Taiwan Follows Japan’s Bitcoin-Friendly Move, Avoids Outright Ban

In a positive move for the cryptocurrency market, Taiwan has announced that it won’t be banning digital currencies like bitcoin.

News of what Taiwan intends to do avoids the harsher steps taken by China and, more recently, South Korea. Instead, Taiwan is copying the move by Japan by embracing the digital currency market.

The news was announced by Taiwan’s Financial Supervisory Commission chairman Wellington Koo. During a joint session of parliament and cabinet, Woo stated that Taiwan would not regulate against the industry. Instead, he pledged to leave the door open for development.

Kuomintang Party (KMT) congressman Jason Hsu questioned Woo on the country’s position. However, Woo agrees with Hsu and believes that the technology presents a huge economic opportunity for Taiwan. The political party has long held a pro-fintech stance.

Hsu said:

“Just because China and South Korea are banning, doesn’t mean that Taiwan should follow suit – there is a huge opportunity for growth in the future. We should emulate Japan, where they treat cryptocurrency as a highly regulated, highly monitored industry like securities.”

According to Hsu, this paves the way for the passing of the ‘Financial Technology Innovation Experimentation Act.’

If passed, it would establish a regulatory fintech sandbox for research into digital currencies and the blockchain.

A Long Way to Catch Up

Unlike Japan, Taiwan’s venture into the cryptocurrency market is relatively new. Despite this, though, it has a highly active crypto scene. This can be seen by the fact that MaiCoin, Taiwan’s only digital asset exchange platform, has around 25,000 users.

Yet, the country is eagerly working at building the market.

So much so, that AMIS, a Taipei-based blockchain consultancy, is attempting to get financial institutions to join a private blockchain consortium proposition. AMIS is a sister company of MaiCoin. At present, only Taipei Fubon Bank and Taishin International Bank have joined while Taiwan’s Industrial Technology Research Institute is an investor; however, it’s still early days.

Hsu knows that Taiwan has a long way to go before it can catch up with the likes of Japan.

Japan has been in the market since the early days with its first digital currency exchange originating in 2010. Not only that, but the yen is a free-floating currency, whereas the Taiwan dollar is tied to the U.S. currency.

Taiwan realises that that isn’t going to stop them embracing the industry. Compared to countries that are shutting down cryptocurrencies, like bitcoin, Taiwan is remaining competitive in a growing sector.

China Bans ICOs and Closes Domestic Bitcoin Trading

At the beginning of September, Chinese authorities announced they would be banning initial coin offerings (ICOs).

In a joint statement from seven of China’s regulators, it read:

“[ICOs are] a kind of non-approved illegal open fund raising behavior, suspected of illegal sale tokens, illegal securities issuance and illegal fund-raising, financial fraud, pyramid schemes and other criminal activities.”

This was shortly followed by the decision to halt domestic digital currency exchange trading. As a result, several prominent bitcoin exchanges – ViaBTC, BTCC, OKCoin, Huobi and Yunbi – announced they would be halting mainland services. ViaBTC and BTCC has since ceased operating. However, the remaining three aren’t expected to stop functioning until the end of October.

Naturally, news of this caused market prices to drop. On the 15th September, bitcoin was trading at $2,947. This was a significant fall considering it had achieved an historic high on the 2nd of September when it scaled $5,000. Since then, however, the market has steadily recovered.

At the time of publishing, on the 6th October, bitcoin’s price is trading at $4,364, a 1.13 percent rise in 24 hours. Over seven days its value has risen by 4.76 percent. It market cap is worth $72.4 billion.

Whether Chinese authorities lift the ban on domestic trading is not known. However, it signals the country’s determination to control money that is flowing in and out of the country.

South Korea Follows China

The announcement by South Korea to ban ICOs may not have been considered that surprising. Prior to stating its position, on the 4th September, South Korea’s digital currency task force had discussed increasing regulatory oversight on the trading of cryptocurrencies.

Kim Yong-beom, the secretary-general of the Financial Services Commission (FSC), said:

“At this point, digital currencies cannot be considered money and currency not financial products.”

The report added that authorities will ‘punish’ ICO fundraising platforms.

On the 29th September, the actual banning of ICOs in South Korea was made official. At a meeting the country’s financial regulator discussed digital currencies. One of the topics pertained to initial coin offerings.

Kim Yong-bum, the vice chairman of the FSC gave a speech and said that all ICOs were prohibited in all forms, including securities.

He said:

“ICOs are being increased worldwide by issuing digital tokens and investing in virtual currencies.”

Adding:

“There is concern about the adverse effects such as the increase in the risk of fraudulent receipt.”

According to the financial regulator, ICOs are a ‘violation of the capital market law.’ Consequently, it said that an ‘intensive crackdown’ will take place. Additionally, ‘penalties’ will increase for ‘illegal acts.’

Other countries that have issued guidelines on ICOs include the U.S. and Singapore. In July, the U.S. Securities and Exchanges Commission (SEC) applied securities laws to the issuance of ICO tokens. Whereas, the Monetary Authority of Singapore (MAS) clarified its position on ICOs in August.

Criminal Use with ICOs

For many authorities there is the risk that ICOs are being employed for illegal activities.

The Swiss regulator is concerned about this. So much so, that it believes that some are being used for ‘terrorist financing.’

In a report, the Swiss Financial Market Supervisory Authority (FINMA) said that it was investigating a number of ICOs. This was to determine whether they had breached ‘regulatory provisions.’

One of its concerns relates to ‘provisions on combating money laundering and terrorist financing’ and other areas.

Whereas, the chief executive of the Hong Kong Monetary Authority (HKMA) believes that digital currencies are linked to money laundering. This is an opinion shared by Larry Fink, chairman and CEO of BlackRock, the world’s largest investment management corporation.

Recently, he said:

“When I think about most of the cryptocurrencies, it just identifies how much money laundering is being done in the world.”

Featured image from Shutterstock.

Japan’s FSA Regulator to Monitor Bitcoin Exchanges from October

Japan’s Financial Services Agency (FSA) is to begin monitoring Japanese bitcoin exchanges from October.

According to the Japan Times, the move is to ensure that digital currency exchanges have the correct internal systems, such as protecting customer assets, in place. If not, on-site inspections will be carried out.

In April, a revised payment services law went into affect. This set out operational standards for digital currency exchanges in addition to recognising bitcoin as a legal form of payment. As a result, there has been strong trading from Japan, which helped push bitcoin’s price up to $5,000 at the beginning of September.

According to an FSA executive, the move is to ensure the development of the market and to regulate bitcoin exchanges.

“We pursue both market fostering and regulation enforcement. We aim for sound market development.”

By the end of September, all cryptocurrency exchanges operating in Japan are required to register with authorities. The revised law includes anti-money laundering (AML) and know-your-customer (KYC) regulations.

To monitor the more than 20 bitcoin exchanges in Japan, the FSA has established a team of 30 members with the relevant expertise. The team will determine whether the exchanges have the appropriate risk management measures in place, including how to respond to cyberattacks.

Japan is no stranger to incidents involving the lose of customer assets in the digital market. The now-defunct bitcoin exchange Mt Gox is well known for its notorious past. In 2014, the exchange collapsed, which saw the loss of millions of dollars in customers’ funds. The exchange’s failure is considered a vital component in pushing Japanese authorities to regulating the market.

China Cracks Down on Domestic Bitcoin Exchanges

This move comes at a time when Chinese authorities have outlawed initial coin offerings (ICOs).

According to authorities, ICOs are an illegal form of fund-raising that is open to:

“…financial fraud, pyramid schemes and other criminal activities.”

After this announcement came the call to stop prominent domestic digital currency exchanges from operating in the country. Naturally, news of this saw market prices plummet. So much so, that on the 15th September, bitcoin’s price was trading at $2,947. As a result, its market cap was pushed down to $48.8 billion.

Following China’s move to halt bitcoin exchanges, several have already revealed when they will be closing. Chinese exchange BTCC is expected to stop functioning at the end of September. However, ViaBTC, will cease operations today, as of the 25th September. OKCoin and Huobi will halt their operations at the end of October. They have been given extensions due to the large number of users on their platforms and because neither listed ICO trading pairs.

Reportedly, ViaBTC will relaunch its platform overseas; however, it’s not know when the relaunch will take place.

Last week, at a global blockchain event held in Hong Kong, Haipo Yang, CEO of ViaBTC, said:

“A third of our customers come from outside China, and I believe these overseas users will continue to use the ViaBTC platform, so we can still provide value.”

Bitcoin’s Price Recovers Slightly

Since achieving the $5,000 mark at the beginning of September, bitcoin’s price has been on a roller coaster ride. This has been greatly brought about by China’s move to crackdown on the market.

However, today, the digital currency is showing some signs of improvement. At the time of publishing, bitcoin’s price is trading at $3,897, a 4.81 percent rise in 24 hours. In seven days, though, its value has dropped by 1.23 percent. Its market cap is currently worth $64.6 billion. Yet, it still has a way to go before it can attain its $75 billion market cap it achieved at the beginning of September.

At present, the combined market value is worth $135.4 billion. This, too, is a significant drop from its near $180 billion market value from the start of the month.

Only time will tell whether bitcoin’s price can once again reach new heights. Despite this slight setback in price many people remain confident that it will rise again, even further than what has already been seen.

To the Moon for Bitcoin?

Tom Lee, a Wall Street strategist and co-founder at Fundstrat, an independent research boutique, providing market strategy and sector research, believes bitcoin will rise to $25,000 in five years. Additionally, he states that it will remain the best asset to invest in to the end of 2017.

In a report, Lee said:

“I unequivocally believe bitcoin is your best investment to the end of the year.”

These are similar comments he made in August when he said:

“It has a lot of characteristics that are very similar to gold that I think will make it ultimately attractive as an alternate currency. It’s a good store of value.”

According to Lee, there’s no point in projecting bitcoin’s price two months from now. Instead, looking at its long-term future is the way forward.

Veteran trader masterluc has predicted a bullish price of $15,000 for bitcoin by the end of 2017. According to the trader, bitcoin will continue its bull run into 2019. At which point, the trader believes it will be worth between $40,000 and $110,000.

Bitcoin is ‘a Fraud’

Despite the confidence in the currency, not everyone thinks the same.

According to Jamie Dimon, JPMorgan Chase CEO, he thinks the cryptocurrency is ‘a fraud‘ and that it ‘won’t end well.’

At a conference in New York, the banker said:

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed. Currencies have legal support. It will blow up.”

Additionally, he stated that he would ‘fire in a second’ any employee found trading in the digital currency.

More recently, he took another shot at bitcoin claiming that it is a ‘novelty‘ and that it’s ‘worth nothing.’

In an interview, Dimon stated:

“Right now these crypto things are kind of a novelty. People think they’re kind of neat. But the bigger they get, the more governments are going to close them down.”

He added that ‘creating money out of thin air without government backing is very different from money with government backing.’

As such, this sort of creation, to him, is ‘worth nothing.’

One report suggests, though, that the CEOs of major U.S. banks are ‘probably afraid‘ of bitcoin and the blockchain.

Rainer Michael Preiss, executive director at Singapore-based Taurus Wealth Advisors, thinks this is because cryptocurrencies are becoming a viable investment alternative for people.

Featured image from Shutterstock.

Bitcoin Price Soars to New All-Time Record High Above $4,600

The number one digital currency has gone and done it again. The bitcoin price has scaled to over $4,600 for the first time, pushing its market cap value to over $76 billion.

At 13:54 UTC, on the 29th August, the bitcoin price was recorded at $4,602. As a result, the combined market value soared to $164.4 billion.

At the time of publishing its price has dropped to $4,542. However, it marks a significant time for the digital currency.

Since the beginning of 2017, the bitcoin price is up by around 350 percent from roughly $1,000 on the 1st January. It has since quadrupled in value. On the 13th August, bitcoin finally managed to scale the $4,000 mark amid strong Japanese interest. Geopolitical turmoil in North Korea has also impacted its price as investors continue to consider it as a safe haven.

The week prior to that the bitcoin price had re-scaled the $3,000 mark when it reached $3,200 for the first time. Since then it has continued its upward trajectory, pushing the currency to new heights.

Ethereum Scales $360

Ether prices have also surged to new heights not seen in two months.

At the time of publishing, ethereum is trading at $369, pushing its market cap to $34.8 billion. In 24 hours it has risen by 7.30 percent whereas in seven days it has increased by 17.24 percent.

As can be seen from the chart below, ethereum’s price dropped to a low of $149 on the 16th July. Since then it has steadily been climbing up in price back to its current listing. Prior to dropping to $149, ether prices were trading below $400, at $391. It has yet to re-scale to that previous high. However, with its steady price gains it’s expected to see new heights.

Litecoin Climbs Above $60

Fifth-placed litecoin has also recorded new highs. Strong trading has helped to push its price over the $60 mark for the first time.

This price rise is due to increased trader interest from Japan and Korea. According to a report, Korean exchange Bithumb was responsible for over 20 percent of trading in litecoin in the past 24 hours.

At the time of publishing, litecoin is trading at $62.51, with a market cap value of $3.2 billion. In the past 24 hours its value has decreased by 1.07 percent. Meanwhile, in seven days its has risen by 34.13 percent.

At its peak, litecoin was trading at $64.92 on the 28th August. Yet, considering litecoin was trading just above $4 at the beginning of 2017 this is a significant milestone. It remains to be seen how much further the currency can go.

Charlie Lee, the founder of litecoin, recently took to social media to express his delight.

New Price Heights

What we are witnessing now, however, is just the start. According to Ronnie Moas, Standpoint Research founder, he predicts great things for the market.

Back in July, Moas said that bitcoin would reach $5,000 by 2018. He also said that ethereum would rise to $400 whereas litecoin double to $80.

At the time Moas said:

“$5,000 could happen in a few months. It’s only starting to gain traction right now. It’s starting to spread like wildfire right now.”

He determined that its price would go up as demand increased for its coins. At present, 16.5 million coins out of the capped 21 million has been issued.

Since making his prediction in July, Moas has increased the value to $7,500. This was after the bitcoin price scaled $4,000. He believes, though, that by 2027 each unit of bitcoin will be worth $50,000.

Furthermore, Moas thinks that the combined market cap will reach $2 trillion in 10 years. At a conservative estimate, he thinks that one percent of the $200 trillion global market will be invested in cryptocurrencies.

He said:

“A lot of people say there is a bubble out there. I see a bubble when you get down below the top 50 cryptocurrencies. There are more than 800 names right now. In my view, what happens outside the top 50 is irrelevant.”

Whereas, Aurelien Menant, CEO of regulated digital currency exchange Gatecoin, has said in the past:

“I would not be surprised to see the bitcoin price doubling again to around $6,000 by the end of the year.”

One bullish analyst thinks bitcoin’s price will reach $15,000 by the end of 2017. Even though there are only four months left of the year veteran trader masterluc has great confidence in bitcoin. Masterluc is of the opinion that bitcoin will continue its bull run into 2019. At which point he thinks that its worth will between $40,000 and $110,000.

Long-Term Price Heights

Others, however, have been thinking long-term for the currency’s future. So much so, that Dennis Porto, bitcoin investor and Harvard academic thinks it will scale $100,000 by February 2021. He thinks this is possible by simply following Moore’s law.

However, Kay Van Petersen, Saxo Bank analyst thinks it will reach $100,000 by 2027. Many may have confidence in Van Petersen’s prediction considering he correctly predicted when bitcoin would reach $2,000.

Some less bullish estimates include one from Tom Lee, a strategist at Wall Street firm Fundstrat. He thinks that bitcoin’s worth will be between $20,000 and $55,000 by 2020.

In a report, Lee said:

“We believe one of the drivers [of bitcoin] is crypto-currencies are cannibalizing demand for gold. Based on this premise, we take a stab at establishing valuation framework for bitcoin. Based on our model, we estimate that bitcoin’s value per unit could be $20,000 to $55,000 by 2022.”

At the time Lee’s prediction was considered bullish. However, since then others have made bigger predictions for the currency.

It remains to be seen who is right. Yet, at present it seems that the market will continue its upward trajectory to reach new heights.

Caution Urged

Interestingly, Llew Claasen, the executive director at the Bitcoin Foundation, has urged investors to be cautious with their investments.

Speaking at a recent conference in Africa, Claasen spoke about the potential bitcoin has in the continent. Yet, he stated that users should only invest what they can afford.

He said:

“To be honest bitcoin is not a great form of cash right now. Don’t think of it as cash, think of it as a digital form of gold that enables you to save outside of the current financial climate.”

Featured image from Shutterstock

Digital Currency Licenses Granted to Two Filipino Bitcoin Exchanges

Two digital currency exchanges in the Philippines have been granted licenses from the Philippines central bank.

In a report from local publication, The Philippine Star, the Bangko Sentral ng Pilipinas (BSP) has approved the registration of two bitcoin exchanges in the country. According to the report, the move is part of efforts to regulate the fast growing market and the ‘risky’ cryptocurrency industry.

Speaking at a FinTech Thought Leadership Roundtable Series presented by FINTQ, Nestor Espenilla Jr., the central bank’s chief, said:

“We see a rapid increase in the trajectory. It is coming from a small base but increasing that is why we decided to require them to register.”

Espenilla also provided figures on the local bitcoin trade. According to him, the bitcoin trade volume has more than doubled. In 2016, the figure was only around $2 million per month. However, exchanges are now seeing trading volume exceed $6 million each month.

He added:

“That is the importance of putting them under the regulatory framework. They have to comply with it. We are moving to regulate them.”

Rules on Bitcoin Exchanges

This move comes months after the BSP released new rules for bitcoin exchanges operating in the country. In January, it was reported that the central bank would treat digital currency exchanges as a type of remittance company.

At the time, the BSP said:

“The Bangko Sentral does not intend to endorse any [virtual currency], such as bitcoin, as a currency since it is neither issued or guaranteed by a central bank nor backed by any commodity. Rather, the BSP aims to regulate [virtual currencies] when used for delivery of financial services, particularly, for payments and remittances, which have material impact on anti-money laundering (AML) and combating the financing of terrorism (CFT), consumer protection and financial stability.”

At the end of December last year, it was reported that the Philippines government was discussing whether to regulate digital currencies. As the number of Filipinos sending money back home using bitcoin increases the government is keen to provide protection.

Ranking as the world’s third largest remittance receiver, the Philippines saw around $30 billion into the country in 2016. Amounting to nearly 10 percent of the country’s GDP, the Philippines has an ideal opportunity to make use of bitcoin.

At the time, Espenilla said that the number of transactions related to the digital currency was increasing. Yet, while the central bank was interested in digital currency exchanges, the threat of money laundering remains.

Espenilla stated:

“We are studying putting virtual currency exchange operators under a more formal regulatory framework.”

Help or Hindrance?

The Philippines is certainly no stranger to the digital currency bitcoin. In 2015, the country received its first two-way bitcoin ATM, located in the heart of Manila’s financial district. According to CoinRadarATM, the country now has four bitcoin ATMs.

This steady growth illustrates where the market is going as bitcoin gains dominance. Yet, while this is the case, could the regulations help or hinder bitcoin startups in the Philippines?

This was a question that was asked back in February by Luis Buenaventura, CTO of BloomSolutions, a Philippines-based remittance firm. According to Buenaventura, while there may have been initial outcry at the move, optimism should be looked at toward the changes.

Buenaventura said:

“It’s good news that the government is finally recognizing startups that have been laboring in a legal gray area since 2013. It’s also encouraging that they’ve spent enough time to learn about bitcoin to understand what it’s good at.”

However, while it may be some time before the full impact is understood, it’s hoped that it won’t deter innovative in the country, which has built up over time.

Japan Regulates Bitcoin

News of the Philippines central bank approving the registration of two bitcoin exchanges follows similarly to Japan.

In April, Japan made changes to its regulations to see bitcoin as a legal form of payment similar to prepaid cash cards and gift certificates.

Not only that, but the country put an end to an eight percent consumption tax on transactions of bitcoin bought by digital currency exchanges. When it went into effect in July, it helped to push the currency’s price up. Since then the country has continued to fuel demand for bitcoin.

In response to the increased demand in the cryptocurrency over 10 digital currency exchanges have launched. The aim is to capitalise on this surge within Japan.

This, however, shouldn’t be hard. It’s reported that by the end of 2017 there will be as many as 260,000 retailers accepting bitcoin. According to Midori Kanemitsu, chief financial officer at bitFlyer, that number ‘is expected to rise to 300,000 or so in 2017.’

Bitcoin’s Value Rises

Since the beginning of 2017, bitcoin’s price has quadrupled. In January, it was worth $1,000. At press time, on the 21st August, it’s trading at $4,028. Over a 24-hour period it has dropped its value by 2.08 percent. In seven days its value has decreased by 5.33 percent.

Just last week the currency was nearing the $4,500 mark; however, it fell short of this reaching $4,482. It’s believed that some traders may have sold their coins to enjoy the profit they would have made.

Despite this drop in price, though, demand remains for the currency. So much so, that the initial jump to $4,000 was down to strong Japanese interest. Geopolitical turmoil in North Korea is believed to have been a factor as well.

With a major selloff in bonds and stocks taking place, investors are turning to bitcoin as a safe haven. It remains to be seen how much further the digital currency can rise.

One trader has speculated that it will reach $15,000 before the end of 2017. Others, however, are a tad more bearish. Ronnie Moas, Standpoint Research founder, thinks its price will rise to $7,500. This is a revised figure from his previous $5,000 prediction. And yet, there are some who are predicting figures as high as $100,000.

One thing remains, though, even though the digital currency’s price may rise and fall, people are still confident as to where it’s going. There will continue to be critics along the way, but the currency has now reached a stage of maturity that prices remain relatively stable during shifts in the market.

Featured image from Shutterstock.

Innovate UK Seeks Blockchain Pitches in £8 Million Startup Competition

A U.K. government agency is reaching out to blockchain startups in a competition that is focused on digital health solutions.

In a notice from Innovate UK, a nondepartmental public office that is designed to promote innovation through grants and investments, it is offering up to £8 million for U.K. businesses to work on innovation projects that tackle the biggest healthcare challenges.

The competition is being run through the digital health technology catalyst, which is part of the Industrial Strategy Challenge Fund. It’s designed to support the creation of digital health products that meet the requirements of the NHS. This is part of a new £35 million funding programme over four years.

According to Innovate UK, ‘digital health promises to have a profound impact on the approach, delivery and administration of healthcare, for the benefit of patients.’

In its notice, it said:

“The types of digital health projects we will fund include (but are not limited to) … emerging digital health technologies with a demonstrated healthcare benefit, such as artificial intelligence, machine learning, augmented reality, blockchain and the Internet of Things.”

The competition opens today (31st July) and runs until the 11th October at 12 p.m.; however, the deadline for registrations is the 4th October, 2017. Applicants will be notified on the 17th October.

It’s only open to U.K.-based firms and projects must start by the 1st February, 2018.

Innovate UK stipulate that feasibility projects must range in size from total project costs of £50,000 to £75,000 and need to be completed within one year.

Whereas industrial research and experimental development projects must range in size from total project costs of £500,000 to £1 million and need to be completed within three years.

According to the government agency,

“[Projects] must have the potential to achieve one or more of the following:

  • improve patient outcomes

  • transform healthcare delivery

  • enable more efficient delivery of healthcare.”

It adds:

“In this competition we won’t fund projects that:

  • don’t have digital technology as the project core

  • focus on developing medical devices (unless enabled using digital technology as a core component)

  • seek to discover or develop medicines

  • seek only to develop data or record-keeping systems.”

The aim of the competition is to speed up the development of innovative digital solutions that can be utilised for healthcare challenges, thus helping the sector to grow.

Funding Projects through Innovate UK

This isn’t the first time that Innovate UK has funded projects in the past.

In 2016, the government agency awarded £248,000 to a startup that was building a cross-border payments tool using the ethereum technology.

According to a report from CoinDesk, the money was awarded to London-based Tramonex where the money was reported to be used to further the development of its cross-border blockchain tool.

At the time, Tramonex co-founder and CEO Amine Berraoui said:

“We are quite advanced in our prototype already, it’s more about looking for different approaches to handle the technology. Then to develop the commercial clients.”

Once completed the prototype will be submitted to the U.K.’s Financial Conduct Authority (FCA) for approval.

Last September, Innovate UK launched a new blockchain project in a £15 million competition. In the government’s Emerging and Enabling Technologies Programme, Innovate UK were seeking to ‘identify and speed up’ technology by providing funds worth up to £15 million.

According to the competition description, it reads:

“Our aim is to inspire the new products, processes and services of tomorrow; those with the potential to unlock billions of pounds of value to industry and disrupt existing markets.”

The aim of this competition is to help businesses broaden out innovation activities, to find new sources of revenue from new products, processes or services.

Just through these competitions and projects it shows how important new technologies such as the blockchain is to Innovate UK and how much they want the country to harness its potentials.

Competitions Provide Boost to Innovative Solutions

There are several competitions taking place that are aiming to find the next big thing in the blockchain space.

In Hong Kong, a technology programme is hoping to unearth the next fintech blockbuster. In a report from the South China Morning Post, 10 technology startups have been selected for a 12-week mentorship programme that is backed by 18 major financial establishments.

These include companies from Hong Kong, South Korea, Singapore and the United States, who are aiming to implement innovation that could aid financial institutions within the Asia-Pacific.

Accenture’s FinTech Innovation Lab Asia-Pacific is who picked the 10 technology startups.

Evangelos Kotsovinos, the Asia head of infrastructure and China chief information officer for Morgan Stanley, said:

“Asia provides unique challenges and opportunities that are driving true fintech innovation here.”

“Working with labs such as Accenture’s is a great way for Morgan Stanley to identify technologies that can help us grow and evolve our business, but also to give back to the community by advising start-ups on how to commercialise their technology to meet the demands of a global financial services firm.”

According to the SCMP, some of the technology startups include Block, a South Korean blockchain infrastructure provider; CoverGo, a Hong Kong-based company that automates manual insurance processes; KapitalWise, a U.S. startup, that provides a micro-investment platform; and microUmbrella.com, which delivers a micro-insurance buying and claims platform.

Piyush Singh, Accenture’s senior managing director of financial services for Asia-Pacific, said:

“The financial institutions in the FinTech Innovation Lab Asia-Pacific select start-ups who are trying to address, in a practical manner, current real-world fintech challenges facing the industry.”

Now more than ever, financial firms need to maintain pace with the rate at which the technological world is developing. For it to ensure this, it must embrace fintech, but the only way for that to be achieved is for the finance sector to research new methods of doing things. To do so, means a more efficient system that is free from errors and cuts down on costs.

As the former CEO of Barclays once said, the financial services sector needs to open itself to fintech if it wishes to remain relevant.

Speaking at a Money 20/20 fintech conference in Copenhagen in June, Anthony Jenkins said:

“Banks can avoid [becoming irrelevant], but they have to act now, and what they really need to do is think about innovation, but also transformation, doing something radically different.”

Featured image from Shutterstock.

Egyptian Central Bank Deputy Governor Rejects Bitcoin Adoption Rumour

The deputy governor of Egypt’s central bank has rejected claims that bitcoin adoption will take place at the country’s banks.

In a statement posted on Arabian news site Amwal Al Ghad, Lobna Helal, the Central Bank of Egypt’s (CBE) deputy governor, denied reports that the bank was permitting banks to handle bitcoin adoption.

In a statement, she said:

“For stability of the Egyptian banking system, the banks deal with the official currencies only, and never deal with any virtual currencies.”

Similar comments also came from Gamal Negm, another deputy governor and director of the CBE, who flatly refused the rumour that the CBE was going to accept bitcoin.

According to a report, the rumours circulating the central bank’s bitcoin adoption stemmed from social media around the 16th and 17th June. However, any such possibility was quickly denied by officials at the bank.

These comments come at a time when several jurisdictions around the world are contemplating how to classify the digital currency and whether it should be regulated.

Bitcoin Adoption

Japan is quite possibly becoming widely considered a forward-thinking country when it comes to the adoption of bitcoin.

In April, the country changed its payment regulations, which now sees the digital currency as a legal form of payment for goods and services. As a result of this attitude change to bitcoin it’s believed that by the end of 2017 there will be around 300,000 stores accepting it as a form of payment.

Considering the negative experience the country has had with bitcoin in the past, with the now-defunct digital currency exchange Mt Gox, the country’s interest in the market has been reawakened. As a result, this new influx of Japanese traders has helped to push the price of the currency up in the past. In June, the price of bitcoin soared past the $3,000 for the first time.

Low cost Japanese airline Peach Aviation Ltd., is just one such company that is due to start adopting bitcoin by the end of the year. It is hoped that the rapid appreciation that the digital currency has been experiencing lately in Japan will attract tourists to the country.

Russia too is another country that should be given due credit to its position with bitcoin adoption. In the past the Russian government has been against the acceptance of the digital currency.

So much so that last March, management and executives of banks and financial services firms who were found to be using bitcoin faced a seven-year prison sentence. Whereas everyday individuals caught trading it faced a sentence of at least four years. Now, though, the country has eased its stance on digital currencies such as bitcoin and while it is exploring the possibility of regulating it, it’s not sure whether to class it as a currency or an asset.

At the beginning of February, the Philippines released new guidelines for bitcoin exchanges operating in the country. The move by the Bangko Sentral ng Pilipinas (BSP) essentially signals the recognition and legalisation of bitcoin activity within the country.

Also noteworthy is India, which is one country that is currently debating how bitcoin should be regulated. While the digital currency is unlikely to be banned in the country, the question as to who will oversee its regulation remains unanswered. However, given the fact that the adoption of bitcoin is widely used among a large percentage of 18-35-year-olds, it remains to be seen what impact regulation will have on the population who remain supportive of it. If, and when, it becomes regulated it could help propel the currency to a population of 1.3 billion people that is home to the fastest growing smartphone market in the world.

Bitcoin’s Value Slumps

The first half of 2017 has seen a rapid appreciation of bitcoin. At the beginning of the year its value was trading at $1,000, but by the beginning of June it has soared to over $3,000.

With an increase in the number of traders investing in the digital currency around the world claims were circulating that it couldn’t sustain its pace, was in a bubble and was likely to burst with rapid downfalls.

Seven months into 2017 and the price of bitcoin is trading at $2,311 on the 18th July, according to CoinDesk’s Bitcoin Price Index (BPI). Many would say that the price of the currency has certainly burst. Not only that, but it was recently trading below $2,000 for the first time in a 49-day low on the 15th July. As a result, the market cap value of all digital currencies dropped to nearly $70 billion. The highest it has achieved is $115 billion, which it achieved in June.

However, while bitcoin’s value had dropped significantly from its June record, digital currencies across the board have also slumped. As a result, many are claiming that what the community is witnessing is not a bubble, but the result of a looming deadline which could solve bitcoin’s scaling issues.

Meanwhile Andreas Antonopoulos, author of ‘Mastering Bitcoin,’ said recently on social media, that the decline in the price of the digital currency market was due to a price correction given the fact that it has seen a 1500 percent rise in two years, particularly in the last three months.

The Community Watches and Waits

With the 1st August deadline looming, all the bitcoin network can do is wait and see what impact the upcoming activation of SegWit2x will produce on it.

It is hoped that this solution will answer the needs of the community who have often faced a backlog of transactions as they wait to join the blockchain.

Even though miners were expected to start signalling for the proposed solution until later in July, some miners have already signalled their support for it in an advanced move. According to a report from CoinDesk, around 43 percent of bitcoin’s mining power has signalled for the change. These include the likes of Antpool, BTC.com, BitClub and BitFury.

While it may be a surprise it is likely due to the need to upgrade the network protocol before the 1st August deadline.

Featured image from Flickr via Dennis Jarvis.

Mt Gox CEO Mark Karpelès Prepares for Bitcoin Trial in Japan

The former CEO of the now-defunct bitcoin exchange Mt Gox is preparing to head to trial in Japan next week where he faces embezzlement charges relating to the disappearance of around 650,000 bitcoins.

French-born Karpelès, who was released on bail last year from a Tokyo detention house on the condition that he didn’t leave Japan, is expected to plead innocent, according to his lawyer. In a report from the Japan Times, his lawyer Kiichi Iino said ‘he is keeping calm as the trial gets underway.’

It was back in August 2015 that Karpelès was first arrested with allegations that he had manipulated bitcoin volumes at Mt Gox. The following month he was charged with the embezzlement over the loss of hundreds of millions of dollars worth in bitcoin. It was reported, at the time, that Karpelès had stolen 321 million yen in the digital currency.

The Background to the Failure of Mt Gox

Launched in 2010, Mt Gox quickly became a popular bitcoin exchange for the countless enthusiasts of the digital currency seeking a place to buy and sell the currency. However, throughout its existence it was blighted by troubles, suffering a hack as early as the summer of 2011 and a lawsuit filed against Mt Gox alleging a breach of contract.

Despite this, though, by 2013 and into 2014 it was claimed that the exchange was handling around 80 percent of all global bitcoin trading as it became the world’s leading bitcoin exchange.

However, it wasn’t until November 2013, when bitcoin trading reached a new high of $1,300, that the exchange’s troubles took on a new level, bringing the community and the digital currency’s price crashing down.

At the beginning of February 2014, Mt Gox halted all bitcoin withdrawals, stating that it would continue indefinitely after detecting ‘unusual activity.’ On the 10th of February, the team at Mt Gox released a company statement, saying the issue was because of a transaction malleability.

“A bug in the bitcoin software makes it possible for someone to use the bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent.”

Yet, by the 20th of February, bitcoin withdrawal services had still not resumed. By the 23rd, Karpelès had resigned from the board of the Bitcoin Foundation and on the 24th Mt Gox suspended all trading and went offline.

By the end of February, Mt Gox had filed for bankruptcy protection in Tokyo and later in March for bankruptcy protection in the U.S. leaving a trail of angry investors demanding answers. With the company admitting that it had lost 750,000 of its customers’ bitcoins in addition to 100,000 of its own, Karpelès appeared on television to apologise and say that all the coins are ‘almost all gone.’ Subsequently, this news dented the reputation of the currency.

At the time, the loss of the 850,000 bitcoins was worth around $500 million, representing about seven percent of the estimated global total number of bitcoins.

Fast-forward a month later and the bitcoin exchange posted on its website that it had found 200,000 bitcoins worth around $116 million in an old wallet that had been used in 2011.

However, three years later and the mystery over the remaining missing bitcoins has continued to cause many to speculate where they could be.

According to the Japan Times, Karpelès led a rich life and is reported to have lived in an $11,000-a-month penthouse spending money lavishly, including on prostitutes.

What Now?

As things stand a court-appointed Toyko trustee in the Mt Gox investigation has completed a review of 24,750 individual claims by creditors as the reimbursement of lost funds to creditors takes shape.

Kolin Burges, a British investor who said he lost several hundred bitcoins in the exchange’s collapse, and is famous for protesting outside Mt Gox’s headquarters (main image), said:

“I’ve not had any back yet, but hopefully, eventually all the creditors will get a small percentage of their money back from the bankruptcy distribution.”

He added:

“The charges only cover a subset of the issues which were happening at Mt Gox, so I don’t expect that we will find out most of the information we want to know.”

If Karpelès is found guilty, he could face up to five years in prison and a fine of 500,000 yen or $4,000.

In light of the Mt Gox collapse, Japan passed a bill stating that all digital currency exchanges were required to be regulated by the Financial Services Agency.

Japan’s Interest in Bitcoin Grows

It may have been three years ago when the Mt Gox scandal broke, but in Japan wounds run deep.

So much so, that the country has shied away from digital currencies and what they stand for until recently. After Japanese regulations changed in April, which now sees bitcoin as a legal form of payment, thousands of merchants have stated that they will accept the digital currency by the end of 2017.

This reawakened interest in the digital currency has helped to push its value up as a new wave of investor interest turn their attention to bitcoin.

Of course, even though the most popular cryptocurrency has had a troubled past it still remains a viable alternative for many people around the world. As a result of this new influx of investors, the price of bitcoin soared to its highest yet in June where it was recorded at over $3,000. It has since settled back down to $2,450, according to CoinDesk’s Bitcoin Price Index (BPI), but considering it was struggling to break the $1,000 barrier at the end of 2016 it has come a long and significant way.

It remains to be seen how much further the currency can go and even though it will still be a currency that is used by criminals it’s hoped that bitcoin has reached a new level of maturity that its price won’t be too affected if such a negative situation involving bitcoin arises in the future.

Featured image from Flickr via Trân Trân.

Is the PBoC’s Regulation Crackdown Cooling Bitcoin Fever in China?

A surge of interest in bitcoin has seen its price reach new heights, yet the excitement of the digital currency market in China has been watered down due to the nations government who wants to control bitcoin.

According to a salesperson at Huobi, one of the ‘Big Three’ digital currency exchanges in China, the platform is receiving fewer phone calls for inquiries.

“This is because withdrawals are controlled by regulations.”

Sending money out of the country through bitcoin was easy for people to undertake. However, such a procedure for the People’s Bank of China (PBoC) was frustrating as its keen to keep the yuan from weakening.

As a result, in January 2017, the PBoC undertook on-sight inspections at China’s biggest digital currency exchanges known as the ‘Big Three’ in Shanghai and Beijing: OKCoin, BTCC and Huobi.

At the time, the Shanghai branch of the PBoC, said in a public statement that:

“The People’s Bank of China Shanghai HQ, the Shanghai Municipal Finance Office and other units formed a joint inspection team to carry out site inspections on Bitcoin China, focusing on checking whether it was operating beyond its business scope, whether it was engaging in unlicensed forex, payment, financing and other related businesses; whether it engaged in market manipulation; implementing anti-money laundering, financial security risks and so on.”

A separate notice was issued by the Beijing branch of the PBoC, which issued a similar statement.

BTCC revealed on social platform Weibo that it had met up with the PBoC and that it was ‘cooperating with regulatory departments.’

Bitcoin

In order to comply with the anti-money laundering (AML) and other requirements, all three exchanges announced that they would be suspending their withdrawal services and would only resume once they had received regulatory approval.

It was initially believed that the withdrawal freeze would only last one month; however, it continued through to March and only ended at the beginning on June, signalling the end of China’s freeze. News of digital currency exchanges resuming their services helped to bump the price of bitcoin back up to around $2,400.

However, while bitcoin trading volumes are gradually improving in China since the withdrawal restrictions, the PBoC still has a keen interest in digital currencies. So much so, that it’s expected to release a new set of regulations regarding them in due course. As a result, the Chinese bitcoin market remains on edge with no idea as to how these new rules will impact the currency.

Trading Turns to Japan

Unlike China, though, Japan has changed its stance of digital currencies such as bitcoin and now regards it as a legal form of payment for goods and services.

On 1 April, the Japanese government passed a law that had been drafted in December 2016, bringing bitcoin exchanges under AML and know-your-customer (KYC) rules, while listing bitcoin as a payment method.

The debate circulating the regulation of digital currencies such as bitcoin come in the wake of the collapse of Mt. Gox, the now-defunct digital currency exchange. In 2014, the digital market was left shattered after it was alleged that the Tokyo-based platform had lost $350 million or 744,4000 bitcoins. Mark Karpeles, CEO of Mt. Gox, was later arrested on allegations that he had manipulated volume on the-then leading bitcoin exchange prior to its demise. He is currently under investigation as to his involvement in the platform’s collapse and the remaining missing money.

Now that the law has been put into effect, it means that capital requirements are in place for the digital currency exchanges to protect users from any further mishaps. Not only that, but the exchanges are also required to undertake employee training programs and to submit yearly audits.

Such a turnaround of events has seen trading volumes in Japan rise. In May, trading of bitcoin in Japanese yen rose by 31 percent.

Furthermore, this acceptance of bitcoin has meant that retailers are working toward accepting it as a form of payment for customers.

Appearing to lead the way is Japanese low-cost airline Peach Aviation Ltd., who have announced that they will be accepting bitcoin as a form of payment by the end of the year to customers who want to purchase flight tickets. Japan’s leading online travel agent Evolable Asia has also teamed up with BITPoint Japan, the company behind Peach Aviation Ltd., to get 1,400 hotels and inns around the country to start accepting bitcoin by the summer of 2017.

Such a move is likely to produce a chain reaction, which is already being reported. So much so, that by the end of the year, it’s believed that there will be around 300,000 Japanese retailers accepting bitcoin for goods and services.

For a country that hasn’t had the best experience with bitcoin in the past, this news highlights how far the currency has come and the belief that countless individuals appear to have in it.

Many, however, continue to question bitcoin’s usage to pay for things considering it remains such a volatile asset and the transaction fees involved to transfer bitcoins. Despite this, though, the digital currency market remains popular with bitcoin leading the way. As such people appear embracive of the currency, which can be seen in Japan.

China to Follow?

It remains to be seen whether China will change its position on digital currencies and provide favourable regulations that will boost bitcoins price and restart the surge of interest within the country.

At the moment, the market is on tenterhooks as it remains unclear as to what direction the PBoC will take.

Yet, if China’s position on bitcoin regulations proves favourable, could it help to push the market cap of all digital currencies to one trillion dollars?

Bruce Fenton, a blockchain economic advisor, recently made this announcement on social media. According to him, in three years the market cap value of the entire crypto market will be valued at one trillion dollars.

Bitcoin

According to Coin Market Cap, it’s currently worth over $112 billion and is likely to continue rising as more interest and investment gets pushed into the market. It remains to be seen whether the one trillion mark is reached within three years or sooner than that.

Featured image from Flickr via worldwide finance.