From China to South Korea, Asian Central Banks Losing Sleep Over Bitcoin, Cryptocurrencies
Central banks in Asia became more and more nervous about cryptocurrencies in 2017, mostly because of their appeal to ordinary investors seeking quick gains from the exponential growth of the industry. Indeed, 60% of the global cryptocurrency trades emanate from Asia.
From the Southeast, Central and East Asia, regulators in the region have issued warnings and notices to the general public, urging them to exercise caution before jumping into the cryptocurrency craze.
We have highlighted an overview of various moves initiated by Asian central banks in light of the recent meteoric rise of cryptocurrency interest:
Today is Christmas. You can’t do the following in fiat currency:- Make deposit- Wire funds- Buy asset- Sell asset- Withdraw large amountBitcoin let’s you do all of this. Today. And every day. Welcome to the future.— Pomp 🌪 (@APompliano)December 25, 2017
Today is Christmas. You can’t do the following in fiat currency:- Make deposit- Wire funds- Buy asset- Sell asset- Withdraw large amountBitcoin let’s you do all of this. Today. And every day. Welcome to the future.
China
People’s Bank of China (PBoC) Deputy Governor Pan Gongsheng told the audience at a financial forum in Shanghai Bitcoin will die – its end coming from hackers or through a global ban to be initiated by world governments.
A report from Quarts quoted Pan as saying:
"If we had not shut down Bitcoin exchanges and cracked down on ICOs several months ago, if China still accounted for more than 80% of the world’s Bitcoin trading and ICO fundraising, everyone, what would happen today? Thinking of this question makes me scared."
India
India’s central bank, the Reserve Bank of India (RBI) said the government is still in the process of drafting rules on Bitcoin and cryptocurrency exchanges as it advised investors to exercise caution about the industry, reports Times of India.
The RBI reminded the public that since December 24, 2013, the central bank has cautioned “users, holders and traders of Virtual Currencies (VCs) including Bitcoin regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs.”
At the same time, RBI “clarified that it has not given any license/authorization to any entity/company to operate such schemes or deal with Bitcoin or any VC.”
Indonesia
Early this month, the Bank Indonesia (BI), the country’s central bank, announced it is in the process of formulating a new regulation calling for a total ban on all forms of cryptocurrency, as well as their trading and usage in transactions as payments.
Aside from protecting the sovereignty of the Indonesian rupiah, BI Governor Agus Martowardojo is also concerned about the potential abuse of cryptocurrencies for terrorism financing and money laundering.
Martowardojo even issued a stern warning in October telling those who use Bitcoin as a payment method “will be dealt with” accordingly.
Japan
On Tuesday, Japanese Finance Minister Taro Aso said Bitcoin is not yet a credible currency but added he would carefully monitor its progress, various media reports said.
Aso said after emerging from a cabinet meeting:
"There’s no fixed definition on whether it’s currency or not. This issue is a difficult one…It has not yet been proven to be credible enough to become a currency, so I need to watch [Bitcoin] for a little while more."
Malaysia
Malaysia plans to release a regulatory framework covering cryptocurrency transactions before the year-end.
However, Bank Negara Malaysia (BNM) governor Muhammad bin Ibrahim revealed that regulations would focus on combating money-laundering and terrorism financing. Beginning next year, BNM will designate those converting cryptocurrencies into fiat currency as reporting institutions compliant with certain mandatory rules.
The Philippines
A Bitcoin-friendly regime, the Banko Sentral ng Pilipinas (BSP) is coordinating with the country’s market regulator, the Securities and Exchange Commission, in drafting a unified rule on cryptocurrencies like Bitcoin – when used as investments.
BSP Deputy Governor Chuchi Fonacier said:
"This is in coordination with SEC, if ever there would be a shift to that – if there is kind of approach, there is investment already. It would not just be BSP, it’s a collaboration [with the SEC]."
Singapore
The Monetary Authority of Singapore (MAS) told the general public to “act with extreme caution” of Bitcoin “and understand the significant risks” on cryptocurrency investing.
While expressing concern over the meteoric rise of cryptocurrency values, MAS reminded the public that Bitcoin and other cryptocurrencies are not recognized by the government as a legal tender, therefore the industry remains unregulated.
"MAS considers the recent surge in prices of cryptocurrencies to be driven by speculation."
South Korea
South Korea is also not recognizing Bitcoin and cryptocurrencies as legitimate currencies and has ruled out regulating its trading, according to a Reuters report.
South Korea’s Financial Supervisory Service (FSS) Governor Choe Heung-sik said he does not recognize cryptocurrencies as substitutes for money.
"All we can do is to warn people as we don’t see virtual currencies as actual types of currency, meaning that we cannot step up regulation for now."
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