Economy

“Europe has agreed the core elements of a banking union that mark the most significant pooling of national power since the birth of the euro. European Union leaders meeting in Brussels Thursday will sign off a compromise deal hammered out overnight by their finance ministers after months of difficult negotiations. It will then go to European lawmakers for final approval before May 2014. The banking union is central to the eurozone’s response to future financial crises. The aim is to stop bank collapses from trashing national economies — a fate Ireland suffered in 2010 — and destabilizing the euro.” Continue reading

“The People’s Bank of China announced that it had injected cash into the short-term credit markets. While the PBOC does that regularly—twice a week via its regular, publicly announced open market operations—the cash injection that it announced today was a different kind of mechanism known as a short-term liquidity operation or SLO. It directs the central bank’s money to 12 large Chinese banks seen as crucial to the stability of the system. That the central bank has been so quick to try to ease stress in short-term markets indicates that policy makers are leery of repeating last-summer’s severe credit crunch.” Continue reading

“China’s central bank has rushed to pump money into the stalling banking system but markets across Asia still fell sharply amid fears that the world’s second-largest economy faces a credit crisis. State media in China had reported that the PBOC has unexpectedly pumped $33bn (£20bn) into the domestic money market through what it refers to as ‘short-term liquidity operation’. Fears over a looming Chinese debt crisis spurred by a poorly regulated and opaque financial system stoked fears over the summer that the Asian powerhouse could finally be on the brink of a sharp slowdown in growth.” Continue reading

“The next five to 10 years will be critical. But like how the mobile devices, Internet, cable, television, movies, musicals, operas and symphonies all have found their niches, the same will be with currency. Precious metals like silver and gold will co-exist with coins and bills (necessary if the lights go out or cyber attack), checks and money orders, credit and debit cards, online payments and digital currency. This technology has the ability to disrupt the status quo and springboard the global economy into the future. It gets sovereign nations out of the currency manipulation business. It may or may not be Bitcoin or its imitators, but chances are likely that digital currency is here to stay.” Continue reading

“The Bank of Japan is ‘very interested’ in the online virtual currency Bitcoin, Governor Haruhiko Kuroda said Friday. The central bank’s Institute of Monetary and Economic Studies is studying it, Kuroda said at a regular news conference. ‘Compared with traditional ways of money transfers and existing electronic money, Bitcoin has both similar and different aspects,’ Kuroda said. Central banks around the world are closely watching Bitcoin, the value of which has been swinging wildly due to speculative trading. The BOJ currently has no plans to take action on the situation surrounding Bitcoin, Kuroda said.” Continue reading

“The National Australia Bank (NAB), one of Australia’s ‘Big Four’ banking groups, published a three-page research paper on 19th December titled ‘Bitcoin to replace AUD?’ (Australian dollars). Despite the provocative title, the paper does not suggest replacing the national currency with bitcoin, nor say it could happen in the near future. Rather, it is an explanation of bitcoin and a comparison of the nature of digital currencies with existing sovereign currencies, and how they fit into the current international financial system. Bitcoin could well become a widely accepted medium of exchange, the paper said, but it would take many more years to achieve mainstream acceptance.” Continue reading

Singapore government decides not to interfere with Bitcoin

“The Monetary Authority of Singapore (MAS), the country’s central bank, has decided not to intervene on whether businesses can accept Bitcoin as a means of transacting goods and services. ‘Whether or not businesses accept Bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene,’ it told Singapore-based Bitcoin trading platform Coin Republic in an email. Singapore is one of the world’s top finanacial hubs that is increasingly seen as a challenger to Switzerland’s private baking dominance. The last time MAS issued a statement on Bitcoin was in September, when it warned speculators about the risks of trading the cryptocurrency.” Continue reading

“It is prohibited to engage in foreign exchange trading with the electronic currency Bitcoin, according to the Icelandic Foreign Exchange Act. A written response from the Central Bank of Iceland to Morgunblaðið states that the Foreign Exchange Act specifies general restrictions on foreign exchange trading and capital movements between countries. ‘It does not appear that the provisions of the Act that exempt goods and services from the aforementioned restrictions can be applied to trading in Bitcoin or that other exemptions from restrictions of the Act apply to such transactions,’ the Central Banks’s response states.” Continue reading