On December 5, the Reserve Bank of India (RBI), the country’s central bank, cautioned investors of bitcoin, clarifying that the government is yet to regulate bitcoin and cryptocurrency exchanges within the local market.
“Bitcoin is thrown to the wolves,” the headline reads, punctuating the tail end of Saxo Bank’s prediction that the bitcoin price will soar above $60,000 in 2018 before crashing more than 98 percent to “its fundamental ‘production cost’ of $1,000.
Recently, various reports have been suggesting that China’s crackdown on cryptocurrencies will extend to mining, as state-run Sichuan Electric Power Corporation reportedly distributed a circular ordering grid-connected hydropower stations to stop supplying low-cost electricity to bitcoin mining operations. As reported by CCN, the report has been debunked as the company admitted it made several mistakes, including using unverified claims, on its circular.
Throughout this week, false reports regarding the legality of bitcoin and cryptocurrency mining have emerged. Local sources have revealed that bitcoin mining is not banned as of yet.
Unconfirmed Reports and Rumors
Initially, Sichuan Electric Power Company, released an unconfirmed circular which claimed that the use of electricity to produce and mine bitcoin is illegal. Caijing, an independent news publication based in Beijing, first reported on the circular released by Sichuan Electric Power Company, and more media outlets followed.
China’s Sichuan province is gearing up to extend its bitcoin ban to mining operations as part of its wider crackdown on the cryptocurrency industry.
According to local media outlet Tencent Finance, the state-run Sichuan Electric Power Corporation has distributed a circular ordering grid-connected hydropower stations to stop supplying low-cost electricity to bitcoin mining operations.
Because mining has become so competitive, few ordinary bitcoin users can make a profit mining the cryptocurrency.
The Big Bang Theory, one of the most popular sitcoms in history with 17 million average viewers for its latest season 11, will dedicate an entire episode on bitcoin.
Episode 9 of the Big Bang Theory season 11, which will air on November 30, 2017, is entitled “The Bitcoin Entanglement,” and analysts expect the show to introduce bitcoin to the mainstream, to an important consumer base for bitcoin. The Big Bang Theory is most watched amongst viewers in the age group of 19 to 35, which is a relatively young viewership for a popular sitcom.
The lead researcher at China’s central bank has claimed that a central bank cryptocurrency should be developed and issued at the earliest in the country.
According to statements reported by the South China Morning Post, People’s Bank of China (PBoC) lead researcher Yao Qian has expressed the immediate need for the central bank to develop and issue its own cryptocurrency as a means toward bolstering China’s digital economy.
The national securities regulators of China and Australia have entered an agreement to share information to promote FinTech innovation in each other’s markets.
The Australian Securities and Investment Commission (ASIC) and China Securities Regulatory Commission (CSRC) have inked a FinTech cooperation agreement that will see the two authorities share and use information on emerging market trends and developments to promote innovation in financial technologies with each other’s markets.
As Chinese bitcoin exchange Huobi suspends local CNY trading today, the ‘big three’ trading platform is looking at pastures beyond China.
In an announcement, Huobi founder Leon Li laid out the company’s future vision as the exchange implements “full cessation of all digital assets” trading against the yuan today.
I believe that this is not only a milestone for Huobi, but also a watershed in the history of Chinese digital assets and even a memorable day in the development of global digital assets.
CNLedger, a trusted news source within the Chinese cryptocurrency industry, has revealed that OKEX will soon launch peer-to-peer (P2P) over-the-counter (OTC) bitcoin-to-fiat trading platform.
“More OkEx (and likely, Huobi-Pro) will soon launch P2P bitcoin tradings with various fiat currency support,” CNLedger reported.
Earlier today, on October 30, the bitcoin price has achieved a new all-time high at $6,345, as the market continues to demonstrate optimism towards bitcoin ETFs, the possibility of China resuming cryptocurrency trading, South Korea’s regulation of bitcoin, and bitcoin hard forks.
Major Factors For Recent Bitcoin Price Surge
The recent price surge of bitcoin from $5,800 to $6,345 can be attributed to a wide range of factors including the high probability of bitcoin ETF approval and China resuming cryptocurrency trading later this year.
At a conference, Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), the country’s central bank, stated that the country does not intend to regulate bitcoin and the cryptocurrency market in the short-term.
In essence, Menon shared the same sentiment as European Central Bank (ECB) President Mario Draghi, who as CCN reported, explained that the ECB is not planning regulatory frameworks for the cryptocurrency market as of yet.
Hong Kong's banking regulator and de facto central bank has announced a new collaboration with Singapore aimed to digitize trade finance using distributed ledger technology (DLT).
Making the announcement today at a fintech event, the CEO of the Hong Kong Monetary Authority (HKMA), Norman Chan Tak-lam, said the joint project with the Monetary Authority of Singapore (MAS) will focus on a DLT proof-of-concept called the Hong Kong Trade Finance Platform (HKTFP).
Already having seen involvement from seven Hong Kong-based banks, the project is designed to digitize trade documents and reduce risk and fraud in the industry.
Despite the Chinese government’s crackdown on initial coin offerings (ICOs) and cryptocurrency exchanges, local traders have invested in Bitcoin with a huge premium during its recent rally.
As Cryptocoinsnews previously reported, the Bitcoin price achieved a new all-time high at $5,920 last week, moving closer to the $6,000 region. Analysts including billionaire hedge fund investor Mike Novogratz predicted the Bitcoin price to surge even further in the mid-term, as an increasing number of institutional investors engage in cryptocurrency and Bitcoin trading.
China may not recognize bitcoin as a legal currency, but it seems to have a clear vision for a state-issued alternative.
At a meeting hosted by the International Telecommunication Union this week, Yao Qian, the Director of the Digital Currency Research Institute under the People's Bank of China, reportedly boasted about the potential of a state-owned digital currency, while suggesting that there is an inherent lack of value anchoring public cryptocurrencies like bitcoin.
According to a report by Yicai, Yao also framed a state-issued digital currency as a way to stabilize domestic fiat currency, while better securing country's financial status.
Harvard professor and renowned economist Kenneth Rogoff, who in the past argued for a reduction in the amount of physical cash, recently said that the bitcoin price “will collapse,” due to continued regulatory pressured from governments.
In his piece, written for The Guardian, Rogoff stated:
“My best guess is that in the long run, the technology will thrive, but that the price of bitcoin will collapse.
The Chinese government will likely resume cryptocurrency trading in the upcoming months with necessary Know Your Customer (KYC) and Anti-Money Laundering (AML) systems in place.
Earlier this week, Xinhua, the state-owned news publication of China, revealed that the Chinese government is concerned with criminal activities surrounding cryptocurrencies such as bitcoin. It emphasized that cryptocurrencies have become the “top choice” for underground economies and revealed that the government will take appropriate measures to regulate the market by implementing a licensing program and strict AML systems.
Taiwan will not regulate against initial coin offerings (ICOs) and cryptocurrencies like bitcoin and will avoid the hardline stance taken by the likes of China and South Korea.
In significant news today, Taiwan’s Financial Supervisory Commission chairman Wellington Koo has told a joint session of the parliament and the cabinet today that Taiwan will not follow the paths of China and South Korea in an outright ban on crypto-related activity. Instead, the head of Taiwan’s financial regulator pledged to adopt a friendlier stance to support the development and adoption of both cryptocurrencies and blockchain technology in the country.
Earlier today, on October 5, the cryptocurrency market and the majority of leading cryptocurrencies including bitcoin, Ethereum, and Litecoin endured a major correction, declining by over 4 percent in value. Particularly, the bitcoin price underperformed relative to other cryptocurrencies, dropping from $4,450 to $4,250 within the past three days.
On October 4, the bitcoin price sustained stability at the $4,250 margin, with upward momentum created by the authorization of Japanese cryptocurrency and bitcoin trading platforms.
Following the exit of the Chinese cryptocurrency exchange market caused by the Chinese government’s imposition of a nationwide ban on cryptocurrency trading platforms, Japan and South Korea have evolved into major bitcoin exchange markets and industries.
Emergence of Japan and South Korea as Major Bitcoin Markets
According to various cryptocurrency market data providers including CryptoCompare, Japan has secured 56.
China’s official press agency issued a statement condemning virtual currency as a tool used by the criminal underworld to evade government prosecution. The agency stated that regulators must take a hardline stance against cryptocurrency usage to prevent crime, although some of the regulations it proposed seemed to hint at potential future licensure for bitcoin exchanges.
As first reported by regional cryptocurrency news service cnLedger, the Xinhua News Agency published a statement calling for regulators to take a “zero tolerance” approach to cryptocurrency-related crime.
Over the past week, the bitcoin price has fully recovered from the Chinese government’s nationwide ban on cryptocurrency exchanges. Earlier today, on October 2, the price of bitcoin surpassed $4,430, nearing the interim target of $5,000 by most analysts in the bitcoin sector.
Since September 22, bitcoin has demonstrated a rapid rate of recovery, rebounding from $3,500 to $4,430 in a span of less than two weeks.
BTCC, an international cryptocurrency exchange with headquarters in China, has announced it has ceased all domestic trading activities.
On its website, BTCC now states that all local trading in yuan and cryptocurrencies has been officially suspended as of midday, September 30, Beijing time. The exchange stopped accepting deposits on September 27, with China-based users being advised to withdraw their funds from the exchange before the end of October.