US Tres Sec Mnuchin Warns Against Bitcoin Becoming the Next ‘Swiss Bank Account’
By Saleha Mohsin
U.S. Treasury chief warns against a new ‘Swiss bank account’
No concern about Russia’s use of virtual money: Mnuchin
U.S. Treasury Secretary Steven Mnuchin said he will work with the Group of 20 nations to prevent cryptocurrencies such as bitcoin from becoming the digital equivalent of an anonymous Swiss bank account.
Speaking to the Economic Club of Washington on Friday, he said wants to ensure “bad people cannot use these currencies to do bad things.”
Under U.S. law, “if you have a wallet to own bitcoins, that company has the same obligation as a bank to know” you as a customer, Mnuchin said. “We can track those activities. The rest of the world doesn’t have that, so one of the things we will be working very closely with the G-20 is making sure that this doesn’t become the Swiss bank account.”
Mnuchin said U.S. authorities, including the Federal Reserve, were studying the pros and cons of issuing digital dollars instead of hard cash, but “the Fed and we don’t think there’s any need for that at this point.”
Mnuchin also said that he is “not at all” worried that Russia may use cryptocurrencies to help its banks avoid international sanctions. An adviser to President Vladimir Putin is reported to have said that sanctions against Russia have created a need for digital currencies as officials there fear expansions in 2018.
Virtual currencies such as bitcoin, which has soared in price in recent months amid a rush by investors to buy the instrument, could help bypass any such U.S. measures because they allow users to remain anonymous.
Russian Prime Minister Dmitry Medvedev signed a decree last month allowing the government to classify purchases by the Defense Ministry, Federal Security Service and Foreign Intelligence Service as state secrets.
“This idea that Russia or Venezuela can thwart the pressure from sanctions just by developing their own cryptocurrency is silly,” said lawyer Erich Ferrari of Ferrari & Associates in Washington. “It’s like trying to do it by using cash. Yes you can do it more easily with cash, but it doesn’t mean you’re evading. It’s harder to get caught.”
South Korea to Decide on Crypto Trading Only After Government Talks
By Kyungji Cho and Shinhye Kang
Officials respond to speculation about imminent shutdown
Real-name cryptocurrency accounts system will start as planned
South Korea’s government will decide whether to pursue a bill to shut down cryptocurrency exchanges only after “sufficient discussions and opinion coordination” across departments, the Office for Government Policy Coordination said.
The nation will in the meantime begin a planned real-name system for cryptocurrency accounts and take firm measures on illegal trading, the Office said in an emailed statement on Monday. It also said that South Korea will provide support to research and development relating to blockchain technology.
The announcement came after comments by the country’s Justice Ministry last week that it was preparing a bill to ban cryptocurrency trading via exchanges. That was later downplayed by a spokesman for President Moon Jae-in, who said the proposal is one among several and that nothing has been finalized.
Korean authorities have sought measures to curb cryptocurrency speculation as the nation emerged as something of a ground zero for the speculative mania, playing host to several of the world’s most active exchanges. Bitcoin prices in the country are persistently higher than those in the U.S. It was trading at about a 37 percent premium on Monday in Seoul.
— With assistance by Seyoon Kim
Singapore c.bank head hopes cryptocurrency tech will survive “crash”
* Cryptocurrency concerns echo other global central banks
* MAS doing extensive research into blockchain technology (Adds quote, background)
By John Geddie and Masayuki Kitano
(Reuters) – Singapore’s central bank head said on Monday he hoped the technologies underpinning cryptocurrencies such as blockchain would not be undermined by an eventual crash in the virtual coins.
The city-state is among many global central banks voicing concern about potential losses for citizens and money laundering through cryptocurrencies. But it is carrying out extensive research into the distributed ledger technology that underlies bitcoin.
“I do hope when the fever has gone away, when the crash has happened, it will not undermine the much deeper, and more meaningful technology associated with digital currencies and blockchain,” Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), said at a UBS Wealth Insights event in Singapore.
South Korea, a crucial source of global demand for cryptocurrencies, said last week it plans to ban cryptocurrency trading, a move that sent bitcoin and other virtual coin prices plummeting.
The value of bitcoin surged around 1,500 percent last year to peak at nearly $20,000 in December. However, it has broadly fallen since then and on Monday was trading around $13,572 on Luxembourg-based Bitstamp.
On a question of whether central banks should launch cryptocurrencies to sell directly to the public, Menon said that while he couldn’t rule it out in Singapore, he wasn’t sure it would be a good idea.
In one of the only examples of a country planning to launch a cryptocurrency, crisis-hit Venezuela plans a virtual token backed by oil as a way to try to raise hard currency and to evade financial sanctions imposed by Washington.
(Reporting by John Geddie and Masayuki Kitano; Editing by Richard Borsuk)
Cryptocurrency rivals snap at Bitcoin’s heels
New crypto kids on the block are whizzing past bitcoin with breathtaking profitabilityBitcoin may be the most famous cryptocurrency but, despite a dizzying rise, it’s not the most lucrative one and far from alone in a universe that counts 1,400 rivals, and counting.
Dozens of crypto units see the light of day every week, as baffled financial experts look on, and while none can match Bitcoin’s $200-billion euro ($242 bilion) market capitalisation, several have left the media darling’s profitability in the dust.
In fact, bitcoin is not even in the top 10 of the crypto world’s best performers.
Top of the heap is Ripple which posted a jaw-dropping 36,000 percent rise in 2017 and early this year broke through the 100-billion euro capitalisation mark, matching the value of blue-chip companies such as, say, global cosmetics giant L’Oreal.
“Its value shot up when a newspaper said that around 100 financial institutions were going to adopt their system,” said Alexandre Stachtchenko, co-founder of specialist consulting group Blockchain Partners.
Using Ripple’s technology framework, however, is not the same as adopting the currency itself, and so the Ripple’s rise should be considered as “purely speculative”, according to Alexandre David, founder of sector specialist Eureka Certification.
Others point out that Ripple’s market penetration is paper-thin as only 15 people hold between 60 and 80 percent of existing Ripples, among them co-founder Chris Larsen.
They can’t be best at everything
But it still got him a moment of fame when, according to Forbes magazine, Larsen briefly stole Facebook founder Mark Zuckerberg’s spot as the fifth-wealthiest person in the US at the start of the year.
Ether is another rising star, based on the Ethereum protocol created in 2009 by a 19-year old programmer and seen by some specialists as a promising approach.
Around 40 virtual currencies have now gone past the billion-euro mark in terms of capitalisation, up from seven just six months ago. The Cardano cryptocurrency’s combined value even hit 15 billion euros only three months after its creation.
In efforts to stand out from the crowd, virtual currency founders often concentrate on the security of their systems, such as Cardano, which has made a major selling point of its system’s safety features.
Others work on connected devices so “machines understand each other and are able to send each other value units, money, without going through a person or centralised third party”, Stachtchenko said.
Some, like Monero, focus on guaranteeing anonymity, and others on share and bond issues, or on speeding up the confirmation time for transactions, like Litecoin.
“It is impossible for a cryptocurrency to be the best at all the various tasks,” said Stachtchenko said.
Meanwhile financiers, established banks and regulators keep issuing stern warnings to the investment community to stay clear of cryptocurrencies.
Legendary investor Warren Buffett said that cryptocurrencies would “come to a bad ending” and that he would never stake money on them.
The South Korean government said it was working on a bill to ban cryptocurrency trading, but then backtracked.
Analysts meanwhile predict that rollercoaster ride of virtual currencies is set to carry on.
“When Wall Street bonuses hit bank accounts on January 15, I imagine we’ll see a crypto buying spree of epic proportions” said Meltem Demirors, director of the Digital Currency Group, which invests in crypto businesses.
Bitcoin Halts Week-Long Slide But Battles With Regulatory Pressure
After four days of straight losses from Monday to Thursday, Bitcoin seems to have leveled off somewhat. However, 2018 has not started well as this marks the second week in a row of poor performances.
While Bitcoiners have become accustomed to spikes and rallies, this flattening out of the price graph should still be seen as a positive. It comes over news of the South Korean justice minister’sbacktracking of a proposal to ban local cryptocurrency exchanges in the country.
Regulators have long been behind the eightball when has come to controlling digital currencies as they work on a case-by-case basis. Time has now moved along swiftly as governments and officials have had their chance to put plans together which have affected the market.
A week of lows
The past four days have seen Bitcoin down as much as 23 percent at a point in his second week of 2018, but far from being a dip, it has been a steady decline – far more nerve-wracking.
Cryptocurrencies across the board have had some tough times in general, as Bitcoin price is inexplicably linked to most of the top altcoins.
Talks of a bear market brewing due to patterns derived in the graphs have many searching for answers as to why the cryptocurrency has taken such a plunge since the highs of mid-December last year.
One factor that has historically laid big blows on Bitcoin has been regulatory stirrings. The announcement by China that it would be banning ICOs and then following that exchanges, sent the market spiraling.
This week, there were similar fears realized – albeit falsely – when the South Korean Ministry of Justice announced independently that they would be banning trading in cryptocurrency. This was done without the consent of the Ministry of Strategy and Justice and other government agencies involved in the South Korean cryptocurrency regulation task force.
The market however reacted to the news which has since been clarified by the Blue House, the executive office and official residence of the South Korean President.
According to a spokesperson from the South Korean cryptocurrency task force, there are no plans to ban cryptocurrencies.
“The South Korean government has no other choice but to follow the regulatory frameworks and trends established by other leading governments. While there certainly exists a negative reputation attached to the cryptocurrencies, the government’s stance is to allow what has to be allowed, for the benefit of the South Korean market.”
China’s third strike
After banning ICOs, and then exchanges, Chinese regulators are now looking to go after minersin the Socialist Republic, a country that holds the majority of Bitcoin mining power.
The reason for China being a powerhouse of mining has to do with the cheap and often subsidized power, which miners tap into. The plans are now to make this essential power more expensive, cutting into the profit margins.
In the US, the SEC, which has had a bit of a history in the cryptocurrency space already, is starting to make a lot more noise in its attempt to regulate.
Fears of money laundering and the use of cryptocurrencies for other fraudulent uses, has seen Commodity Futures Trading Commission Chairman J. Christopher Giancarlo take up the mantle of federal overseer of digital currencies.
It’s only weakness
Regulators, even in China, have never been able to kill off Bitcoin. However, it is clear that they have a lot of clout when it comes to affecting the market price.
This latest bout of regulatory muscle-flexing shows that there is a need for some parity between the regulators and the digital currency economy before things can continue on their merry way.