From China to Singapore, Asian countries are increasingly uncomfortable with the rise of bitcoin.
Regulators in Asia Pacific, including those in China, Australia and Singapore, have become increasingly uncomfortable with the rise in cryptocurrencies
Japan, South Korea and Vietnam together accounted for 80 percent of bitcoin’s commercial activity at the end of November, the Wall Street Journal reported.
Bitcoin has increased this year, which raised concerns of a bubble that could threaten financial stability in the region
Regulators in Asia Pacific have become increasingly uncomfortable with the rise of cryptocurrencies such as bitcoin.
The latest to issue a warning was the governor of the Bank of Japan, Haruhiko Kuroda, who called the increase in bitcoin prices “abnormal” at a press conference on Thursday. His comments echoed warnings made by his counterparts in the region’s major economies, including Australia, South Korea and Singapore.
Their concerns are not unfounded since Asia accounts for most of the trade in bitcoin, the largest cryptocurrency by value.
At the end of November, Japan, South Korea and Vietnam contributed 80 percent of the commercial activity of bitcoins worldwide, the Wall Street Journal reported, citing data from the research firm CryptoCompare.
Sharp volatility in the price of cryptocurrencies is a particular area of concern for regulators.
The price of Bitcoin has risen by more than 1,500 percent this year. Prices have fallen since their peak, and there are fears that a deeper fall may impact financial markets.
Despite this, the race to introduce financial products linked to cryptocurrencies has intensified with Goldman Sachs planning to establish a digital currency trading desk, and CME Group and CBOE launching bitcoin futures contracts.
In contrast, the economies of Asia Pacific have been less welcoming with cryptocurrencies, and many authorities issued some of the strongest warnings. CNBC provides an overview of what some regulators have said:
China – Want full control
China hastened to suppress cryptocurrencies, and authorities banned the bitcoin trade and the initial offers of currencies (ICO) in September. Its central bank, the People’s Bank of China, said the unregulated market could pose significant financial risks for the world’s second largest economy.
Despite the country’s tough position on decentralized virtual currencies and private issue, Beijing is really in favor of the use of digital currencies. The People’s Bank of China said it was looking to issue China’s sovereign digital currency and has set up a team to develop it.
A collection of bitcoin chips is in front of a binary code illustration in this photograph organized in London, United Kingdom, on Wednesday, January 4, 2017. Thank the Chinese cities empty for the increase in bitcoin.
7:09 PM ET Mar, May 23, 2017 | 01:41
Japan: the first to legalize bitcoin
Japanese lawmakers in April allowed the use of bitcoin and several other cryptocurrencies to make payments and in September they officially recognized 11 cryptocurrency exchange operators. The country, however, still has no plans to issue its own digital currency.
Recently, the Bank of Japan joined the chorus of warnings about the rapid increase in the price of Bitcoin. Governor Kuroda said on Thursday that the increase in prices was “abnormal” and that bitcoin “is marketed for investment or speculative purposes” and that it does not work as a means of payment or liquidation.
India – Concerns about illegal use
The Reserve Bank of India has repeatedly warned about the risks in the virtual currency trade. Regulators are also concerned that cryptocurrencies can be used by people to evade taxes, launder money or finance terrorism.
Last week, the authorities extended their investigation into possible infractions related to cryptocurrencies.
South Korea – Monitoring of financial institutions
South Korea has banned its financial institutions from operating in virtual currencies, including buying, owning or holding them as collateral. ICOs will also be banned, the Prime Minister’s Office said in a statement earlier this month.
The country accounts for around 20 percent of the bitcoin trade worldwide, reported AFP.
It is estimated that around one million South Koreans, many of them small investors, own Bitcoin.
Australia – Bitcoin is a “speculative mania”
The governor of the Reserve Bank of Australia, Philip Lowe, called the fascination c