Japan

Trump ‘Loves’ Negative Rates and ‘Could Get Used to’ Them, Criticizes Fed at World Economic Forum, China Trade Deal

24/01/2020 by Idelto Editor

U.S. President Donald Trump spoke at the World Economic Forum in Davos, Switzerland Tuesday saying the U.S. and other nations are “forced to compete … with nations that are getting negative rates, something very new.” Trump took direct shots at the U.S. Federal Reserve, claiming they’ve not lowered rates quickly enough. The harsh words echo remarks made just last week during the “phase-one” China trade deal signing ceremony, where the president stated he doesn’t know “where the hell it leads” but that negative interest rates such as implemented in Germany and Japan are “incredible.”

Also Read: Maduro Opens International Crypto Casino

Trump Enamored by Minus Signs

During his speech at the World Economic Forum in Davos, Switzerland, President Trump lamented the U.S. being unable to keep up with countries like Germany and Japan which have negative interest rate policies (NIRP). “[Other nations are] forced to compete, and we compete, with nations that are getting negative rates, something very new,” the president remarked during a half-hour speech at the event. He went on:

Meaning they get paid to borrow money, something that I could get used to very quickly. Love that. Gotta pay back your loan? No. How much am I getting?

Though Trump assured the audience that the “time for skepticism is over,” and cited flows of labor and industry back into the U.S. — going on for almost half an hour detailing the many ostensible achievements of his administration — the flowery language was tempered by talk of negative rates and the U.S. Federal Reserve. “The Fed has raised rates too fast, and lowered them too slowly,” Trump asserted.

More Verbal Jabs During China Trade Deal Signing Last Week

Trump made similar remarks during the signing ceremony for the phase-one trade deal with China on January 15. Admitting he doesn’t know “where the hell it leads,” but nonetheless advocating negative rates, he stated:

It bothers me when Germany and other countries are getting paid to borrow money … They get paid, I love this, this concept is incredible. Again, you don’t know where the hell it leads, but you borrow money and when you have to pay it back, they pay you. This is one that I like very much.

In the speech the president was noticeably unable to grok the NIRP system, musing aloud why anyone would give out loans at a loss, but nonetheless lent strong verbal credence to the practice, much like his pro-NIRP counterparts at the European Central Bank.

Non-Conservative Views on Monetary Policy

In one sense, the president’s lamentations about high rates in the U.S. are not surprising, given a growing global trend toward and beyond the zero bound. However, aiming for sub-zero sovereign bond yields such as those seen in Japan and Germany seems to some like a race to the bottom, where no bottom may be in sight.

Trump’s views are mirrored by those of European Central Bank (ECB) president Christine Lagarde, who stated in October that “We should be happier to have a job than to have our savings protected.” Of course many strongly disagree with both Lagarde and Trump, and are looking to find safety in assets like gold and crypto, often perceived to be more economically sound than fiat money. In the context of stagnating and uncertain economic climates like those in Trump’s model nations of Germany and Japan, it seems everyday individuals are not as in love with the idea of NIRP as the world’s so-called leaders.

What are your thoughts on Trump’s position regarding the Fed and negative interest rate policy? Let us know in the comments section below.

Image credits: Shutterstock, Evan El-Amin, fair use.

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Regulatory Roundup: EU-Wide Crypto Regulations, New Rules in Europe, US, Asia

14/01/2020 by Idelto Editor

In this roundup, we cover EU-wide crypto regulations and individual countries’ new digital asset rules including Austria and the U.K. We also cover numerous crypto regulatory developments in the U.S., China, Japan, South Korea, India, and the Philippines.

Also read: Regs Roundup: SEC Actions, Crypto Tax-Free in Korea, New Chinese Laws

EU-Wide Crypto Regulations Begin

The deadline for all European Union member states to transpose the 5th Anti-Money Laundering Directive (AMLD5) into their national legislation was Jan. 10. All EU countries should have started regulating crypto exchanges and custodial wallet providers like banks and financial institutions.

A number of European countries have independently announced how they are regulating crypto service providers such as Austria and the U.K. Some countries have missed the deadline, however. The Netherlands, for example, said on Jan. 10 that its crypto legislation is not yet effective despite many months of preparation.

Prior to the Jan. 10 deadline, European Central Bank (ECB) President Christine Lagarde said that the bank wants to take an active role in the digital currency field, reinforcing her plan to lead the ECB “ahead of the curve.” The ECB is also actively working on a digital currency, which Lagarde said should not discourage private sector solutions.

Meanwhile, cryptocurrency is a focus of European regulators this year, as the European Securities and Markets Authority (ESMA) outlined in its Strategic Orientation 2020-22.

US: Multiple SEC Actions and a Registration Statement

The U.S. has been active regarding crypto oversight this past week, with several government agencies taking crypto-related actions. As the Securities and Exchange Commission (SEC) deals with a number of crypto cases, its compliance office has named digital assets a priority this year.

Among the cases the SEC dealt with last week is one concerning Telegram. The agency has gotten a break in this case when the Southern District Court of New York ordered the company on Monday to hand over its bank records by Feb. 26. Secondly, the SEC is seeking more than $16 million in disgorgement plus civil penalties in a case targeting Icobox and Nikolay Evdokimov, a court document reveals on Jan. 10. Thirdly, the agency charged Donald G. Blakstad and two entities he controlled on Jan. 8 with engaging in the fraudulent offer and sale of over $3.5 million of securities. They claimed to have “developed a world-class data center for cryptocurrency mining.”

Meanwhile, First Bitcoin Capital Corp. filed a registration statement with the Commission on Jan. 7 seeking to list its shares on Nasdaq.

US States: Illinois Blockchain Act, Wyoming Bill, NY Crypto-Focused

Several U.S. states have also taken crypto regulatory actions this past week. The state of Illinois’ Blockchain Technology Act took effect on Jan. 1. It outlines the legal uses of blockchain technology, stating:

A smart contract, record, or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store, or verify the smart contract, record, or signature.

In the state of Wyoming, House Bill 43 on “digital representation tokens” was assigned a bill number on Jan. 9. It defines the rights, duties, and obligations associated with digital representation tokens, as well as providing exceptions.

In the state of New York, Governor Andrew Cuomo has proposed amending the state’s financial service law to place crypto companies “on an even footing with other financial services companies.” He explained that under the current law, entities licensed under the Insurance Law or Banking Law are required to pay assessments to the state’s Department of Financial Services to cover the cost of examination and oversight. However, crypto companies are not required to pay such assessments, despite being subject to similar examination and oversight requirements.

China Prioritizes and Tests Digital Currency, Advances Commercial Blockchain

China has continued to make headlines in the crypto space, with its ongoing love for blockchain technology and push to launch a central bank digital currency (CBDC) ahead of Facebook’s Libra. Its central bank, the People’s Bank of China (PBOC), has named digital currency one of its priorities this year. In addition, the media reported last week that the bank’s digital yuan had completed its preliminary design and testing.

As for blockchain technology adoption, the provincial government of Anhui announced earlier this month a plan to use blockchain technology across governmental service centers. Moreover, the country’s nationwide blockchain service infrastructure platform reportedly will be put into commercial operation in April. The Blockchain Service Network is an industry alliance initiated by the State Information Center.

Meanwhile, China is still skeptical about cryptocurrency. A report by blockchain security firm Peckshield claims that cryptocurrency-based capital flight from China was around $11.4 billion in 2019.

Japan’s New Leverage Rule, South Korea for Mainstream Crypto, Initiative in Crypto Valley of Asia

Several other Asian countries have made crypto-related announcements this past week. In Japan, the Financial Services Agency (FSA) has reportedly revealed its plans to limit the leverage in crypto margin trading to twice the deposits of traders. Local media reported that the new rule will be included in a Cabinet Office order linked to the revised Financial Instruments and Exchange Act which is expected to go into effect in April.

In South Korea, the Presidential Committee on the Fourth Industrial Revolution has proposed a number of pro-crypto measures. The committee has urged the government to integrate cryptocurrency into the country’s financial system, allowing financial institutions to directly handle and offer a wide range of crypto products, including derivatives. It also proposes listing bitcoin on the country’s stock exchange.

In India, the state of Kerala is positioning itself as the blockchain hub of India, with plans to use the technology to improve a wide range of existing systems, including financial.

In the Philippines, a plan to build an airport is underway in the “Crypto Valley of Asia,” an initiative of the Cagayan Economic Zone Authority (CEZA), the government agency responsible for managing the Cagayan Special Economic Zone and Freeport. Last week, CEZA’s administrator discussed pro-crypto regulations with a Japanese minister of state. They also call for cooperation among Asian countries.

What do you think of the regulatory developments covered in this roundup? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock.

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Japan and Philippines Discuss Pro-Crypto Laws, Cooperation Among Asian Countries

13/01/2020 by Idelto Editor

Japanese Minister Naokazu Takemoto and Philippine Cabinet member Raul Lambino of Crypto Valley of Asia recently met to discuss Asian countries’ crypto regulations. They urge the Philippine Congress to introduce legislation on cryptocurrencies and security tokens, calling for cooperation among Asian countries.

Also read: Regs Roundup: SEC Actions, Crypto Tax-Free in Korea, New Chinese Laws

Officials From Japan and Philippines Discuss Crypto Regulations

Naokazu Takemoto, Japanese Minister of State for Science and Technology Policy, visited Manila last week to meet with Secretary Raul Lambino, administrator and CEO of the Cagayan Economic Zone Authority (CEZA), local media reported Saturday. The two officials discussed the future of fintech businesses in both countries and the Asian region, especially those related to cryptocurrencies, blockchain technology, and security tokens. According to the Manila Bulletin:

Japanese Minister Naokazu Takemoto and Secretary Raul Lambino of CEZA urge Philippine Congress to write laws on security tokens, cryptocurrencies, and other financial technologies.

CEZA is the government agency responsible for managing the Cagayan Special Economic Zone and Freeport, located at the northeastern tip of the country, surrounded by the waters of Balintang Channel, China Sea, and the Pacific Ocean. Lambino was appointed member of the Philippine Cabinet by President Rodrigo Roa Duterte on July 5, 2017. Takemoto has been serving as Japan’s minister of state for science and technology policy since Sept. 11, 2019.

Security Token Offerings and Cooperation Among Asian Countries

While the Philippines currently has no law covering security token offerings (STOs), Japan is expected to revise its Payment Services Act in April to include this fundraising method, which the two officials discussed in detail.

“This digitalization is expected to enable people who could not participate in the investment process to make small-scale investments,” Minister Takemoto explained. “STO is now becoming a worldwide funding method of financing, but the STO market in Asia, including Japan, has just begun to develop.” Furthermore, “To achieve the philosophy of enhancing financial markets and enriching the economy by using technologies to benefit the entire population,” the Japanese minister asserted:

Cooperation between financial systems and technologies among Asian countries is essential and must be considered.

STOs have attracted worldwide attention, including in Japan. Five major Japanese financial institutions — SBI Securities, Kabu.com Securities, Daiwa Securities, Nomura Securities, and Rakuten Securities — established the Japan STO Association in October 2019.

New Laws Needed

Security token platforms are able to set up shop in the Philippines’ Cagayan Special Economic Zone and Freeport. CEZA currently has 25 principal Offshore Virtual Currency Exchange licensees from Europe and Asia. Among them is a Japanese security token exchange called Allex. According to the Manila Bulletin, the platform’s tokens comply with Japan’s KYC and AML standards. However, even though security tokens are issued inside the Philippines, the country cannot benefit from them due to the lack of relevant laws, Lambino pointed out, claiming:

Congress needs to enact laws surrounding STOs and virtual currencies and appoint a particular government agency to have jurisdiction to supervise the implementation of this.

Lambino opined that without appropriate laws, CEZA “will end up being a mere host for back offices or business processing office (BPO) for foreign fintech companies while all the buying, trading, and offering payments will be done offshore.”

Allex now helps train Philippine blockchain developers on how to create security tokens. Secretary Lambino believes there is an urgent need for regulations that would help the Philippines become more competitive in this field. Referring to security tokens, he elaborated:

This matter is unstoppable. It’s now being practiced and accepted by many jurisdictions, including the U.S.

CEZA has built the Crypto Valley of Asia in a joint initiative with private developer Northern Star Gaming and Resorts Inc. Efforts are underway to build an airport for the crypto valley.

Meanwhile, the country’s central bank, Bangko Sentral ng Pilipinas (BSP), has authorized 13 crypto exchanges to operate in the country. Companies wanting to sell securities to Filipinos or exchange tokens into fiat currency must be registered with the BSP or the country’s Securities and Exchange Commission. Recently, the authorities in the Philippines, including the central bank, had technical help from the International Monetary Fund (IMF) including in the area of crypto assets.

Do you think Asian countries need better crypto regulations? Should they cooperate for better crypto oversight? Let us know in the comments section below.

Images courtesy of Shutterstock and the Manila Bulletin.

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Asia’s Love Affair With Blockchain Is Blossoming

28/12/2019 by Idelto Editor

Far away from western eyes, Asian blockchain projects are thriving. A vibrant ecosystem of public and permissioned chains has sprung to life in Asia, aided by government and big business endorsement of distributed ledger technology (DLT). Many of these chains are virtually unknown outside of the region, yet enjoy high profile partnerships and endorsements in their native territory.

Also read: Germans Rush to Buy Gold as Draft Bill Threatens to Restrict Purchases

Asian Nations Are Big on Blockchain

It’s not just China that’s issued a green light to blockchain, if not bitcoin: all across South-East Asia, officials have issued similar blessings, and crypto projects have eagerly stepped up to the plate. Last week it was Thailand’s turn to roll out the red carpet to blockchain, where Sharering’s digital identity system and blockchain infrastructure are to be used in the country’s new e-visa system. The system will be deployed for visitors from India and China initially, and should dramatically speed up airport immigration for millions of travelers a year.

Blockchain initiatives of this nature are now a common occurrence in Thailand and Asia at large: in November, the country’s Excise Department announced a blockchain-based tax payback system, and in September, the Thai energy company PTT unveiled a blockchain-based renewables platform with the Energy Web Foundation. To outsiders, the pan-Asian wave of blockchain projects can seem mystifying, given that the benefits of blockchain minus bitcoin remain debatable. Nevertheless, businesses and governments are undaunted in their determination to deploy DLT to solve a myriad of problems. News.Bitcoin.com spoke to a number of experts in a bid to ascertain why Asia is big on blockchain.

Unpacking the East’s Blockchain Obsession

“Asia loves blockchain because the technology is considered as a unique way to solve financial inclusion and cross-border remittance challenges,” ventures Alexander Kech, CEO of digital asset custodial service Onchain Custodian. “Less tight to legacy technology, countries are able to leapfrog and, leveraging new tech like blockchain, progress faster than many established economies.”

“Singapore is an excellent example of a vibrant blockchain and crypto industry,” Kech continues. “A forward looking government and consultative regulator contribute to this favorable environment. The biggest fintech festival in the world (60K attendees) celebrates fintech in general and blockchain in particular … The rest of Asia is not staying still with Hong Kong and Thailand among many others gearing up in terms of legal framework to ensure they are getting ready for the future of banking and finance.” He adds:

The Ubin project, a Singapore regulator driven initiative, is working with other central banks but also securities market infrastructure to enable the use of blockchain for the settlement of cross-border payments and securities transactions. The Thai central bank is working on issuing its CBDC, while Cambodia has launched a blockchain based payment system in the country that it plans to expand to cross-border payments.

It’s a Cultural Thing

“The modus operandi for the Asia-based blockchain industry is largely different from that of the West,” explains Kyn Chaturvedi, Chief Business Development Officer with Tomochain. “Asia really looks at blockchain as a business, and where economic value can be derived from in the short, mid, and long term. The space in Asia certainly did not gain a groundswell of support due to the ideals of cypherpunks, anarchists, or libertarians. So, though decentralization is a cool narrative, it’s not what drives a business to operate successfully in Asia. Instead the focus here is on market fit, and Asian innovation is driven by fast, iterative cycles measured through customer acquisition.”

It’s a Payments Thing

“Look no further than South Korea, which was the center of crypto activity in 2017,” continues Tomochain’s Kyn Chaturvedi. “Today, the companies that survived and thrived have identified a single area to drive their businesses forward – payments. Payments is an industry ripe for innovation considering the vast number of retail investors holding crypto. We can look at startups like Terra Money to the massive Kakao social network in the commercial space.

“Next year we’ll likely see Kakao’s crypto wallet (Klip Wallet) being available for use across its millions of users. And then we can talk about the regulatory sandbox setup in Busan to allow and encourage its citizens to use a fiat-backed stablecoin for everyday commerce across the city. Tomochain is continuing to integrate with payment solutions in SEA as well. We have two major deals with Wisepass and Urbox that covers the purchases of a wide variety of products in Vietnam – everything from beverages to housewarming gifts. Wadz, a payment solution provider, is moving from Ethereum to Tomohain in order to enable their POS systems to integrate crypto payments across thousands of vendors in the region.”

It’s a Tech Thing

Bina Cho is VP of Marketing Strategy at APM Coin, whose native token is used by Seoul’s world-famous APM fashion market. According to Cho, any examination of Asia’s blockchain love affair must start and end in the country: “ One of the reasons for Korea’s strong enthusiasm for this industry is technology infrastructure and Koreans’ strong interest in new tech. For the blockchain implementation, solid IT infrastructure is required. Korea boasts one of the fastest internet speeds in the world, which means blockchain and other new IT tech can be flawlessly implemented.

“Also, since Koreans tend to be tech savvy and/or early adaptors, they are willing to experience the new tech on their own. I think these are the reasons that several blockchain projects seeking mass adoption are developing their business models from the Korean market to global markets.”

It’s an Asian Thing

“You’ll note this report is light on Asia coverage as I am not as familiar as I should be with that half of the market,” conceded Messari’s Ryan Selkis in his 76-page Crypto Theses for 2020. He’s not alone. Blockchains operated by companies that are household names in Asia are an enigma to overseas analysts. Yet when it comes to tech, where Asia leads, the west follows. As such, crypto trend-spotters would do well to fix their gaze on SEA.

As crypto analyst Joseph Young recently observed, “At this point, pretty much every major conglomerate in South Korea leading their respective industries is involved in blockchain / crypto to some extent. Samsung, Kakao, KT, Shinhan, LG, Hyundai, the list goes on.” While South Korea, Japan, China, Thailand, Singapore and neighboring nations press ahead with all things blockchain, those in the west are forced to watch from afar, cheering the adoption if not always fully grasping the rationale.

Why do you think blockchain is embraced more enthusiastically in Asia than in the west? Let us know in the comments section below.

Images courtesy of Shutterstock.

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Japan Hosting World Conference to Discuss Decentralized Financial Governance

26/12/2019 by Idelto Editor

Following the consensus reached at the G20 leaders’ summit on the importance of discussing better governance for the decentralized financial ecosystem, Japan’s top financial regulator is hosting a global blockchain conference to discuss the subject. The regulator is welcoming stakeholders from around the world to participate, including other regulators, open-source software developers, university researchers, and relevant businesses.

Also read: Regulatory Roundup – New US Crypto Bill, France’s 1st Approved ICO, Muslim Crypto

From G20 Leaders Summit to Blockchain Global Governance Conference

Japan’s top financial regulator, the Financial Services Agency (FSA), announced Monday that it is organizing Blockchain Global Governance Conference (BG2C) in collaboration with Nikkei Inc. The event will take place on March 9 and 10 in Tokyo. The FSA detailed:

As stated in the G20 Osaka Leaders’ Declaration under Japan’s presidency … within the international regulatory community, a consensus has been reached on the importance of engaging with various stakeholders in the decentralized financial ecosystem to ensure public policy objectives.

The Osaka summit, where the G20 leaders declared their commitments on a variety of issues including crypto assets, took place at the end of June. Noting that it has been working towards “attaining the concept of multi-stakeholder governance for decentralized financial ecosystem,” the regulator described, “As a cornerstone, BG2C aims at providing a neutral place for stakeholders to deepen mutual understanding and explore the ways to enhance cooperation.”

Worldwide Participants Welcomed

The FSA detailed that it has been conducting Multilateral Joint Research Project (MJRP) since 2017, with an emphasis on blockchain research in areas such as security, privacy, anonymization, and traceability.

“We also observe that potential blockchain deployments will extend to digital currencies and digital tokens as well as trade finance, supply chain and logistics, etc,” the agency continued, noting that “This conference will address the uses of blockchain in various business areas and will touch on the current business models, future applications, and underlying challenges to be resolved.” Japan’s top financial regulator elaborated:

BG2C welcomes participation from various stakeholders around the world including those who are active in open source software communities, such as Bitcoin, Ethereum, and Hyperledger etc., researchers from universities and relevant organizations, businesses in this space, civil society and financial regulators to discuss the better governance for decentralized financial ecosystem.

The regulator also holds international meetings called the Blockchain Round-Table (BCRT), with the participation of various stakeholders, financial regulators, and blockchain experts from around the world. The aim of this event is to “deepen the understanding of issues regarding the financial system based on decentralized financial technologies, using the outputs of MJRP.” A roundtable, held in March, was attended by global regulators, central banks, and other industry participants such as the Financial Stability Board (FSB), Bundesanstalt für Finanzdienstleistungsaufsicht (Bafin), Banque de France, Dubai Financial Service Authority, Hong Kong Monetary Authority, Monetary Authority of Singapore, U.K. Financial Conduct Authority, MIT Media Lab, and University of Cambridge.

BG2C will be held as a spin-off from a regular fintech meeting co-organized by the FSA and Nikkei Inc. called “FIN/SUM,” which has already been held four times. The latest one took place in September, where the FSA discussed “the current developments and growth inherent to Japan’s fintech” with the global community. The event aimed “to create a global eco-system and new form of cooperation and collaboration among various fintech stakeholders, in which Japan serves as a hub,” the FSA detailed.

What do you think of Japan’s FSA hosting a decentralized financial conference and inviting stakeholders from around the world to participate? Let us know in the comments section below.

Images courtesy of Shutterstock and the Japanese government.

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