- China’s Industrial Structure Adjustment Guidance Catalog, which goes into effect next year, has a major change: it no longer targets the crypto industry for elimination.
- Elsewhere in China, Hong Kong has laid out regulations for crypto exchanges.
- Facebook’s privacy issues may make it a bad partner for Libra, Ethereum co-founder says.
- Bitcoin celebrated its 11th anniversary with an important milestone.
Though Bitcoin is by far the most popular and valuable cryptocurrency on the market, China has been slow to embrace it. In fact, it’s done the opposite — in 2016, the Chinese government shut down most of the country’s BTC exchanges. China was poised to ban Bitcoin entirely, but luckily for crypto enthusiasts in the region, the country has now reversed its position.
The reversal was noticed in the latest edition of China’s Industrial Structure Adjustment Guidance Catalog; wherein the last version of the catalog targeted Bitcoin for elimination, the 2020 guidelines no longer lists any plans to eradicate the cryptocurrency industry.
The recent endorsement of blockchain technology from president Xi Jinping coincided with a dramatic rise in BTC/USD, after which local media cautioned on misinterpreting the remarks as supportive of crypto.
Following the most recent announcement, however, little appeared to change on Bitcoin markets.
Mining has long formed a profitable industry in China, with cheap electricity meaning major participants still reside there. Canaan Creative, one of the biggest Bitcoin mining rig manufacturers, will reportedly undergo a $400 million initial public offering, or IPO, later this month.
The government’s acceptance of the Bitcoin market isn’t the only positive crypto news out of China this week! Hong Kong’s Securities and Futures Commission published a regulatory framework for cryptocurrency exchanges on November 6. The regulations cover commonly used security measures like know your customer verification, anti-money laundering measures, and insurance to cover assets in hot and cold storage, along with other guidelines.
SFC CEO Ashley Alder first announced the forthcoming guidelines last year, and since then has “met with a large number of crypto platform operators to see… whether some platforms were in fact capable of operating in a regulated environment.” While opinions about regulations in the cryptocurrency industry vary, in general it’s been shown that these legal guidelines allow fledgling industries to grow and prosper.
The regulator’s chief executive added that after an “in-depth examination” of these exchanges’ technical and operational features, the SF concluded “some could be regulated by us.” Exchanges can now apply to be regulated.
Cryptocurrency trading platforms won’t be covered by regulations, unless they trade an asset considered a security, which according to Alder doesn’t include bitcoin. A second statement is expected to be issued later today, emphasizing the risk of trading crypto futures.
Per Alder, the statement will warn trading platform offering cryptocurrency futures they may “well be conducting an illegal activity” under Hong Kong’s laws.
Facebook’s Libra cryptocurrency isn’t even available yet and it’s been facing an uphill battle every step of the way. The token has faced regulatory scrutiny since its June 2019 announcement, which so far has culminated in CEO Mark Zuckerberg testifying before Congress just a few weeks ago. Now the token, due out in 2020, has another major critic: Ethereum co-founder Joseph Lubin.
While Lubin claimed to be a “big fan of projects like Libra,” he expressed concerns about the token’s ties to Facebook, which has notoriously come under fire for its questionable policies surrounding privacy, data sharing, misinformation, and more. As a result, Lubin says, Libra “suffers from its greatest asset” — the social media giant itself.
“My only hope for them to actually launch Libra was to launch it in a bunch of small-and-medium sized nations and bide their time and eventually, launch it in European … and the American nation that are resistant,” Lubin said.
Still, Lubin remained optimistic over the outlook for so-called “stablecoins” — cryptocurrencies that are backed by reserve assets.
“We’ll see many Libra-like projects going forward with different kinds of price-stable currencies offered,” Lubin said.
Happy anniversary, Bitcoin! The world’s most valuable token recently passed an important milestone: October 31 marked 11 years since creator Satoshi Nakamoto’s paper Bitcoin: A Peer-to-Peer Electronic Cash System was first published. In a fitting bit of timing, the BTC birthday comes with a gift of its own, with Bitcoin passing $1 billion in cumulative transaction fees.
According to analytics firm Coin Metrics, over 200,000 BTC have been paid in transaction fees since the cryptocurrency went live in early 2009. As Bitcoin’s popularity soars, the actual cost of transaction fees fall thanks to newer system designed to speed up and simplify the transaction process.
Overall, 2019 has been a relatively positive year for Bitcoin, which has recovered from the previous year’s slump and is currently valued at over $9,000. Since Nakamoto’s paper, we’ve seen the rise of many other forms of cryptocurrency, including Bitcoin offshoots Bitcoin Cash and BSV. Still, Bitcoin remains by far the most well known.
“As we celebrate the eleventh anniversary of bitcoin, it’s important to reflect on just how far we’ve come as an industry,” Pascal Gauthier, chief executive of blockchain security firm Ledger, told The Independent.
“The market is maturing, institutional investors are continuing to embrace cryptocurrencies, and the long ‘crypto winter’ is behind us. Despite these strides forward, security is still lagging behind.”
He added that Bitcoin’s underlying blockchain technology “has the potential to change the world in so many ways beyond finance, but without security this potential cannot be realised.”
That’s the roundup for November 9th. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!
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