CRYPTO MOVERS AND PRICES
Bitcoin and Altcoin Prices by TradingView
Crypto was aggressively selling off this morning, with BTC threatening a break below 30,000. Alt-coins are leading the selloff, with multiple tokens in the Top 10 seeing losses in excess of 40%.
Crypto Story of the Day
3 Chinese self-regulatory organizations have issued a statement reiterating that financial institutions in the country are barred from engaging with crypto businesses. The note, which only confirms long-standing policy towards crypto in China, has been mischaracterized as a new crackdown on crypto by the media.
Yesterday, the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China issued a joint statement which reiterated limitations on providing services to or engaging with crypto-related businesses.
The statement notes that crypto prices have both sharply increased and fallen recently, causing disruptions to “economic and financial order.” As the statement explained, the new notice was being issued as a continuation of previous policies from the People’s Bank of China (PBOC).
Chinese authorities have taken a number of steps in the past to limit the development of crypto in the country. For example, in 2017 the PBOC placed widespread restrictions on the selling and buying of crypto in China. These restrictions included the designation of ICOs as illegal and banning banks and other financial service providers from offering services to firms involved with ICOs. Crypto exchanges based in the country were also ordered to shut down in 2017.
In 2013, Chinese authorities ordered local banks to cease all services to BTC and crypto-related businesses. At the time, the PBOC cited capital flight risks as motivating the move: “As Bitcoin transactions can be done anonymously and are not restricted by location, it's difficult to monitor capital flows and it therefore facilitates money laundering and financing for terrorist activities.”
In April, the Deputy Governor of the People's Bank of China, Li Bo, said the institution views “[BTC] and stablecoins” as “investment alternatives” and that the country will keep its ”current regulation.” Li was responding to a question on whether China will maintain its current stance towards the asset class.
Li explained that China is considering “regulatory requirements” in order “to prevent the speculative nature of such assets [from creating] any serious financial stability risk.” Until regulators “have a clear idea what kind of regulation” is needed, current regulations will remain in China, according to Li.
BTC and crypto have all but been made illegal in China over the last decade. The country took highly-restrictive measures against the space while it was in its infancy. As such, media reports that suggested China has introduced any new measures that haven’t previously existed are misleading. Generally, reporting on foreign crypto regulation has to-date often missed particular nuances, like restrictions in India, Turkey, and Nigeria.
At the same time, exaggerated anxieties related to BTC regulation in the West have often amplified inaccurate reporting on the topic. Despite the reiteration from the organizations, the official Chinese stance towards BTC and crypto remains unchanged.
Please sign up for a free trial of FRNT Financial Morning Note.