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Bitcoin: Regulation is not bad news for BTC and other cryptocurrencies, says BIS Quarterly review

Anvita M V



Bitcoin: Regulation is not bad news for BTC and other cryptocurrencies, says BIS Quarterly review
Source: Unsplash

Recently, the Bank for International Settlements [BIS] published a Quarterly review. In the document, authors Raphael Auer, Principal Economist in the Monetary Policy unit [BIS], and Stijn Claessens, Head of Financial Stability Policy department [BIS] discussed the impact of national regulatory news on cryptocurrencies.

According to the report, despite crypto-assets having no formal legal homes and being traded internationally, news events about national regulations have a notable impact on them. The report stated:

 “Part of our interpretation is that cryptocurrencies rely on regulated institutions to convert regular currency into cryptocurrencies.”

Furthermore, the report stated that the international arbitrage can be limited. Explaining in brief, the report stated that agents will not be able to easily access cryptocurrencies’ markets offshore due to the need of having a bank account in a foreign jurisdiction.

The report suggests that factors such as the above create market segmentation and fragmentation across jurisdictions, which binds national market regulation to a certain extent. As an example, BSI spoke about a market segmentation called “Kimchi Premium”.

Kimchi Premium indicates that the price of Bitcoin in Korea regularly exceeds that of the U.S at certain times by over 50%. BIS stated that this trend suggests limitations in cross-border trading.

However, the BSI stated that it was possible for regulatory measures to be flexible across borders. Giving an example it said, Bitcoin trading shifted massively toward Asian countries when China spoke about possible strict regulatory framework on Bitcoin, in January last year.

Concluding the analysis, BIS stated that despite the borderless and entity-free nature of cryptocurrencies, regulatory actions and news regarding regulatory actions have a deep impact on the cryptocurrency markets in terms of valuations and transaction volumes. It stated that in the current scenario, authorities around the globe have a scope to make regulation effective.

Author Raphael Auer stated:

“Overall we find that there is scope to apply regulation, should authorities decide to do so. and we also find that regulation is not necessarily bad news for the cryptocurrency industry. Many cases of fraud and theft, be a hacking, document that it could benefit from a well defined legal status.”

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Anvita Mysore Vadiraj is a full-time content writer at AMBCrypto. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies.


HitBTC responds to allegations of insolvency, refutes claims made by Redditors




HitBTC responds to allegations of insolvency
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HitBTC, a Hong Kong-based exchange has been the center of accusations among users on Reddit, Twitter, and other forums. HitBTC users started complaining about issues regarding withdrawal and extensive procedures after one particular user @ProofofReserach put out a thread alleging insolvency of HitBTC.

To put an end to all the accusations, HitBTC has broken its silence with a blog post explaining their side of the story. According to HitBTC, their systems performed well during the winter of 2017-18, however, HitBTC mentioned that due to overwhelming demand for the services, they experienced bottlenecks at an operational level.

Referring to the BitcoinExchangeGuide article, HitBTC responded:

“A widely quoted article, in its entirety, is based on only 2 AML cases. One of them was initiated as part of the investigation into the December, 2018 BTCP security breach, at the request of the coin’s core team. Unfortunately, there is no clear indication of the nature of the second case that can be discerned from the article. The author of the article failed to track the deposit/withdrawal dynamics that did not uncover any irregularities. A simple block explorer or our public System Monitor would suffice for these purposes”

Additionally, referring to the altcoins being added and removed from the platform, the exchange said that they were honored to work with a diverse range of projects, however, since the crypto sphere was still nascent, there were lapses in their judgment in assessing the integration partners. With the above-mentioned prominent cases, HitBTC also addressed other topics.

@ProofofResearch replied to HitBTC’s blog:

“Is there a reason why you’re unable to tell people us where your Bitcoin storage is at? If what I published is as untrue as you claim it is, then providing a wallet address where your Bitcoin funds are stored will go a long way in *proving that*.”

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