Following the United States and China, other countries are also expected to increase the level of regulation on cryptocurrencies (virtual currencies) such as bitcoin.
As institutional investors enter the cryptocurrency market one after another, regulatory authorities in each country believe that it is necessary to strengthen related regulations even to protect consumers, and are stepping up measures to strengthen regulations.
Already, the US and China have tightened the relevant regulations. Because of this, Bitcoin recently crashed and fell to the $32,000 level.
◇ Prohibition of mining as well as trading in China: China is the country that has taken the strongest measures.
China’s central bank, People’s Bank, said on Weibo on the 18th, “Cryptocurrency is not used in real life at all. It is also illegal to trade derivatives. If caught, they will be punished.”
On the 21st, Deputy Prime Minister Liu Heo announced that the mining and trading activities of bitcoin are threatening the entire financial system, and that it will be tightly cracked down.
The Financial Stability Development Committee of the State Council, held by Deputy Prime Minister Ryu, said in a statement after the meeting that it will intensively crack down on illegal activities in the capital market related to bitcoin and secure the stability of the stock, bond, and foreign exchange markets.
In particular, the committee declared that it would enforce strict crackdowns on bitcoin mining as well. In the meantime, China has banned bitcoin trading, but has been closing its eyes on mining.
The ban on bitcoin mining is a megaton-level bad news that will have a tremendous impact on the cryptocurrency market. This is because China accounts for 65% of the world’s bitcoin mining, according to the University of Cambridge in the UK.
◇ The United States also tightened regulations, must report more than $10,000: As China tightened regulations, the United States also began to strengthen regulations.
On the 20th, Jerome Powell, chairman of the Federal Reserve System (Fed), a central bank in the United States, said that cryptocurrency threatens financial stability, suggesting strengthening regulations, while turning the market’s attention to the’digital dollar’ recognized by the government (CBDC). In order to do so, it announced that it plans to begin discussions on the digital dollar and publish a report this summer.
On the same day, the Ministry of Finance also warned that cryptocurrency would be subject to taxation for being used for illegal activities such as tax evasion. The Ministry of Finance added that cryptocurrency transactions over $10,000 must be reported.
◇ Possibility to come up with EU-related measures: As the US and China strengthened the related measures one after another, the possibility of the EU also following them increased.
The European Central Bank (ECB) recently pointed out in its’Financial Safety Report’ that “cryptocurrency is consuming a lot of electricity, adversely affecting global warming, and is penetrating into Europe.” The ECB added, “The cryptocurrency craze is similar to the 17th century tulip craze.”
Experts say that the ECB’s evaluation of the cryptocurrency craze as similar to the 17th-century tulip craze opens the possibility of cracking down on cryptocurrencies.
◇ Indian commercial banks stop trading with cryptocurrency exchanges: India does not prohibit bitcoin trading like China.
However, commercial banks are putting pressure on the cryptocurrency market by stopping transactions with cryptocurrency exchanges.
According to local media such as Times of India (TOI), commercial banks in India recently stopped trading with cryptocurrency exchanges by stopping the transfer of funds to cryptocurrency-related accounts.
The Reserve Bank of India (RBI), the central bank of India, has not ordered banks to stop transacting with cryptocurrency exchanges, but the banks themselves are continuing to stop trading with cryptocurrency exchanges to reduce risk, TOI said. .
As cryptocurrency advances, countries around the world are tightening cryptocurrency regulations. It could be called the’paradox of success’.
