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People’s Bank of China (PBoC) Expresses Cash Concerns Citing Cryptocurrency’s Growing Presence

Local authorities in China are worried about the exponential growth that digital payments are experiencing in the country. In a recent report released by the FT, the People’s Bank of China (PBoC) is very concerned about the declining relevance of cash for processing payments in the Asian country. According to this report, there are several shops and stores that are currently relying solely on digital payments rather than cash. There are some payment applications such as Alipay and WeChat Pay that are making payments much faster and easier to be performed using digital systems. The issue started to generate some concerns when banks experienced complications to facilitate the flow of cash in the economy. This is why the PBoC decided to remind merchants that they were not able to refuse the Yuan. On the matter, the PBoC commented: “In recent years, there have been problems with the circulation of renminbi cash, and the people’s response has been intense. Consumers at tourist areas, restaurants, and retail merchants have had their cash refused, which has damaged the renminbi’s legal status and consumers’ right to choose between payment methods.” Back in 2017, there were some reports that showed that in some areas, digital payments accounted for more than 90 per cent of the sales. In many circumstances, cash can be more difficult and expensive to handle than electronic transactions. Using more digital payments means that the government has a larger control over its population. With cash, payments cannot be traced and can be performed in a completely anonymous way. With this increase in digital payments in one of the most powerful countries in the world, cryptocurrencies and Bitcoin could gain their place in a highly digitalized market. Banks and other traditional financial companies are not being able to capture the attention of younger users such as Millennials. There are several companies in the crypto space that are working in order to offer merchants the possibility to accept payments in virtual currencies and receive the funds in their local currency. However, if virtual currencies want to spread in China the government would have to amend or change current regulations that banned cryptocurrencies.
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‘Stablecoins Trust Risks Should Not be Ignored’, Says Former Head of the Bank of China

As stablecoins have recently become all the rage in the blockchain space, Li Lihui, who heads the Blockchain Research Working Group at China’s National Internet Finance Association(NIFA), said on December 24 that although stablecoins could maintain a stable price, the “trust risks” brought by them should not be ignored, according to a report by Yicai. Rather than fluctuating on the whims of traders’ speculation, stablecoins are characteristically pegged to a fixed amount of real-world assets, such as fiat currencies like USD or other blockchain-based assets like Ether. Li, who is also a former head of the Bank of China, one of the four state-owned commercial banks in the country, shared his insights on the cryptocurrency industry at a digital financial assets forum held in Beijing. “The market cap of certain stablecoin stands at over $1 billion, while smaller ones have a market value of hundreds of millions of dollars.” Li said, “ But some banking accounts linked to stablecoins are lack of transparency and regulation.They add trust risks.” When it comes to cryptocurrency trends for the new year, Li stated that virtual currencies sometimes expands at an alarming rate, which may pose a threat to fiat currencies. But whether digital currencies could become a mainstream payment method relies on four principal elements: higher efficiency, lower cost, economic scale with commercial value, and social credibility and security. He believed the volume of transactions between virtual currencies and fiat money depends on these factors: the international status of the fiat currency, the government’s regulatory stance, public sentiments and the market environment. He further argued that developed countries possibly shift their regulatory attitudes towards cryptocurrencies in the near future. Japan is expected to focus on opening up its financial market despite its crypto friendly status. The United States might dedicate to establishing a regulated digital finance market, defining the boundaries of regulations.And Singapore possibly pushes forward innovative experiments in digital finance.
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People’s Bank of China Officially Bans Security Token Offerings

During the last couple of months, China has often reiterated its aggressive position towards digital currencies. A similar event recently took place, after the People’s Bank of China (PBoC) decided to ban security token offerings, also known as STOs. Banning the Successor to ICOs For those who do not know, STOs are considered the successors to ICOs. They’re quite similar in purpose, yet there are a couple of differences between the two crowdfunding methods. As such, an STO investment is financially-backed via a company’s assets, revenue or profits. On the other hand, ICOs do not offer any investment backing, yet start-ups give investors value and utility tokens. It seems that the move was fuelled by the fact that despite the bans on Initial Coin Offerings, numerous start-ups were still holding token sales within the country. Pan Gongsheng, who is the deputy governor of the PBoC, stated that both ICOs and STOs are illegal activities, and they’re still quite prevalent in China. According to him, “the STO business that has surfaced recently is still essentially an illegal financial activity in China […] Virtual money has become an accomplice to all kinds of illegal and criminal activities.” Additionally, the deputy governor stated that most of the ICOs and STOs taking place in China fail to abide to the regulatory framework, and thus tend to conduct activities such as pyramid schemes, fraud and more. According to him, if the PBoC and Chinese government failed to take action back in September 2017, the ICO and digital currency market would have massively hurt the country’s economy. Of course, there aren’t too many studies that can determine whether this is true. However, it is important to keep in mind the fact that before the crackdown took place, China was the world’s biggest hub for ICOs and digital currency transactions. In fact, a study showcased that over 80% of crypto-related activity was taking place in the Asian country. The chief of an important Chinese financial regulator also recently warned crypto-related start-ups and the international community to avoid promoting and holding STO and ICO activities in Beijing. Failure to do so would lead to prosecution and deportation for the foreigners involved. Based on everything that has been outlined so far, it seems like the fintech market in China is no longer a viable option for either start-ups looking to promote their services, or potential investors. However, activities such as holding cryptocurrency for a profit aren’t yet considered illegal. After all, completely banning a decentralized cryptocurrency would be a difficult endeavour.   Featured Image via BigStock.
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People’s Bank of China Bans Security Token Offerings

The People’s Bank of China (PBoC), the country’s central bank, has officially banned security token offering (STO) businesses. An STO is an alternative to private equity and venture capital financing for companies globally. Unlike their utility token counterparts, security tokens are tied to real securities, which may represent tokenized assets. In certain cases, these tokens can represent actual equity, acting as “digital shares” of a company. Local news outlet South China Morning Post (SCMP) reported that PBoC deputy governor Pan Gongsheng told an internet finance forum in Beijing that “illegal” financing activities through STOs and ICOs were still rampant in the mainland despite a crackdown on cryptocurrencies and ICOs in September last year. “The STO business that has surfaced recently is still essentially an illegal financial activity in China,” Gongsheng said. “Virtual money has become an accomplice to all kinds of illegal and criminal activities. Most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes and other financial fraud.” The central bank deputy governor added that if Beijing had not taken action to eradicate illegal behaviour arising from digital currency transactions in 2017, a chaotic cryptocurrency market could have hurt the country’s overall financial industry. Last week, Huo Xuewen, chief of financial watchdog Beijing Bureau of Financial Work, issued a warning against STOs, stating that STO fundraising is currently illegal in Beijing. “I want to warn those who are promoting STO fundraising in Beijing,” said Xuewen. “Don’t do it in Beijing. You will be kicked out if you do it.”
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People’s Bank Of China (PBoC) Says Security Tokens (STO) Are An “Illegal Financial Activity In China”

China’s Central Bank, the People’s Bank of China, reported to the South China Morning Post its decision concerning security token offerings, noting that they are illegal in the country. The bank’s deputy governor Pan Gongsheng appeared at a summit in Beijing and there, he discussed the “illegal” financing activities that have been effectuate with STOs and ICOs and that they are “still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.” He also added that without the government’s intervention, it would have impacted the country’s financial stability. Gongsheng also noted that “the STO business that has surfaced recently is still essentially an illegal financial activity in China” and that cryptocurrencies are seen as damaging due to their connection with crime. He added, “Virtual money has become an accomplice to all kinds of illegal and criminal activities.” Further, he continued that “most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes and other financial fraud.” Gongsheng is not the only one who has taken such a stance toward STOs. Huo Xuewen, the Chief of the Bureau of Financial Work stated, “I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it.” Even though China has taken a negative stance toward cryptocurrency, it’s approach toward blockchain has been quite positive. For instance, a Chinese Internet Court adopted blockchain to protect writers’ intellectual property.
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Bank of China Opens Blockchain Lab In Singapore

The Bank of China (BoC), one of the four largest state-owned commercial banks in the country, has opened a FinTech innovation lab in Singapore to spearhead its worldwide research and development (R&D) activities. Called the BOC Innovation Lab, the lab is the first of its kind for the bank and will spearhead regional and global research and development work as well as build a talent pipeline and foster partnerships with local startups, universities and the government. It will also showcase artificial intelligence, blockchain, big data and cloud technologies. “The Bank of China Innovation Lab (Singapore) marks a new milestone in our journey in South-east Asia as we lead the future with technology from Asia’s fintech hub, Singapore,” said BOC president Liu Liange. “We will combine our banking expertise with the culture of innovation that permeates our bank and adroitly apply fintech to deliver relevant financial services in an ever-changing and volatile world. With Bank of China Innovation Labs around the world, we will enable accelerated innovation of financial products and technologies, and respond faster to market trends.” The innovation lab is housed in BOC Building in Battery Road and is staffed by a robotic customer service officer, which can quickly identify individual clients and recall their preferences with its facial recognition capabilities. Visitors can also experience how the bank’s customers in China tour car exhibitions or houses for sale at different parts of the country via virtual reality (VR) and seal the deal on the spot. “I understand that the BOC innovation lab will focus on artificial intelligence, big data, blockchain and cloud technology,” said Senior Minister of State Sim Ann. “These are exciting projects that have the potential to transform the way BOC delivers financial services and interacts with its clients, and the types of products and services BOC offers to its clients . The opening of the BOC innovation lab in Singapore today also marks an important milestone in Singapore’s financial cooperation with China.”
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Blockchain Iinvestment Bubble Is Obvious – People’s Bank of China

The People’s Bank of China (PBoC), the country’s central bank, said that blockchain investment bubbles are apparent, and that the government should strengthen supervision. In a working paper titled “What can a blockchain do and cannot do?,” the Research Bureau of the PBoc advised local Chinese government agencies to enhance supervision of financing into the blockchain sector in order to prevent “speculation, market manipulation and other irregularities.” “Currently, the bubble in the blockchain investment and financing sector is obvious,” the paper said. “Speculation, market manipulation, and even violations of laws and regulations are common, especially for token projects involving public offering transactions. Relevant government departments should strengthen supervision and prevent financial risks.” The PBoC further said that the low physical performance of blockchains and the shortcomings of the tech’s economic functions are the reasons why there are few blockchain projects that really produce social benefits. “To date, no technological innovation has had a disruptive impact on the financial system, and blockchains are no exception,” the paper said. “There is no flexibility in the supply of cryptocurrency, lack of intrinsic value support and sovereign credit guarantees, the inability to perform monetary functions effectively, and the inability to subvert or replace fiat money. The anonymity of the blockchain will increase the difficulty of implementing anti-money laundering (AML) and know your customer (KYC) in financial transactions.” The working paper came after the central bank extended its regulatory scrutiny to crypto airdrops, which it characterized as “disguised” initial coin offerings (ICO). The central bank warned that crypto airdrops are evading regulation around the public token sale model by issuing free assets to investors. It added that airdrops earmark a token reserve and then capitalizing on speculation in the market to inflate the assets’ value and drive their own profits.
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People’s Bank of China Includes Crypto Token Airdrops in Its Anti-ICO Stance

People's Bank of China Includes Crypto Airdrops in its Anti ICO Stance China’ central bank, the People’s Bank of China (PBoC), recently mentioned cryptocurrency airdrops in its 2018 financial stability report it published on 2nd November. Disguised ICO In the report, the bank mentioned initial coin offerings (ICOs) under the garb of airdrops continued to expand. This growth comes when the central authority has taken a strict stance on ICOs and has banned them out rightly. Airdrop is a marketing tool employed by many cryptocurrency launches. The main aim is to promote and/or identify issues that may affect the blockchain ecosystem. According to PBoC, the airdrop tactic is being used by various ICOs to circumvent its ban. The most employed method is to give away a small number of free coins as airdrops, while a major portion is kept in reserve. Speculation and market manipulation is then used to artificially inflate the price of the tokens and then they are carefully traded in the market to get profits. The bank said in its report that it intends to remain on high alert and is keeping an eye out for these kinds of illegal activities. The bank furthers stated that it is in touch with other relevant agencies and authorities and monitoring cryptocurrency industry in order to educate investors about the risks and how to protect their investments. Other Concerns The report also mentioned a few other ways how the ICO ban was being avoided. One of the methods mentioned was ICO platforms simply moving out of Chinese jurisdiction. With that, the platforms employ local agents who take money from Chinese investors and buy tokens on their behalf. The Chinese authorities see ICOs and other methods of raising funds by giving cryptocurrencies and tokens as potentially fraudulent way of making money and scamming investors. They frequently reach out to the public and request them to inform of any illegal ICOs and other crypto activity. The self-regulated organization, Chinese National Internet Finance Association (NIFA) even has a “token sales” category on its website in order to let people inform on any illegal ICO they come across. The document also covered different statistics and information, such as the total number of completed ICOs within the country before it was banned (65), with over a 100,000 members of the public taking part in their sales and funding around 2.6 billion Yan (a little of over USD 337 million). Even with the strong anti-crypto sentiment of the PBoC, cryptocurrencies are starting to see support from the legal infrastructure in China. Recently, the Shenzen Court declared bitcoins and other cryptocurrencies as property and, therefore, legal to buy, hold and trade.
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The People’s Bank Of China Is Looking For Cryptocurrency Specialists

According to a document published on the People’s Bank of China website, the bank is looking to hire crypto-related professionals. PBoC has four positions that are open for engineers who have… Continue reading "The People’s Bank Of China Is Looking For Cryptocurrency Specialists" The post The People’s Bank Of China Is Looking For Cryptocurrency Specialists appeared first on UseTheBitcoin.
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People’s Bank of China Recommends Yuan-Pegged Stablecoin

An independent researcher from the People’s Bank of China (PBoC) argued that China must increase its research efforts in the stablecoin space and support upcoming companies that are exploring a yuan-pegged cryptocurrency. YuanCoin to Arrive? The views were written in an op-ed piece published on Oct. 9 by CN Finance, a magazine wholly-owned by PBoC, and written by Li Liangsong, a researcher at the bank. Titled “A Brief Analysis of Stablecoins,” the report points out the recent launches of stablecoins like Paxos Standard and Gemini Dollar, which are pegged to the U.S. dollar and have shown great promise as a concept. Also, Liangsong observed the two crypto-products were regulated by authorities, signaling a shift in how cryptocurrencies are perceived. The report expresses caution over the global implications of a USD-pegged stablecoin, arguing it could increase the dominance of the dollar in the global economy and have an adverse effect on fiat currencies issued by other major economies. Liangsong highlighted the need to “double down” on stablecoin research and development efforts if their USD counterparts show promise, are recognized and prove their use in the traditional economy. He adds China should support domestic institutions, presumably Chinese crypto startups, to develop and issue yuan-pegged stablecoins. Economic Implications Considered The report pointed out stablecoin could present a threat to central institutions if they scale as much as fiat currencies. In the authors’ opinion, fiat currency could back stablecoins as collateral, instead of oil and gold, and never end up in the market circulation. Such a development could “limit the role of central banks in payment settlements and monetary policies.” The report added: “The evolution of this monetary system will likely be eventually achieved by a central bank-issued fiat digital currency.” Taking his chance at the report’s suggestions, Star Xu, founder of OKEx –the world’s third-largest crypto-exchange by daily traded volume, stated on a Weibo post that his company is open to issuing a regulated stablecoin. However, Xu did not mention if the coin will be collateralized by the yuan while stressing the exchange’s U.S. subsidiary, OKCoin U.S. would carry out this development. But, he believes the “trend of issuing a Chinese yuan stablecoin is inevitable. And OKCoin USA will participate in rolling out a regulated stablecoin.” Meanwhile, authors of yuan-stablecoin story doused any optimistic rumors but pointing out there’s a long time to endure before a crypto-stablecoin becomes a prominent feature of the global economy. The post People’s Bank of China Recommends Yuan-Pegged Stablecoin appeared first on CryptoSlate.
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Stellar Price Analysis: Grayscale Announces XLM Based Trust; XLM/USD Stuck Within Bearish Structure

Global digital asset management firm, Grayscale, has announced an investment vehicle based around XLM. XLM/USD is moving within the confinements of a bearish pattern structure, subject to a breakout south. XLM/USD has been subject to very narrow and choppy trading, which has been going on for the past eight sessions now. Price action is moving […] The post Stellar Price Analysis: Grayscale Announces XLM Based Trust; XLM/USD Stuck Within Bearish Structure appeared first on Hacked: Hacking Finance.
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Grayscale Adds Stellar as Latest Cryptocurrency Investment Trust

Grayscale Adds Stellar as Latest Cryptocurrency Investment Trust Digital currency investment group Grayscale confirmed it had successfully launched its latest fund, dedicated to Stellar’s Lumens (XLM) token, in a tweet Jan. 17. Grayscale, which now operates nine cryptocurrency funds, timed the move to coincide with a change of image for its products, renaming all its […] Cet article Grayscale Adds Stellar as Latest Cryptocurrency Investment Trust est apparu en premier sur Bitcoin Central.
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Researches from MIT, Stanford Set to Replace Bitcoin with Their Groundbreaking Crypto Project

CoinSpeaker Researches from MIT, Stanford Set to Replace Bitcoin with Their Groundbreaking Crypto Project Until now, everybody has been talking about Bitcoin, the most popular and widely used digital currency. However, Bitcoin is unable to process thousands of transactions a second. Researchers from the Massachusetts Institute of Technology (MIT), UC-Berkeley, Stanford University, Carnegie Mellon University, University of Southern California, and the University of Washington have decided to fix such a weakness and develop a crypto asset better than Bitcoin. The researchers are working together as Distributed Technology Research (DTR), a non-profit organization based in Switzerland and backed by hedge fund Pantera Capital. The first initiative of Distributed Technology Research is the Unit-e, a virtual coin that is expected to solve bitcoin’s scalability issues while holding true to a decentralized model and process transactions faster than even Visa or Mastercard. Babak Dastmaltschi, Chairman of the DTR Foundation Council, said: “The blockchain and digital currency markets are at an interesting crossroads, reminiscent of the inflection points reached when industries such as telecom and the internet were coming of age. These are transformative times. We are nearing the point where every person in the world is connected together. Advancements in distributed technologies will enable open networks, avoiding the need for centralized authorities. DTR was formed with the goal of enabling and supporting this revolution, and it is in this vein that we unveil Unit-e.” According to the press release, Unit-e will be able to process 10,000 transactions per second. That’s worlds away from the current average of between 3.3 and 7 transactions per second for Bitcoin and 10 to 30 transactions for Ethereum. Joey Krug, a member of the DTR Foundation Council and Co-Chief Investment Officer at Pantera Capital, believes that a lack of scalability is holding back cryptocurrency mass adoption. He said: “We are on the cusp of something where if this doesn’t scale relatively soon, it may be relegated to ideas that were nice but didn’t work in practice: more like 3D printing than the internet.” The project’s ideology is firmly rooted in transparency, with a belief in open-source, decentralized software developed in the public interest with inclusive decision-making. The core team of the project is based in Berlin. To solve the scalability problem, DTR has decided to develop the Unit-e with parameters very close to Bitcoin’s design, but many things will be improved. Gulia Fanti, DTR lead researcher and Assistant Professor of Electrical and Computer Engineering at Carnegie Mellon University, commented: “In the 10 years since Bitcoin first emerged, blockchains have developed from a novel idea to a field of academic research. Our approach is to first understand fundamental limits on blockchain performance, then to develop solutions that operate as close to these limits as possible, with results that are provable within a rigorous theoretical framework.” The launch of the Unit-e is planned for the second half of 2019. Researches from MIT, Stanford Set to Replace Bitcoin with Their Groundbreaking Crypto Project
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BitPay CEO Says Bitcoin Is Solving Real Problems Around the World

BitPay co-founder and CEO, Stephen Pair, has recently commented that Bitcoin (BTC) is solving several issues around the world. He said that in a press release uploaded a […] The post BitPay CEO Says Bitcoin Is Solving Real Problems Around the World appeared first on UseTheBitcoin.
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