regime uncertainty

India Central Bank warns against Bitcoin use

"The Reserve Bank of India, on Tuesday, warned the public against the use of virtual currencies such as Bitcoin, pointing out that users expose themselves to potential financial, legal and security related risks. The public advisory comes after the borderless digital currency has begun to gain widespread acceptance in India, despite poor Internet penetration and a natural scepticism to assets not backed by tangible entities such as land. In its list of potential risks, the apex bank highlights problems such as losses arising out of hacking, no sources of customer recourse and the general financial volatility surrounding Bitcoins." Continue reading →

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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 →

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Fed’s ‘Elixir’ Is Surely a Temporary One

"The idea once was that powerful central bankers would work behind the scenes to make sure that various markets were stable and fair. Nowadays, central bankers work to ensure that markets – especially stock markets – are propped up so that the appearance of an improving economy can be maintained. And far from working in secret, this generation of bankers is desperate to reassure investors that optimal conditions for continued equity gains will be continued. This is, in fact, what the Bloomberg article is telling us. The Fed's magic elixir is simply the ability to assure top investors that they can continue to shovel money into the stock market without undue risk of reversals." Continue reading →

Continue ReadingFed’s ‘Elixir’ Is Surely a Temporary One

My Fed Forecast Was Right on Target — What to Look for Next

"Outgoing Fed Chairman Ben Bernanke sounded a much more confident tone on the economy in his post-meeting press conference. And he indicated that the incoming chairman, Janet Yellen, fully supported the day’s action. Furthermore, he said that barring some economic catastrophe, the $10 billion reduction in the QE program we’ll get in January is just the first of many steps. It should be followed by cuts of roughly an equivalent size — or more — at every single meeting in 2014. That, in turn, sets the stage for the next major surprise. (At least to the Wall Street crowd.) I’m talking about the first actual short-term interest-rate hike in 2014." Continue reading →

Continue ReadingMy Fed Forecast Was Right on Target — What to Look for Next

Bitcoin Value Sinks After Chinese Exchange Blocked

"China’s biggest Bitcoin exchange was forced to stop accepting deposits in the Chinese currency on Wednesday, sending the price of the virtual money tumbling in one of its biggest markets globally. The development comes less than two weeks after China’s central bank and four other government agencies that regulate finance and technology issued a joint announcement banning Chinese financial institutions from dealing in the virtual currency. By Wednesday evening, the Shanghai-based BTC was quoting Bitcoins at about 2,300 renminbi, or about $380, apiece. That was nearly 40 percent lower than where they had traded on Tuesday." Continue reading →

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U.S. Treasury cautions Bitcoin businesses on legal duties

"Treasury's Financial Crimes Enforcement Network (FinCEN) has sent 'industry outreach' letters to about a dozen firms, regarding potential anti-money laundering compliance obligations related to Bitcoin businesses, FinCEN spokesman Steve Hudak told Thomson Reuters' regulatory information service Compliance Complete. The letters have had a 'chilling effect' on Bitcoin businesses, which are intimidated by the threat of civil and criminal sanctions for non-compliance, said Jon Matonis, executive director of the Bitcoin Foundation, an advocacy group. The firms, he said, may effectively be 'put out of business in an extrajudicial manner.'" Continue reading →

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China Bitcoin Crackdown Intensifies

"The People's Bank of China has issued a new ban on third-party payment processors from doing business with Bitcoin exchanges. Bitcoin prices on the yuan-traded BTC China exchange are down 34% on the news, and prices on the USD-traded Mt. Gox exchange were flirting with $700 all night. Mt. Gox prices were off 19% on the day. The latest ban is a a separate regulation from the People's Bank of China's Dec. 5 ruling barring formal financial institutions from processing Bitcoin. Rui Ma, a China-based angel investor, commented that if the crackdown continues, Chinese may only be able to purchase Bitcoins via miners or other traders." Continue reading →

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Who’s Afraid of Bitcoin? These Countries

"Governments do hold some force over the decentralized cryptocurrency, insofar as they wield control over the banks, which in turn can either stand in the way of Bitcoins beginning to circulate through the market or help open the floodgates. But the way some financial regulators see it, the risk of mass adoption is still too high; no one’s sure the bubble isn’t about to burst. Here’s a glance at the nations who have piped up about Bitcoin so far, and where they come down on the futurist money." Continue reading →

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China Bans Payment Companies Working With Bitcoin Exchanges?

"Sources close to China’s Central Bank today reported that the institution has banned third-party payment companies from doing business with bitcoin exchanges. A reputable source told CoinDesk that the People’s Bank of China (PBOC) met with most of the top third-party payment companies this morning. The source said the meeting topic was unrelated to bitcoin, but digital currency became an important part of the discussion. 'PBOC, in no uncertain terms, directed third-party payment companies not to do business with bitcoin exchanges in China,' they explained." Continue reading →

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Dark money: only 35 Bitcoin dealers are compliant with US law

"In the US, the virtual currency is subject to money transmitter laws at the federal level and in 47 states. The rules are not always clear, however, because they are written for money transmission services, not virtual currencies. The regulations are also in flux. New York is considering a special 'BitLicense' for virtual currency firms, for example. As a result, many Bitcoin companies have not registered at either the state or federal level. Only 35 Bitcoin companies have registered with FinCEN, the bureau of the US Treasury Department that has taken the lead on Bitcoin regulation, and the agency has reached out to several dozen more that it believes need to register." Continue reading →

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