China's Virtual currency regulation further intensified

 China prohibits overseas exchanges to provide Virtual currency services to domestic residents.

Four months after the voices of the three major associations, the virtual currency market has again undergone tremendous changes, and the central bank once again "proclaimed" the risks of virtual currency speculation.

On September 24, the Central Bank and other ten departments issued the "Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading Hype" (hereinafter referred to as the "Notice"), clarifying the essential attributes of virtual currencies and related business activities, and establishing a sound response to the risks of virtual currency trading hype To strengthen the monitoring and early warning of the risk of virtual currency trading speculation, and build a multi-dimensional and multi-level risk prevention and disposal system.

The relevant person in charge of the People's Bank of China said in response to reporters that the "Notice" once again emphasized the virtual currency, such as Bitcoin, Ethereum, etc., that have the characteristics of being issued by non-monetary authorities, using encryption technology, distributed accounts or similar technologies, and existing in digital form. The so-called stablecoins, including TEDA coins, do not have the same legal status as legal tender, and cannot be circulated in the market as currency. The "Notice" clearly stated that virtual currency exchange, virtual currency trading as a central counterparty, provision of matching services for virtual currency transactions, token issuance financing, and virtual currency derivative transactions are all illegal financial activities and are strictly prohibited. , Resolutely banned in accordance with the law; overseas virtual currency exchanges to provide services to Chinese residents through the Internet are also illegal financial activities.

As of press time, the price of virtual currency has plummeted again. Within 24 hours, Bitcoin fell 4.24% and Ethereum fell 8.29%.

NDRC Lists CryptoCurrency "Mining" as Industry to Eliminate

Virtual currency "mining" activities refer to the process of calculating and producing virtual currency through special "mining machines". On September 24, the official website of the National Development and Reform Commission issued the "Notice of the National Development and Reform Commission and Other Departments on Regulating Virtual Currency "Mining" Activities." 

CryptoCurrency Mining: More Negative than Possitive

The energy consumption and carbon emissions by cryptocurrency mining are large, while the contribution to the national economy is very low. And the driving effect on industrial development and technological progress is limited. In addition, the risks derived from virtual currency production and trading are becoming more prominent, and its blind and disorderly. Development of cryptocurrency mining will have an adverse impact on the promotion of high-quality economic and social development and energy conservation and emission reduction. Remediation of crypto currency "mining" activities is of great significance to promote the optimization of my country's industrial structure, promote energy conservation and emission reduction, and achieve the goal of carbon peak and carbon neutrality on schedule.

Strengthen the dual control of energy consumption in the newly-added virtual currency "mining" project. Incorporate the prohibition of new virtual currency "mining" projects into the energy consumption dual control assessment system, strictly implement the energy management and control responsibilities of local governments, and conduct energy dual control assessments in areas where new virtual currency "mining" projects are discovered and verified Calculate energy consumption by doubling the energy consumption of new projects.

Chinese Central Bank Defines Cryptocurrency Business as Illegal

 Recently, ten China's governmental departments including the People's Bank of China issued the "Notice on Further Preventing and Disposing of the Risks of Hype in Virtual Currency Transactions" (hereinafter referred to as the "Notice"). The relevant person in charge of the People's Bank of China answered reporters' questions on related issues.

1. What is the context of the "Notice"?

In recent years, Bitcoin and other virtual currency trading hype activities have become widespread, disrupting economic and financial order, breeding money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities, seriously endangering the safety of people's property. In accordance with the decision and deployment of the Party Central Committee and the State Council, the People’s Bank of China, in conjunction with relevant departments, has issued a series of policies and measures to clarify that virtual currencies do not have legal tender status, prohibit financial institutions from developing and participating in virtual currency-related businesses, and clean up and ban domestic virtual currency transactions and token issuance financing The platform continued to carry out risk warning and financial consumer education, and achieved positive results. In order to establish a normalized work mechanism and always maintain a high-pressure crackdown on virtual currency trading activities, the People's Bank of China and other departments have combined the new risk situation and drafted the "Notice" based on the previous work experience.

2. How does the "Notice" characterize virtual currencies and related business activities?

Challenge of cryptocurrency: a currency war is coming?

With the digitization of currency, come both dangers and opportunities.

Cryptocurrencies are challenging the U.S. dollar's long-standing dominance of world finance.

The war on currencies is intensifying: for the first time in a century, the dominance of the dollar has been challenged. The rise of cryptocurrencies and "stable currencies" has prompted people to rethink what currency is, who is the regulator of currency, and what it means when currency is not controlled by a national government. The U.S. dollar itself may need to be completely reformed and transformed into a digital currency that can move instantaneously to rival Bitcoin or any other token.

Affected by the rise of cryptocurrency, the old front of the national currency is being redrawn. These privately issued currencies are dividing the monetary system, banks, and payments. This scene reminds people of the "Wildcat" currency period in the mid-nineteenth century, when many banks issued their own currencies, prompting the Federal Reserve to issue national currencies. If there is no "no doubt" currency, the efficiency of business operations will become lower. If there is competition among multiple currencies in economic activities, the government runs the risk of losing control of fiscal and monetary policies.

What kind of storm will the new currency set off? Nobody knows. On the blockchain network, there are many cases of cryptocurrency and applications. But this technology is so disruptive that it is spurring a wave of new regulatory measures. Governments all over the world have an incentive to consider digitizing currencies, at least to maintain competitiveness and maintain their control over economic interests. The Fed itself will also release related reports in the near future.

Innovations Required to deal With Virtual Currency Challenge

On September 24, Wen Xinxiang, an official from China's central bank, the People's Bank of China (PBC), delivered a speech at the 10th China Payment and Settlement Forum. Wen said at the meeting that the challenge of virtual currency is huge. The traditional financial system is facing the "reinvented" virtual currency and its related "dark web" world. At present, it mainly focuses on the link between "virtual currency" and the traditional financial system, and adopts measures such as "Payment Break" to monitor and intervene. To prevent, punish and punish also requires legal basis and innovative application of technological means.

Virtual Currency Challenge

Wen pointed out that in recent years, the rapid development of virtual currencies represented by Bitcoin has attracted widespread attention from regulatory agencies in various countries. As of now, the total market value of Bitcoin has reached approximately US$800 billion, and the overall market value of stable coins has exceeded US$120 billion. Generally speaking, virtual currencies can be roughly divided into two types. One is represented by Bitcoin, and the attributes of virtual assets are more prominent, which to a certain extent become a "reservoir" of excess liquidity; the other is based on TEDA coins. The stable currency represented is more of a payment tool. From the perspective of infrastructure, the blockchain is equivalent to a virtual currency payment system and a virtual currency transaction database; a virtual currency exchange is equivalent to a central counterparty, which partially assumes the functions of a market maker.

Chinese Central Bank's Actions Against Cryptocurrency: Will Mining Machines Sales Be Affected?

On September 24, the People's Bank of China issued a notice to further prevent and deal with the risks of virtual currency transaction speculation, and stated that it strictly prohibits illegal financial activities related to virtual currency. This means that "mining" in China is becoming increasingly impossible.

The Notice pointed out that virtual currencies have no legal standing in the country and cannot be used as currency in the market. In addition, the state strictly prohibits and cracks down on financial activities such as the exchange business of legal currency and virtual currency, the exchange business between virtual currencies, the buying and selling of virtual currencies, the provision of information intermediary and pricing services for virtual currency transactions, and illegal fund-raising.

The matter of "mining" is an illegal activity in China, and it must be held accountable in accordance with the law. However, although "mining" activities are not as active and obvious in China as abroad, many technology companies still smell the business opportunities, and produce and sell various "mining" mining machines and other equipment. With physical stores in some areas, it can be said that the mining wave has brought considerable economic benefits to these technology companies.

When it comes to mining boom, the graphics card is definitely the biggest influence on netizens. As the main hardware part of "mining", the graphics card is naturally the favorite of many "miners". Due to the mining boom and the global shortage of cores, the price of graphics cards can be said to advance all the way. Not only has the price not dropped, what's even worse, it's hard to get a single card even at such rocketed prices.

Fate of Virtual Currencies Under Strict Regulatory Measures

 September 24, 2021 is another unforgettable day, at least for virtual currency stakeholders!

Just as the whole of China was immersed in the beautiful anticipation of the upcoming National Day holiday, a heavy blow from the governmental sectors made these uninteresting. Everyone must have seen the content. The first is that ten departments including the National Development and Reform Commission issued a notice on the rectification of virtual currency mining activities, requiring all regions, departments and related companies to attach great importance to the rectification. Prevent and dispose of the risk of speculation in virtual currency transactions.

After the announcement was issued at 17:01 on the 24th, the currency circle was in an uproar, the market plummeted, almost all currencies plunged, and market sentiment was panicked. If these two explosive news are strictly enforced, users will basically be prohibited from participating in virtual currency transactions in the future. Later, we will see the intensity of the policy tightening. It is estimated that the currency circle will not be very good in the next short period of time. At this point, everyone must be psychologically prepared.

We might as well pay close attention to the impacts of this incident over the coming weekend. Although the previous precedents are all gone without severe aftermaths, this time I personally don't expect it to end hastily, and there should be follow-ups. This heavy blow has already caused market panic yesterday. Most retail investors have begun to sell their chips to realize cash, and the number of people who have realized cash and flees has continued to increase.

China: Virtual currency does not have equal legal status as official currencies

Today (Sept. 24th), the People's Bank of China issued a notice to further prevent and deal with the risks of speculation in virtual currency transactions. The notice pointed out that virtual currency does not have the same legal status as legal currency. Virtual currencies such as Bitcoin, Ether, and TEDA have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed accounts or similar technologies, and exist in digital form. They are not legal and should not and cannot be used as currency in the market. Use on circulation.

Virtual currency-related business activities are illegal financial activities. Carrying out legal currency and virtual currency exchange business, exchange business between virtual currencies, buying and selling virtual currencies as a central counterparty, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, virtual currency derivatives transactions and other virtual currency related Business activities suspected of illegal sale of tokens and tickets, unauthorized public issuance of securities, illegal operation of futures business, illegal fund-raising and other illegal financial activities are strictly prohibited and resolutely banned in accordance with the law. Those who carry out related illegal financial activities constitute a crime shall be investigated for criminal responsibility in accordance with the law.

Why Bitcoin bears want to lock the price below $46,000

This week's price trend shows that the Bitcoin bulls are a bit too enthusiastic about the expiration of the $3 billion Bitcoin option last Friday. The combined effect of various bearish factors this week was enough to bring the price of Bitcoin to its lowest level in 46 days, which almost erased the $2 billion September call (buy) option that expired on September 24. %.

There is still room for some surprises, especially considering that the deadline is 8:00 UTC September 24. However, the motivation for shorts does not seem to be great, because the test of less than $40,000 on September 21 resulted in the liquidation of less than $250 million in futures contracts.

On September 22, Evergrande Group confirmed that it would pay interest on onshore bonds, which eased some concerns about default. Despite this, investors still expect the company to miss the dollar-denominated bonds held mainly by international investors.

The recent volatility above the 48,000 USD on September 18th and 19th was not enough to break the resistance of the 20-day moving average. Considering that concerns about the spread of China's debt crisis have passed its peak, bullish people still hold the hope of "returning to the mean". In addition, the chairman of the US Securities and Exchange Commission (SEC) Gary Gensler did not take any short-term actions in an interview with the Washington Post on the 22nd.

Twitter Rolls Out Tipping Feature and Supports Bitcoin Payment!

 On September 23, local time, Twitter announced that it would allow users to use Bitcoin to tip their favorite content creators, that is, to reward contents.

This new feature, named Tips, will be rolled out to all Apple iOS phone users around the world this week, and will be available to Android users in the next few weeks. Previously, this feature has been tested in a small area for several months.

Twitter Accepts BitCoin to Tip Content Creators

According to reports, the launch of this feature is Twitter's latest move in fierce competition with rival platforms such as Facebook and Alphabet's YouTube. These platforms are competing for content creators that are popular with users, hoping to expand the user base and attract more advertisers.

In addition, the social media giant is constantly improving its website to help users get a safer experience. For example, Twitter is studying how to allow users to block specific words and sentences that they don't want to see in tweet replies. This move is essential to eradicate insults and abuse.

Rolls out tipping feature and supports Bitcoin payment among other efforts to pander to users! Do these measures help? Time will answer everything...