Tje People’s Bank of China (PBoC), banned ethereum-based coins but did not after all seem to have much of a result.
Just the other day, the PBoC said initial coin offerings (ICOs) were restricted in China. Ether, which is etherum’s currency, plunged as did bitcoin. But now both bitcoin and ether are back up. Bitcoin moved up a staggering 500 dollars.
Bitcoin seems to be sustaining its higher price and may soon go above $5,000 once again.
The United States, Europe and Asia account for much of the crypto market. Over time, China may reconsider, but in the meantime the market marches on.
Canada is worried about cryptocurrency anonymity. The Globe and Mail reports that new technologies need to be developed that can penetrate the “veil of anonymity.”
Money laundering is one part of the problem, though using cryptographic addresses can help penetrate anonymity.
The larger issue is that central banks want control. We can see this in China where central banks shut down cryptocurrencies rather than lose control.
Over time more and more central banks will take drastic action. And cryptocurrencies will develop new ways to defend themselves, This ongoing struggle won’t be resolved any time soon.
Governments run money through nation states, and behind government are powerful families. That is how money works. It is a monopoly enforced by government and central banks among others.
Today this is less true than it used to be because of cryptocurrencies. Cryptocurrencies are private money, not quasi-public money such as that offered by nation states.
The cryptographic nature of such money and lack of centralization sustains cryptocurrencies. But now big banks are getting together to oust cryptocurrencies altogether.
No doubt they are doing so at the behest of central banks that cannot issue real crypto without losing the special privileges that they currently have received from governments.
They will issue digital currency immediately convertible into dollars and other national currencies. But it is not clear how well this will work. People are using alternative money like bitcoin because it is alternative.
The new government money will just be a midpoint between truly private money and government currency that is completely, horribly transparent. Eventually it will have very few of the attributes of truly private money
A big fight is coming as we have warned numerous times now. It is not clear who will win. That’s because previously there were few alternative to government monopoly money. But now there are.
And people may not be willing to give them up. Especially when the alternative is fully transparent, digital money that reveals every part of your financial life at a glance.
A self-regulatory group in China is warning about initial coin offerings (ICOs). The National Internet Finance Association of China said ICOs are hyping deals and investors ought to be very careful. The group works with the government.
The group was created by the Chinese central bank in 2016. ICOs have already received regulatory scrutiny and now the central bank is said to be writing regs that may suspend ICOs altogether.
The group is composed of 400-plus organizations.
India’s central bank is getting into the blockchain business. A central bank research group will focus on the blockchains. The Institute for Development and Research in Banking Technology (IDRBT) is the group that will build them.
India wants to use blockchain to help digitize the rupee. The government has already started down that path, even while denying it. It has taken many higher notes out of circulation and says the withdrawals are only temporary, designed to deprive criminals of usage.
But the notes haven’t been replaced and the idea is that India has advanced toward this new goal, without admitting it. There is bound to be plenty of controversy going forward. It has hardly begun.