Digital asset markets have been largely flat, with Bitcoin moving slowly back to above $10,000 as the week progressed. Many in the digital asset sector have argued that the US Fed’s interest rate cut, the ongoing US-China trade war and further talk of a global economic slowdown, are all behind Bitcoin’s recent slow but steady rise.
Optimism in India has dwindled this week as its finance minister remained evasive on the proposed blanket ban on all cryptocurrencies. India’s Finance and Corporate Affairs Minister, Nirmala Sitharaman, remained noncommittal, saying she had not spent much time on the report but they would be “looking into it soon”.
The “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” report that was made public on July 22 has predictably caused a backlash from the tech sector. The Indian IT trade association, the National Association of Software and Services Companies (NASSCOM), stated that regulation was a preferred solution over an outright ban.
The opposite appears to be happening in China, which banned trading crypto assets back in 2017. A Bitcoin infographic was recently discovered on the Bank of China website which has renewed hope that legislators may ease their stance on crypto trading. There has been no direct response from Beijing yet but a major bank sharing information on a forbidden asset has, of course, been taken by the sector as a positive sign. Earlier this month it was reported that the People’s Bank of China has started researching its own crypto coin as fears mount over Facebook’s financial and dollar dominance, should the social media giant’s Libra project ever get off the ground.
Reports are also emerging that cross-border trade in cryptocurrencies between China and Russia could be increasing. Chinese importers in Russia are reportedly moving as much as $3 million a day via the controversial dollar-pegged crypto-asset Tether using over-the-counter trading desks in Moscow. China has strict capital controls so it is possible this cross-border method is being used to evade them, as it is largely non-detectable by the eagle-eyed Chinese state monitors. Bitcoin has previously been the asset of choice but its volatility, and the 2018 bear market, could have sent traders into the supposedly more “stable” USDT instead.
In South Korea, local media has reported that four major crypto exchanges have revealed problems with renewing their agreements with banks. Bithumb, Upbit, Coinone and Korbit have all come under tighter regulations from the global, inter-governmental body, the Financial Action Task Force (FATF), when dealing with bank accounts. The exchanges now have to comply with strict anti-money laundering requirements following new FAFT guidelines. An anonymous Korean official told local media: “In order to meet this standard, small and medium-sized trading sites that lack operating costs are likely to disappear from the market.”
Facebook’s digital finance ambitions have got off to a rocky start and now the social media giant has admitted that the Libra project may never actually go ahead. Following several US Congress hearings over the past two weeks which largely lambasted Libra, the firm appears to saying it is having second thoughts.
In its filing to the Securities and Exchange Commission, Facebook said: “Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue… as such, there can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all.”
Several Asian nations have expressed concerns over the US social media giant’s dominance and have hinted at developing their own national cryptocurrencies.
San Francisco-based crypto and fintech firm Ripple has expanded its University Blockchain Research Initiative (UBRI) into Japan. The program set-up last year now includes Kyoto University and the University of Tokyo in addition to 33 others such as Princeton University, Carnegie Mellon, and the National University of Singapore. The company has pledged $50 million to the initiative in order to develop blockchain and cryptocurrency projects. The two Japanese universities have said they will use the finding to fuel undergraduate, graduate, PhD studies, and scholarships.
Singapore continues to welcome the emerging crypto industry with new incentives for startups and projects. The latest is a proposal to exempt crypto tokens from a sales tax when they are used to pay for goods and services.
The 7% goods and services tax (GST) would be waived for cryptocurrencies, which brings the island nation closer to Hong Kong in terms of tax friendliness. The Inland Revenue Authority of Singapore (IRAS) proposal is likely to spur innovation and investment from blockchain entrepreneurs and startups.