is a Japanese name. Japan has been at the forefront of groundbreaking development in Bitcoin, from preserving its longevity to determining how it will be regulated. Despite controversy also associated with Japan with issues like the Mt. Gox implosion which lost over 650,000 Bitcoin, it has remained resilient to push forward for the success of Bitcoin.
The negative events such as Mt. Gox have lead to sweeping reform and regulation to protect customers. The Financial Services Agency (FSA) which is Japan’s regulator, has worked extensively to understand cryptocurrencies to impose fair rules. Their efforts could serve as a basis for the regulation in other countries to protect exchanges and investors.
The Virtual Currency Act has tax reform pertaining to foreign investors, to incentive them to use Japanese exchanges. They also declared Bitcoin an asset and a form of payment but not a legal currency. Lastly they set up licenses for exchanges to create an established market place. These reforms can serve as an outline for future reforms in other countries.
On top of these regulations, Japan has also explored the possibility of expanding blockchain usage within government organizations. They have worked with BitFlyer and are working on a blockchain called “miyabi.” Miyabi boasts the ability to host 4,000 transactions per second with no single point of failure. This could be used with interbank clearing networks to perform faster settlements. With an open mind towards Bitcoin and blockchain, Japan has reaped benefits and it is only a matter of time until other countries follow.
December 14, 2017
By Alyssa Hertig - August 15, 2017 (www.coindesk.com)
Sounds fantastical? Maybe, but Blockstream swears it isn't as crazy as it sounds.
Today, the bitcoin infrastructure company is launching Blockstream Satellite, an ambitious attempt to use leased satellites to beam bitcoin nearly anywhere in the world. Now in beta, bitcoin users in Africa, Europe, South America and North America can already use the satellites to download a working bitcoin node capable of storing the network's entire transaction history.
But while complex conceptually, the company believes its end result can solve a real issue facing the $66 billion network – without internet, you can't access bitcoin.
And this poses a problem for bitcoin proponents who believe the cryptocurrency could be especially beneficial to people without internet, who also generally live in areas with economic instability.
So, Blockstream decided to set its sights on a solution, and found it in space.
According to Blockstream CEO Adam Back, the project is all about putting bitcoin into the hands of those who "desperately need" it.
He told CoinDesk:
"There is some coincidence between countries with poor internet infrastructure and unstable currencies. The people who are in direct need of bitcoin are those who currently have unstable access to bitcoin. This project will address that problem, and, we hope, will allow many more people to use bitcoin."
While running a full node is a cumbersome process, it's nonetheless the most secure and trustless way of using the digital currency, and for individuals dealing with political and economic instability, this process could prove crucial.
But because full nodes require an Internet connection and 160 GB of free space, they are a rarity in some regions of the world. There's allegedly only one man running a full node in all of West Africa, for example.
While Blockstream is now taking care of a way to download a full node, there are a few other choice technologies those that want to take advantage of the satellite will need.
Users will need a small satellite dish – if they already have a TV satellite, they could use that – and a USB to connect the satellite to a personal computer or a piece of dedicated computer hardware such as a Raspberry Pi. The rest can be accessed through free, open-source software, such as GNU Radio for establishing a radio connection.
"The cost to entry is extremely low," said Blockstream's head of satellite, Chris Cook. According to him, the package of equipment costs "a little under $100."
Then, once users have those tools, they can pull bitcoin blocks from the satellite, building a bitcoin full node.
But while they'll now be running a full node, it still takes some sort of Internet connection to make transactions over the network.
While many users in the areas Blockstream is targeting won't be able to afford mobile data connection plans to initiate transactions, Back argued cheaper communications technologies, such as SMS or bi-directional satellite, could be used instead.
Transactions, he said, take up about 250 bytes, which wouldn't cost more than one penny to transfer using such technologies.
In this way, Back's vision of the satellite as bringing bitcoin even to people completely off-the-grid is theoretically possible. He offered the example of a small hut on the side of the road in the Sahara Desert in Africa, adding:
"With a perpetual generator out back with a satellite dish, a Raspberry Pi by the generator, a local wi-fi hot spot, and the necessary software set up, you could be transacting globally with bitcoin."
Sounds like a lot, but Back argued that it would be pretty cheap, especially if costs are pooled between multiple people, like if an entire village shared the costs of setting up the infrastructure that they could then all use.
Monetizing space bitcoin
While it's ambitious as is, Blockstream is taking that mission even further, adding more satellites as the year goes on, with the hope the most people on earth will be able to access a bitcoin satellite by the end of the year.
"The only people that won't be covered are those in Antarctica," Back said.
While the project is technically feasible, though, is it financially so?
Bitcoin is admittedly a different beast, but other Internet space projects don't have a great track record so far. Although, Blockstream does have plans to monetize the satellite.
According to Back, Blockstream will eventually release an API for developers and companies to send data over the satellite connection for a small bitcoin fee.
"That might allow a smartphone wallet that sends messages to send it via satellite or some application to send messages via satellite. That's a way to monetize the infrastructure and to expand to more services on it."
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstream.
Satellite image via Blockstream
December 08, 2017
By Olga Kharif - December 08, 2017 (www.bloomberg.com)
|Illustration: Patrik Mollwing for Bloomberg Businessweek|
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency.
Holders of large amounts of bitcoin are often known as whales. And they’re becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year.
About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. (Brown is a contributor to the Bloomberg Prophets online column.) What’s more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.
“I think there are a few hundred guys,” says Kyle Samani, managing partner at Multicoin Capital. “They all probably can call each other, and they probably have.” One reason to think so: At least some kinds of information sharing are legal, says Gary Ross, a securities lawyer at Ross & Shulga. Because bitcoin is a digital currency and not a security, he says, there’s no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes.
Bitcoin: What’s Coming in the Year Ahead
Regulators have been slow to catch up with cryptocurrency trading, so many of the rules are still murky. If traders not only pushed the price up but also went online to spread rumors, that might count as fraud. Bittrex, a digital currency exchange, recently wrote to its users warning that their accounts could be suspended if they banded together into “pump groups” aimed at manipulating prices. The law might also be different for other digital coins. Depending on the details of how they are structured and how investors expect to make money from them, some may count as currencies, according to the U.S. Securities and Exchange Commission.
Asked about whether large holders could move in concert, Roger Ver, a well-known early bitcoin investor, said in an email: “I suspect that is likely true, and people should be able to do whatever they want with their own money. I’ve personally never had time for things like that though.”
“As in any asset class, large individual holders and large institutional holders can and do collude to manipulate price,” Ari Paul, co-founder of BlockTower Capital and a former portfolio manager of the University of Chicago endowment, wrote in an electronic message. “In cryptocurrency, such manipulation is extreme because of the youth of these markets and the speculative nature of the assets.”
The recent rise in its price is difficult to explain because bitcoin has no intrinsic value. Launched in 2009 with a white paper written under a pseudonym, it’s a form of digital payment maintained by an independent network of computers on the internet‚ using cryptography to verify transactions. Its most fervent believers say it could displace banks and even traditional money, but it’s only worth what someone will trade for it, making it prey to big shifts in sentiment.
Like most hedge fund managers specializing in cryptocurrencies, Samani constantly tracks trading activity of addresses known to belong to the biggest investors in the coins he holds. (Although bitcoin transactions are designed to be anonymous, each one is associated with a coded address that can be seen by anyone.) When he sees activity, Samani immediately calls the likely sellers and can often get information on motivations behind their sales and their trading plans, he says. Some funds end up buying one another’s holdings directly, without going into the open market, to avoid affecting the currency’s price. “Investors are generally more forthcoming with other investors,” Samani says. “We all kind of know who one another are, and we all help each other out and share notes. We all just want to make money.” Ross says gathering intelligence is legal.
Ordinary investors, of course, don’t have the cachet required to get a multimillionaire to take their call. While they can track addresses with large holdings online and start heated discussions of market moves on Reddit forums, they’re ultimately in the dark on the whales’ plans and motives. “There’s no transparency to speak of in this market,” says Martin Mushkin, a lawyer who focuses on bitcoin. “In the securities business, everything that’s material has to be disclosed. In the virtual currency world, it’s very difficult to figure out what’s going on.”
Ordinary investors are at an even greater disadvantage in smaller digital currencies and tokens. Among the coins people invest in, bitcoin has the least concentrated ownership, says Spencer Bogart, managing director and head of research at Blockchain Capital. The top 100 bitcoin addresses control 17.3 percent of all the issued currency, according to Alex Sunnarborg, co-founder of crypto hedge fund Tetras Capital. With ether, a rival to bitcoin, the top 100 addresses control 40 percent of the supply, and with coins such as Gnosis, Qtum, and Storj, top holders control more than 90 percent. Many large owners are part of the teams running these projects.
Some argue this is no different than what happens in more established markets. “A good comparison is to early stage equity,” BlockTower’s Paul wrote. “Similar to those equity deals, often the founders and a handful of investors will own the majority of the asset.” Other investors say the whales won’t dump their holdings, because they have faith in the long-term potential of the coins. “I believe that it’s common sense that these whales that own so much bitcoin and bitcoin cash, they don’t want to destroy either one,” says Sebastian Kinsman, who lives in Prague and trades coins. But as prices go through the roof, that calculation might change.
BOTTOM LINE - It’s not necessarily illegal for big holders of some cryptocurrencies to discuss trading with one another. That puts small buyers at a disadvantage.
December 01, 2017
By Marc Hochstein - November 29, 2017 (www.coindesk.com)
The former chief economist of the World Bank wants bitcoin banned.
"Bitcoin is successful only because of its potential for circumvention, lack of oversight," Joseph Stigliz, currently a professor at Columbia University, said in an interview on Bloomberg Television today, as the cryptocurrency reached new all-time highs this week.
Because of this, he added:
"So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function."
However, Stiglitz, who also chaired the U.S. President's Council of Economic Advisers during the Clinton Administration, said he does support technological innovation in payments, but thinks digital money should still be fiat created and controlled by the government.
"Let’s move away from paper into the 21st century of a digital economy," he said.
Like many other members of the Davoisie, Stiglitz – who won the Nobel Memorial Prize in Economic Sciences in 2001 – called the run-up in bitcoin's price unjustified and unsustainable.
"It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down," he said. "The value of a bitcoin today is expectations of what the bitcoin is going to be tomorrow."
And even though bitcoin is a decentralized network, with participants scattered around the globe, Stiglitz seemed to think Washington could easily nip it in the bud.
"If the government says 'the reason bitcoin is being used is circumvention,' they could close it down at any moment," he said. "And then it collapses."
You can watch the clip here:
Joseph Stiglitz photo via Wikimedia Commons.
By Torsten Hoffmann - April 30, 2015 (www.youtube.com)
Bitcoin: The End Of Money As We Know It traces the history of money from the ancient world to the trading floors of Wall St. The documentary exposes the practices of central banks and the dubious financial actors who brought the world to its knees in the last crisis.
It highlights the Government influence on the money creation process and how it causes inflation. Moreover, this film explains how most money we use today is created out of thin air by banks when they create debt.
Epic in scope, this film examines the patterns of technological innovation and questions everything you thought you knew about money.
Is Bitcoin an alternative to national currencies backed by debt?
Will Bitcoin and cryptocurrency spark a revolution in how we use money peer to peer?
Is it a gift to criminals?
Or is it the next bubble waiting to burst?
If you trust in your money just as it is... this film has news for you.
By Kevin Helms - December 01, 2017 (news.bitcoin.com)
The Russian Association of Blockchain and Cryptocurrency has partnered with representatives of 30 countries to develop a global ratings standard for initial coin offerings (ICOs). The association is also in talks with the Russian central bank to impose limits on ICO investments.
Russia Developing Global ICO Ratings Standard
The Russian Association of Blockchain and Cryptocurrency (RACIB) has announced that they will be developing a uniform ratings standard for ICOs, Izvestia newspaper reported this week.
The association was established with the participation of Herman Klimenko, the adviser to the President of the Russian Federation on Internet development. Its goal is to unite blockchain participants as well as owners, miners, and investors of cryptocurrencies and ICOs.
The director of the association, Arseny Shchetsin, told the news outlet that this development “will become the first in the world standard of ratings in the field of ICO,” noting that it will be applicable to not only Russian companies but also foreign ones. Currently, the industry operates on a self-regulation basis with each ratings agency adopting its own ratings system. RACIB decided to develop a standard because there is “a large number of scammers who manipulate the ratings” in the ICO market, using “unknown methodology and for a fee to raise the score,” he explained.
To develop this global standard, RACIB entered into partnership agreements with 30 organizations, which it considers “the largest players in the industry from different countries,” the publication conveyed, adding that:
"The association cooperates with representatives of Germany, Switzerland, Australia, Singapore, India, Bahrain, Kazakhstan, Ireland, Poland, Czech Republic, Turkey, Latvia, Indonesia, Lithuania, Malaysia, Estonia, etc. The requirements of the Russian standard are planned to be coordinated with the international community".
Restrictions on ICO Investments
Also this week, Vladimir Putin’s advisor on Internet development, Herman Klimenko, said that the association is discussing ICO investment restrictions with the central bank, Rambler News Service reported. According to him, an investment ceiling as low as $1,000 per project and $10,000 per year are being discussed.
“Collecting an amount of $2-5 million with such restrictions is very easy. The state, naturally, will not legalize the crowdfunding projects in the amount of $200-300 million for one project,” he elaborated. “But some reasonable limitations for medium-sized businesses, I think, are quite realistic for them,” he emphasized and was quoted saying:
"What we are now talking about with the central bank is a certain restriction on the maximum amount of attracting, for example, from a person, and restrictions in general per person per year".
Images courtesy of Shutterstock and RACIB.
November 29, 2017
By Rebecca Campbell - November 29, 2017 (www.cryptocoinsnews.com)
The vice president of the European Central Bank (ECB) has said that investors are taking a ‘risk’ by buying bitcoin at its high price.
Speaking to CNBC on Wednesday, Vitor Constancio, said:
"It’s a very particular asset, it’s a speculative asset by definition looking to the developments in its price. Investors are taking that risk of buying at such high prices".
Constancio’s comments come at a time when the digital currency is experiencing a surge in value. Earlier today, it was reported that bitcoin had risen to over $11,000 along with a rise in various alt-coin prices. To date, the cryptocurrency has increased by over 1,000 percent, a colossal undertaking considering it was trading at $1,000 at the beginning of the year, and has overcome numerous obstacles.
Some, though, are still expecting great things from bitcoin. Mike Novogratz, a billionaire investor and hedge fund manager, believes that it could ‘easily’ rise to $40,000 by the end of 2018. However, at a recent conference in New York, he stated that it wouldn’t be easy getting there, adding:
"There will be wild crashes in it because you’re going to get to levels so far ahead of where the technology’s at".
Central banks, though, have continually been reluctant to embrace the market. The ECB vice president said earlier this month that digital currencies will never replace the fiat system, adding that they were a ‘misnomer‘ merely used as a speculative asset.
At the time, he stated:
"The so-called private ‘cryptocurrencies’ can never prevail as general money substitutes".
Mario Draghi, the ECB President, has also spoken about the digital currency market, claiming that they aren’t ‘mature‘ enough for the central bank to consider regulating them. More recently, Draghi stated that they pose little threat to the central bank-dependent financial system, despite the rise in the cryptocurrency market.
Not only that, but Constancio believes that central banks don’t need to take the digital currency market seriously. During the interview, he said:
"… in the sense that we don’t have responsibility or even instruments that point to particular prices of particular assets, that is certainly not the role of central banks".
Yet, regardless of the fact that the crypto market, in particular bitcoin, have been criticised by various financial CEOs, it looks as though it has its foot firmly in the door and isn’t going away anytime soon. Not only that, but we may soon be reading headlines that the combined crypto market has become more valuable than JPMorgans.
Featured image from Shutterstock.
November 28, 2017
Bitcoin is a perfect currency, Beyond the reach of any nation-state or cooperative effort to defeat it - Max Keiser
By Ashour Iesho - November 27, 2017 (bitcoinist.com)
Although many experts still believe that Bitcoin, and the cryptocurrency market as a whole, may be in a bubble state, Max Keiser believes that Bitcoin still has room to grow.
CAN BITCOIN REACH $25,000?
Bitcoin is making headlines – again – as it continues to shatter milestone after milestone. Most recently, the popular digital currency passed the $9000 mark and is quickly edging toward $10,000. According to a recent article by RT, well-known American TV broadcaster Max Keiser believes that Bitcoin still has the potential to climb as high as $25,000 before having a correction.
"Up until that price is achieved it looks like we’ll see a pretty strong upward move".
He also believes that the huge inflation rate of major fiat currencies like the US dollar is causing Bitcoin to rapidly rise.
"I think we are seeing fiat currencies in a hyperinflationary collapse against bitcoin".
Keiser posits that one of the reasons behind Bitcoin’s price surge is because it is the perfect alternative to traditional financial systems that are used by banks and other financial institutions:
"Bitcoin is a perfect currency, something that is utterly changing the global finance and market and is putting banksters and the central banks out of business".
Many banks have expressed their desire to work with blockchain technology, but most of them are not yet open to Bitcoin and other cryptocurrencies. The reason behind their reluctance is the fact that banks cannot regulate – and therefore cannot control – the popular decentralized cryptocurrency.
GOVERNMENTS CAN’T STOP IT
Another interesting use case for Bitcoin is bypassing government controls and sanctions. Since many countries around the world are currently under financial sanctions, Bitcoin is an easy and efficient way for them to surpass these restrictions. Max Keiser thinks that the fact that governments can’t stop Bitcoin, is giving it immensely value and trust.
"That’s something that no central bank or country will be able to stop, and it’s becoming a real scenario, a real threat".
An interesting remark that Keiser made in the article, is that Bitcoin might become a “financial black hole” where people are rushing to sell stocks and bonds and transfer that money into the decentralized cryptocurrency. If that happens, there is the very real possibility of a stock market or bond market crash, perhaps even both.
Images courtesy of Shutterstock, Pixabay, Wikimedia Commons.
Interesting Tweets from Max Keiser on Bitcoin:
November 27, 2017
By Samuel Haig - November 27, 2017 (news.bitcoin.com)
Governments across Africa are striking a firm tone regarding bitcoin and cryptocurrencies, with Algeria’s congress expected to ban all cryptocurrencies, and Kenya’s central bank warning against the risks of cryptocurrency, and an advisor to Ghana’s ministry of communications describing “fear of the unknown” as the principal barrier to greater adoption of virtual currencies. In other news, a Kenyan man has negotiated to pay the ‘goat portion’ of his dowry using bitcoin.
Kenyan Central Bank Fears Bitcoin May Comprise “Ponzi Scheme”
The Governor of the Central Bank of Kenya (CBK), Dr. Patrick Njoroge has warned Kenyans against the risks and lack of protections afforded to cryptocurrency traders. Referring to a previous warning issued in 2015, Dr. Njoroge stated that the CBK “warned everybody that this was a risky venture and the consumer is not protected. It could very well be a Ponzi scheme of a kind, I think you have seen how the prices have gone up and down in various places. Our point is that there is risk and it is important that everybody knows that those risks can come back to haunt us and could have financial stability concerns.”
Despite the warning, Dr. Njoroge recently expressed his hesitance to rush to regulate cryptocurrencies, describing the CBK as being “open” to innovations in financial technology. Speaking at the recent Global Financial Forum in Dubai, Dr. Njoroge stated: “If you’re the regulator, you have to be careful that all risks are taken care of, including in cryptocurrencies, but we’re very open to innovation.”
Kenyan Citizen Arranges to Partially Pay Dowry Using Bitcoin Rather Than Goats
The topic of bitcoin has been in Kenya’s news cycle recently, following Kenyan citizen, Anthony Mburu’s decision to pay a portion of his dowry using bitcoin. The young bitcoin miner negotiated to pay the ‘goats portion’ of his dowry using bitcoins – and has so far paid the equivalent of 25 of the 100 required goats.
The 26-year-old Mr. Mburu quit university in 2010 only one semester into an engineering course. Mr. Mburu recently discussed his decision with Kenyan media, stating “Formal education is good. It will give you an average life. You’ll eat, have your mortgage, car loan and all that — live an average life; struggle through life to the end.” Since discovering the cryptocurrency, Mr. Mburu states that his entire life has come to revolve around bitcoin. “Everything is bitcoin. Where I live, bitcoin; what I drive, bitcoin; investment, bitcoin. It will be a bitcoin wedding,” he said.
“Fear of the Unknown” Hinders Ghanan Bitcoin Adoption
Ghana’s cybersecurity advisor to the ministry of communications, Albert Antwi Boasiako, has described “fear of the unknown” as the principal barrier to greater cryptocurrency adoption throughout the African nation. Speaking at the recent Ghana Blockchain Conference, Mr. Boasiako stated “We have our fears about cryptocurrency but discussions are still going on. Our country is still hesitant to adopt Bitcoin as a legal tender is the fear of the unknown.”
Mr. Boasiako emphasized the need for Ghana’s tech community to mobilize in order to demystify cryptocurrencies, stating “We are battling fear, the state doesn’t want to move forward because it doesn’t know what’s there. To demystify cryptocurrency, we need a community-driven agenda. We need to strategically demystify the misconceptions around cryptocurrency and get it integrated into the government digitization agenda.” Mr. Boasiako suggested the establishment of a “working group on cryptocurrency that has members from stakeholders like the Bank of Ghana,” recommending that such a body should closely monitor developments in the sphere of cryptocurrency regulation in other jurisdictions.
Algeria Expected to Ban All Cryptocurrencies
Last month, it was reported that Algeria’s congress had begun to consider new financial legislation that would see all cryptocurrencies banned throughout the country. The ‘2018 Finance Bill’ states that “The purchase, sale, use, and holding of the so-called virtual currency is prohibited. The virtual currency is the one used by Internet users through the web. It is characterized by the absence of physical support such as coins, banknotes, payments by check or bank cards,” specifying that “Any violation of this provision is punished in accordance with the laws and regulations in force.”
An accompanying memorandum emphasizes the concerns that bitcoin’s potential anonymity sparks among Algerian lawmakers, stating “Algeria hopes to establish a stricter control over this kind of digital transaction, which can be used for drug trafficking, tax evasion, and money laundering thanks to the guaranteed anonymity of its users.” The document asserts that despite cryptocurrencies having “long been the prerogative of illegal transaction,” they are able to “get rid of their bad reputation in democratizing and attracting a wider audience.”
Images courtesy of Shutterstock, Wikipedia
Samuel Haig is a cryptocurrency and economics journalist who has been passionately involved in the bitcoin space since 2012. Samuel has written about the disruptive potential of cryptocurrency with regards to the dialectical relations within contemporary neoliberal capitalism.
November 24, 2017
By Samburaj Das - November 24, 2017 (www.cryptocoinsnews.com)
The securities and financial regulators of Australia and Dubai respectively have entered a mutually beneficial agreement to cooperate on and promote financial technologies (FinTech) in each other’s markets.
Inking the terms yesterday, the Dubai Financial Services Authority (DFSA) and the Australian Securities and Investment Commission (ASIC) will jointly work on a collaborative framework toward FinTech innovation. Notably, the regulatory framework will lower the burden for industry startups and businesses to enter each other’s markets, aided by the authorities for regulatory compliance. ‘It provides Australian fintech businesses wishing to operate in the DIFC with a simple pathway for engaging with DFSA, and vice versa,’ reads an excerpt from the ASIC’s announcement.
DFSA chief executive Ian Johnston added:
"[The] agreement underscores our commitment to maintaining strong channels of communication with our regulatory peers and creates a regulatory framework that supports the latest developments in FinTech innovation".
The terms of the agreement also mandate the two authorities to share information on innovative FinTech developments in each other’s markets. A particular area of focus, the ASIC revealed, is regulatory technology (RegTech) with trials expected to occur between the regulators.
“Regtech is becoming more and more important – this is a new frontier in our bilateral cooperation that will benefit both regulators and businesses,” ASIC Commissioner John Price said upon signing the agreement.
The DFSA regulates the Dubai International Financial Centre (DIFC), a sprawling financial free-zone district that allows foreign companies to hold 100% ownership in Dubai, without the need of a local partner. Earlier this year, the authority outlined its approach to embrace the FinTech sector stating it will not regulate industry startups and companies unless needed. To that end, the authority lowered its scrutiny of the sector with a special new FinTech license that allows the testing of innovative products and services between a 6 to 12-month period.
Featured image from Shutterstock.
By Joshua Althauser - November 24, 2017 (cointelegraph.com)
The Malaysian central bank, Bank Negara Malaysia (BNM), is expected to issue a directive to regulate the use of digital currencies in the country in early 2018. The central bank has been discussing and working on a proposed cryptocurrency regulation for some time now and this new development is expected to be hailed by industry players.
According to BNM Governor Tan Sri Muhammad Ibrahim, the introduction of regulations for virtual currencies are intended to prevent abusing the system for criminal and illegal activities and to maintain the stability and integrity of the financial system.
“The advent of digital currencies as some have forecast will mark the beginning of a new era in the financial sector. As authorities, we cannot be oblivious to these developments….The banking sector needs to adopt the latest and most advanced technologies to improve its risk management framework.”
Possible impact(s) of the new regulations on the cryptocurrency market
Under the regulations, individuals who convert their virtual currencies into fiat currencies will be considered as reporting institutions and will be subjected to Malaysia’s Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act of 2001. This means that cryptocurrency transactions will be subjected to laws similar to those imposed on banks.
However, the implementation of regulations as a guide for digital currencies would not automatically mean that the virtual tokens are already accepted as legal tender in the country. It is just seen as an indication that the central bank is keeping an open mind on the new wave of innovative technologies being introduced in the financial sector.
By Samuel Haig - November 25, 2017 (news.bitcoin.com)
South Korea’s Financial Supervisory Service has stated that it won’t regulate the digital token markets due to cryptocurrencies not comprising a legally recognized financial instrument. In central bank news, Zimbabwe’s central bank has stated that bitcoin is not legal, and Singapore’s central bank has launched the second public consultation for its newly proposed payments legislation. Here’s a regulator round-up.
South Korea’s Financial Regulator Does Not Plan on Regulating Cryptocurrencies
The Governor of South Korea’s Financial Supervisory Service (FSS), Mr. Choe Hueng-sik, has indicated that the FSS does not consider bitcoin and other digital tokens to comprise legitimate currency, and as such, will not regulate the cryptocurrency markets.
The governor likened the FSS’s stance to its regulatory position regarding casinos, stating “It is the same with the fact that we don’t regulate or supervise casinos. Though there could be concerns on excessive gambling, that does not provide grounds for the FSS to control casino practices.”
The governor indicated that the FSS’s position would change only if cryptocurrencies were to become a legitimately recognized currency, stating “Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges. Supervision will come only after the legal recognition of digital tokens as a legitimate currency.”
Reserve Bank of Zimbabwe States Bitcoin “Is Not Actually Legal”
Norman Mataruka, the Reserve Bank of Zimbabwe’s (RBZ) director and registrar of banking institutions, has told reporters that bitcoin is not legal. Mr. Mataruka stated:
“In terms of the bitcoin, as far as we are concerned, it is not actually legal. In Southern Africa, what we have done as regulators, we have said that we will not allow this in our markets… Research is currently being undertaken to ascertain the challenges and risks associated with these particular products and until we have actually established and come up with a legal and regulatory framework for them, it will not be allowed.”
The announcement comes shortly after the resignation of Robert Mugabe, following a coup that ousted Zimbabwe’s former leader of 37 years. In recent months, increasing coverage has been given to the inflated price of bitcoin in the African nation, with high demand for the cryptocurrency being driven by Zimbabwe’s prevailing currency crisis.
Although Mr. Mataruka failed to clarify if he meant that the possession and use of bitcoin was illegal, or simply that bitcoin does not comprise a legally recognized currency in the state of Zimbabwe, it is unlikely that the RBZ can spare the resources required to attempt to uphold prohibitive cryptocurrency regulations given Zimbabwe’s current political turmoil.
Singapore’s Central Bank Seeks To “Streamline” Payment Regulations to Include Cryptocurrencies
The Monetary Authority of Singapore (MAS), has launched its second public consultation regarding a newly proposed regulatory framework, the “Payment Services Bill”. The bill seeks to “streamline the regulation of payment services under a single legislation,” and “expand the scope of regulated payment activities to include virtual currency services and other innovations, and calibrate regulation according to the risks posed by these activities.” The MAS stated:
“When the new Bill is enacted, payment firms will only need to hold one license under a single regulatory framework to conduct any or all of the specified payment activities. Only payment activities that face customers or merchants, process funds or acquire transactions, and pose relevant regulatory concerns will need to be licensed. The new framework will expand the scope of regulation to include domestic money transfers… merchant acquisition… and the purchase and sale of virtual currencies… To help ensure that the expanded scope of regulation is not onerous, the Bill will differentiate regulatory requirements according to the risks that specific payment activities pose rather than apply a uniform set of regulations on all payment service providers… The Bill will empower MAS to regulate payment services for money-laundering and terrorism financing risks.”
Mr. Ravi Menon, the managing director of the MAS, stated: “We want to put in place a forward-looking regulatory regime to encourage wider adoption of secure e-payment solutions.” The public consultation will run from 21 November 2017 to 8 January 2018.
Images courtesy of Shutterstock, Wikipedia
Samuel Haig is a cryptocurrency and economics journalist who has been passionately involved in the bitcoin space since 2012. Samuel has written about the disruptive potential of cryptocurrency with regards to the dialectical relations within contemporary neoliberal capitalism.
November 23, 2017
By C. Edward Kelso - November 23, 2017 (news.bitcoin.com)
In order “to prevent the abuse of the system for criminal and unlawful activities and ensuring the stability and integrity of the financial system,” Bank Negara Malaysia Governor Tan Sri Muhammad Ibrahim stated 22 November 2017 that those trading in cryptocurrencies will be placed under the country’s existing anti-money laundering laws.
Malaysia Cites Terrorism Fear
Joseph Chin of The Star Online reports, “Bank Negara Malaysia is developing the regulatory structure for digital currencies, and from 2018 persons converting crypto currencies into fiat money currencies will come under anti-money laundering law,” he notes. Such persons “would be designated as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.”
The central bank’s Governor made his remarks at the Third Counter-Terrorism Financing Summit. It’s a four day conference organized by the bank, partnering with “Australia’s financial intelligence agency, AUSTRAC, and Indonesia’s Pusat Pelaporan dan Analisis Transaksi Keuangan (PPATK),” the website press release read.
The gathering brings “together more than 350 specialists and professionals from 35 countries and international organisations to share their insights on the latest terrorism financing (TF) issues and developments,” they emphasize.
Mr. Ibrahim’s talk was titled, Readying the Financial Sector Amid the Evolving War on Terrorism Financing, saying in part, “regulators must prepare themselves as digital currencies will become the new norm,” The Star Online paraphrased.
“We must harness the vast potential in technological innovations,” the central banker warned, “to reinvent and reinforce our lines of defence.”
Terrorism in Malaysia has a storied and long history, and is beyond the scope of the present article. But it is safe to write terrorism is something the Malaysian government can claim as a concern, regardless of it as pretext in the case of bitcoin.
“We need new tools,” Mr. Ibrahim said. “The adoption of artificial intelligence, machine learning, and big data technology are tools that would likely be imperative, as suspicious transactions become more complex and harder to detect,” he listed.
The Star Online notes further how the central bank head “said the advent of digital currencies, as some have forecast, will mark the beginning of a new era in the financial sector.”
Remittances Come Under Scrutiny
One undeniable area of bitcoin’s power resides in its ability to essentially be borderless, allowing those who wish to send money back to their home countries a frictionless experience for the most part.
Mr. Ibrahim is reported to have said “Bank Negara was in the midst of finalising the details of a new requirement for the Banking and Money Services Business sector to report remittances in high risk areas.”
“The high risk areas will be determined based on the law enforcement agency’s intelligence on areas that they view may pose higher risks for funding of terrorism activities,” The Star Online summarized.
The central bank hopes to incorporate more shared international intelligence on suspicious transactions.
As always, what exactly constitutes “high risk areas” and “suspicious transactions” is often left vague by government regulators. It appears to be the same in Malaysia.
A resident of Malaysia told news.bitcoin.com, “Laws are more like guidelines in Malaysia, the people just make their own decisions on what they want to follow. Even if crypto was banned people wouldn’t care. Technically [the song] ‘Despacito’ is banned in Malaysia,” he laughed.
Images courtesy of: Pixabay, BNM. Marcel Chuo contributed sourcing for this article.
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November 17, 2017
By Arjun Kharpal - November 17, 2017 (www.cnbc.com)
- Bitcoin hit a new record high Friday and was within touching distance of the $8,000 handle
- Coinbase said that there was still a possibility of a planned Segwit2x upgrade happening that would cause bitcoin to split and create a new cryptocurrency
- The possibility of the Segwit2x upgrade appeared to be the catalyst for the rally
Bitcoin hit a new record high Friday, coming within touching distance of the $8,000 handle.
The cryptocurrency was trading at $7,998.40 in the early hours, U.K. time, according to industry website CoinDesk. Bitcoin did pare some of those gains, however, falling as low as $7,535.85; it was trading around $7,750 by mid-morning.
It's been a wild week for bitcoin, which sold off heavily last weekend, falling to around $5,500. Since Sunday, the cryptocurrency has risen from that low to Friday's high, marking a 45 percent increase.
In that time, bitcoin's market capitalization, or the total value of the digital coins in circulation, has risen from $92 billion to $133.5 billion, according to Coinmarketcap.com.
The price dip last weekend came after an upgrade to the bitcoin network, SegWit2x, which was planned for November 16, was called off. The aim was to increase the transaction speeds of SegWit2x, which has increasingly slowed down over the years. If the upgrade took place, it would have caused what is known as a "hard fork," causing a new bitcoin spin-off to be formed.
Two previous forks have already happened earlier this year, leading to the creation of bitcoin cash and bitcoin gold.
But support for the Segwit2x upgrade waned, causing developers to call off its planned implementation.
This appeared to be the initial catalyst for the sell-off.
But on Friday, Coinbase, one of the world's largest cryptocurrency exchanges, said there is still a possibility of a fork.
David Farmer, director of communications at Coinbase, said on a blog post that a "small number of miners may attempt to go forward with a fork."
A miner is a key part of the bitcoin network. It is a person who runs a "node", or a high-powered computer that is able to solve the complex mathematical equitation required to verify bitcoin transactions.
If a large number of miners upgrade the software on their nodes, it could cause a fork. Farmer warned that this small number of miners still supporting the Segwit2x proposal could cause a fork.
If a fork happens, holders of bitcoin will receive the newly-created cryptocurrency called "bitcoin2x" for free, essentially giving them free money. That is why bitcoin rallied Friday.
Coinbase said that it will disable the function of sending and receiving bitcoin at 2 a.m. PT on Friday on its platform, and halt buying and selling an hour before the fork, which is forecast between 6 a.m. and 8 a.m. PT.
All functionality will be re-enabled shortly after, Farmer said.
The Coinbase communications executive said that there are two scenarios that could occur. The first is that the new bitcoin2x network is unusable because there is not enough support, in which case Coinbase will not facilitate trading or withdrawals because "it will not be possible to move these assets." Farmer said that this is the most likely outcome.
The second scenario is that the bitcoin2x network is usable because miner support is strong.
Bitcoin has had a rocky year but the price has continued to rise and is up around 700 percent. But many critics have thrown cold water on the rise of the cryptocurrency, with JPMorgan Chase CEO Jamie Dimon calling it a "fraud". Regulators in some countries have also cracked down on bitcoin trading, with China banning bitcoin exchanges.
November 16, 2017
By Samburaj Das - November 16, 2017 (www.cryptocoinsnews.com)
The Indian Supreme Court has called on the central government to set to task the process of regulating bitcoin.
According to Indian news daily The Hindu, three justices from India’s Supreme Court – the highest court in the country – have issued notices to the Finance, Law and Justice and Information Technology ministries, as well as the central bank (Reserve Bank of India) and market regulator (Securities and Exchange Board of India), demanding they respond to a petition seeking clarity on bitcoin’s legality in the country.
As reported yesterday, India’s Supreme Court admitted a petition calling for authorities to “regulate the flow of Bitcoin”, which, in essence, would mean regulating the nascent but growing Indian bitcoin industry.
Bitcoin isn’t classified as a legal method of payment or a financial instrument in India. The official stance by the central bank, last revealed in February this year – a lazy rehash of a previous statement from 2013 – states the authority hasn’t licensed or authorized any companies dealing with bitcoin. Investors or adopters of bitcoin and cryptocurrencies would be doing so at their own risk, the central bank warned. All the same, bitcoin isn’t illegal in India, either.
The petition, which seeks to end the ambiguity, goes on to state that ‘domestic bitcoin exchanges have been adding over 2,500 users a day and had reached five lakh (500,000) downloads. The lack of regulation led India’s ‘big four’ bitcoin exchanges to establish a self-regulatory body earlier this year. Since then, Indian authorities established an inter-disciplinary ‘Virtual Currency Committee’ to study and develop frameworks for cryptocurrencies in India.
India’s Supreme Court has previously called on the government to check for bitcoin transactions in relation to money laundering and terrorism funding. The petition, which convinced Supreme Court justices to put several government ministries as well as the central bank on notice, concluded with the plea to “issue urgent directions” toward regulating bitcoin transaction flows “to ensure” they are accountable.
Featured image from Shutterstock.
November 13, 2017
By Kai Sedgwick - November 13, 2017 (news.bitcoin.com)
Bitcoin is a phenomenon that provokes conflicting emotions in people. Fear. Excitement. Elation. Doubt. For governments tasked with regulating every new thing that comes along, be it the motor car or the internet, bitcoin presents a conundrum. How to regulate such a seemingly unregulatable creation? While many western governments have reached for the button marked “Fear”, Japan has taken the reverse approach.
Land of the Rising Coin
Bitcoin has been an officially legal payment method in Japan since April, when 4,500 stores began accepting the cryptocurrency, and leading financial newspaper, the Nikkei, tips that figure to increase five-Japan Teaches Western Governments a Lesson in Cryptocurrency Regulationfold by the end of the year. Japanese shoppers can spend bitcoin in a range of stores including electronics giant Bic Cam and bitcoin signs are displayed prominently, helping to raise awareness. BTMs – ATMs that exchange fiat for bitcoin – are scattered throughout the country, and there’s even the ability to pay utility bills complete with a special bitcoin discount via Remixpoint.
Following the Mt Gox collapse, in which the country’s (and indeed the world’s) largest bitcoin exchange liquidated, losing 850,000 bitcoins, Japanese regulators stepped in. Rather than try to stem the use of cryptocurrency, they enacted regulations which mandated exchanges to maintain capital reserves, keep customer funds separate, and implement KYC procedures. Meanwhile, many western governments have dithered over cryptocurrency regulation.
Regulators Mount Up
This week, Donald Trump’s treasury secretary issued his first public comments about bitcoin – and they weren’t exactly glowing. His primary concern was with ensuring that bitcoin couldn’t be used
|Encryption is bad, m’kay?|
These accusations aren’t just limited to bitcoin of course. Cryptography as a whole is the bugbear of many western governments, with British and US leaders in particular expressing frustration that backdoors can’t be built into encrypted messaging platforms such as Whatsapp. Bitcoin is mercifully free from centralized attempts at meddling with code, but that hasn’t prevented governments from restricting entry and exit points from the fiat world. Officials haven’t lain the banhammer on bitcoin, but they’ve done little to support it.
Opportunity or Threat?
Japan is a tech-savvy nation whose elected officials have a better appreciation of the transformative power of emerging technologies than most. It follows that the more digitally-inclined countries should be among the first to embrace cryptocurrency. In Europe, Estonia, with its e-Residency digital passports, is another country that’s been positive towards cryptocurrency.
“Bitcoin regulation” can mean very different things in different countries. In Japan it means taking measures to safeguard citizens whilst encouraging the responsible use of bitcoin and enabling crypto companies to get on with business. In other developed nations, however, “bitcoin regulation” is a euphemism for “anti-money laundering”.
Thumbs Down From Down Under
“Australia follows Japan in move to regulate bitcoin” ran the headline in the Financial Times. It all sounds so promising, but delve into the story and it becomes evident that Australia is not about to start rolling out BTMs and putting up bitcoin signs in its retail stores.
“Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated businesses in Australia to comply with our comprehensive regime,” states the country’s justice minister in Orwellian terms.
Japan hasn’t been shy when it comes to weighing in on bitcoin, as its stringent KYC regulations and new ICO guidelines show. But it’s tempered this with an open invitation to exchange owners, entrepreneurs, crypto pioneers, and bitcoin enthusiasts that says “We’re open for business”. Western governments could learn a lot.
Images courtesy of Shutterstock, and Whatsapp.
Kai's been assembling words for a living since 2009 and involved with bitcoin since 2013. He's previously written white papers for blockchain companies and is especially interested in P2P exchanges and DNMs.