China

China takes its CBDC into the insurance industry

July 22, 2021 by Sahana Kiran

China has been making immense progress in terms of its central bank digital currency [CBDC]. While countries across the globe have just initiated the research phase of their native CBDC, China’s digital yuan is already being used by the public. After being employed across various sectors, the Chinese government has decided to induce the digital yuan into the insurance industry.

China took the lead in the development of CBDC and managed to get on a pedestal with its fast-paced approach. The latest news reveals how much progress the country has been making.

A news portal noted that the digital yuan had ventured into the insurance industry. This program is being carried out by a local branch of the People’s Bank of China [PBoC], and the policies were issued in Shenzhen, South China’s Guangdong Province. Shenzhen subsidiary of Pingan Property Insurance

China continues to stay ahead in the CBDC game

The first batch of the Chinese CBDC insurance policies was issued by the PBoC’s Shenzen branch. With its latest move, the central bank of the region along with the government hopes to expand the use of the digital yuan across several industries. Previously, the use of the CBDC was limited to merely e-commerce platforms and for online payments.

Speaking about the advancement of the digital yuan, Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China stated,

“As more users get used to making payments with the digital yuan and the market matures, the application scenarios will be able to expand from the insurance industry to more scenarios such as financial services, life services, and even the purchase of funds and trading in securities.”

While the country has been making headway in this area, certain US senators recently expressed angst against the use of the digital yuan during the 2022 Olympics. The senators suggested that the Asian country would employ the digital yuan to surveil American athletes.

However, the country’s central bank, PBoC, hit back and released a statement that read,

“The US politicians should abide by the spirit stipulated in the Olympic Charter, stop making sports a political matter and stop making troubles out of the digital currency in China.”

USA Senators urge Olympic committee to leave out American athletes from employing digital yuan

July 20, 2021 by Sahana Kiran

With China hosting the 2022 Olympics, certain officials from the USA seemed concerned about American athletes using the Chinese central bank digital currencies [CBDC], the digital yuan during their time in the Asian country.

China took a massive plunge into the development of a national digital currency. China went on to become one of the first countries to develop and issue its very own CBDC. China’s fast-paced development of the digital yuan certainly caught the eyes of the world. Several countries did not want China to garner an upper hand in the financial sphere, which led them to instigate their very own research and development in the field.

With the digital yuan came an array of rumours surrounding the asset. Numerous officials noted that the Chinese government would be able to track and trace the finances of those using the asset. Keeping this in mind, three senators of the USA went on to write a letter to the Olympic officials urging them to keep the athletes representing the country from using the digital yuan.

USA athletes won’t be using the digital yuan?

The letter signed by Republican senators Marsha Blackburn, Roger Wicker and Cynthia Lummis noted that American athletes should be refrained from accepting or even using the Chinese CBDC.

The senators went on to express fear over how the Chinese Communist Party, along with the country’s central bank, the People’s Bank of China [PBoC], could use the digital yuan to keep an eye on athletes during their stay in the country and even after they revert to the USA.

Elaborating on the same, the senators wrote,

“The integration of China’s digital currency into global commerce has many problematic privacy implications. These concerns are especially pronounced given the Chinese Communist Party’s use of new and emerging technologies to suppress the Uyghur minority, the people of Hong Kong, and those across China who strive for freedom of expression. These concerns are not hypothetical. Rather, digital payment platforms such as WeChat, are already being used to surveil, threaten, and arrest Chinese citizens.”

Bitcoin profitability expected to surpass 35 percent as users go all in

July 5, 2021 by Akash Anand

The cryptocurrency market has settled into a rhythmic motion of bullish crests and bearish troughs with major coins flipping the script. Bitcoin being the largest cryptocurrency in the market has had its fair share of scrutiny under the financial microscope. Even though BTC’s value was much below its all-time highs, factors such as profitability and number of new users.

Analysts also predict a rise in prices in the coming months if the peripherals continue to climb. The combined positive factors play a big role in boosting investor sentiment in the cryptocurrency ecosystem. The short-term rise could mainly be attributed to the recent miner exodus from China. As it stands, the Bitcoin market is expected to enjoy a profitability factor of 35 percent or more soon. Following this news, Compass CEO Whit Gibbs said:

“We are expecting a period of much higher mining profitability for Compass Mining clients. We expect miners to be approximately 35% more profitable.”

At press time, Bitcoin was trading for $34,239 with a total market cap of $ 641.9 billion. A 3.6 percent daily dip brought the cryptocurrency’s 24-hour trading volume to $24.36 billion. Bitcoin’s price action came after a bear run wiped off more than 27 percent of its total 2021 earnings. Despite this situation, proponents such as Blockcap founder Darin Fernstein were confident in the asset’s future growth. The mining exodus was also seen as an unexpected “gift” to the Bitcoin network.

Kazakhstan became the hub for a majority of cryptocurrency miners after China’s latest policy. Most of them opined that they would settle in a region where the government actually supports them rather than infringing upon their functions. One of the main reasons for this has been a mix of lack of transparent regulations and government lethargy.

3 reasons why Bitcoin [BTC] can rebound despite dull market conditions

July 5, 2021 by Chayanika Deka

Bitcoin [BTC] underwent a swift recovery, after topping out a little below $40k. The ongoing downside price action has left the investors concerned.

The latest side-way movement of price had taken shape since the dramatic fall in May and has extended to the new quarter as well. The drop was so damaging that it ended the winning streak for the digital asset which witnessed its prices surge above $60,000 for the first time in its decade-long history.

However, this trend could potentially come to an end as institutional players could soon push the asset’s price higher. Here are three reasons why a potential uptrend could be right in the inkling:

Institutional players’ comeback

One of the major recurring narratives for Bitcoin has undoubtedly been the Institutional adoption for both 2020 and 2021. While the entry of these players boosted the price of the token, after Tesla’s latest actions, institutional adoption seems to have taken a hit considerably.

But according to a key member of the crypto-analytic platform, Santiment, the price of the king coin can potentially continue to range until mid-July this year, before the institutional players in the market drive the new BTC resistance level up to $40k. The analysis also read,

“When you are enjoying yourself in the rain [especially when you were a child]. You lose track of all time. Bitcoin price is experiencing the same thing for this month.”

June-December 2019 Resemblance

The resemblance of Bitcoin’s current price action to that of June-December 2019 is uncanny. In fact, the flagship crypto-asset had surged all the way above the $14k in the last week of June 2019. Shortly after which it spiraled down as FUD entered the market in the form of Bitcoin Cash [BCH] hard fork, the then US President Donal Trump’s take on the token among other news.

Six months later, Bitcoin slashed over half of its gains and turned down to $6.5k. As a result of the decline, the charts saw death cross formation. However, as bulls bought the dips, Bitcoin recovered and slowly formed lower highs surging briefly to $10k.

Coming down to the present scenario, the latest trend could suggest a similar profit-taking phase, and a period of FUD that was sparked by Elon Musk’s announcement, China’s clampdown on cryptocurrency activities, etc.,

Grayscale Bitcoin Trust

Many well-known cryptocurrency analysts are of the opinion that the Bitcoin market could get a lift in July from the expiration of investor restrictions on the sale of shares in the Grayscale Bitcoin Trust [GBTC], and not downward pressure as earlier reported by JPMorgan strategists.

One of the main possibilities that some market speculators see is the foray investors to the coin market to buy BTC and repay crypt loans used for the purpose of financing their original purchases of the GBTC shares. Meaning, that while selling GBTC shares does not eliminate the risks of deeper discounts that could potentially ward off capital inflow, but, this adversary can be compensated by the repurchases of the cryptocurrency in the spot market.

Along the same line, Amber Group, the digital asset service provider tweeted,

“Lots of bearish chatter around GBTC unlocks whilst conveniently ignoring that in-kind subscriptions funded by debt will ultimately translate into spot buying,”

Digital yuan adoption soars as Beijing subway announces support

July 1, 2021 by Sahana Kiran

China’s central bank digital currency [CBDC], the digital yuan, has been under the spotlight for quite a while. The Chinese government’s fast-paced development put the asset on a pedestal. The latest news from the country affirmed that the government has been sprucing up the adoption of the digital yuan.

While several governments speculated that China hastened the development of its CBDC to garner financial dominance, a few others believed that the country was going on a digitalization spree. Nevertheless, cautioned by China’s plunge into CBDCs, an array of governments followed suit as they focused on developing their very own CBDC.

China, however, proved that it was way ahead in the game as it elevated the presence of CBDCs by inducing them into its transport system.

Digital yuan takes the Beijing subway

A recent report revealed that users of the Beijing subway would use their digital yuan to get around. This would mean that the program would allow access to customers through 24 subway lines and four railway stations. While this initiative has already made its debut, it is reportedly limited to those with an Industrial and commercial bank of China bank accounts.

Elaborating on the functions of this program, a customer service representative of the Beijing rail transit network stated,

“You need to download a mobile APP that is linked with your bank account to access to the service.”

Furthermore, Beijing’s digital travel experience isn’t limited to this as the region hopes to induce digital yuan across various sectors.

Once home to the most prominent Bitcoin mining farms in the country, China has given up this title to Kazakhstan. With China taking down several crypto platforms across the country, it seems to be focusing on the advancement of the digital yuan. Earlier in June, about 3,000 ATMs in Beijing were made available for the withdrawal as well as the deposit of the Chinese CBDC.

Crypto purchases banned by UK bank; Huobi prohibits Chinese users from trading crypto derivatives

June 29, 2021 by Sahana Kiran

One step forward, two steps back?

The progress made by the crypto industry over the last couple of months is impeccable. The demand for crypto hasn’t simmered down despite its recent downfall. Countries, as well as platforms across the globe, have been embracing and onboarding digital assets. Amidst this digital revolution, financial institutions like banks play a significant role. Unfortunately, while an array of banks worldwide have been putting forward crypto-friendly notions, a few others have been outrightly condemning the same.

Joining the latter, a prominent British lender, TSB, announced that it would be laying out rules that prohibit its clients from engaging in digital asset-related activities.

In a recent report by Insider, it was revealed that TSB would be banning its customers from purchasing cryptocurrencies. Fraud was one of the primary reasons behind the bank’s latest move. The bank reportedly believed that it would be too expensive to reimburse its clients in case of any untimely loss.

The bank’s spokesperson said,

“We take our obligation to protect customers extremely seriously and continually review merchants and websites with excessively high fraud rates.”

Several speculated that Binance’s recent feud with the Financial Conduct Authority influenced the bank’s decision. However, about 849 TSB clients’ funds were compromised through their Binance accounts between March 15th and April 15th, and this fact couldn’t have been overlooked either.

Crypto derivatives to remain a dream for Chinese users?

While TSB was taking down the crypto scene in the UK, Huobi, a prominent digital asset exchange, decided to exclude retail customers from the UK from trading crypto derivatives.

Huobi Global, in its updated user agreement page, pointed out that several countries would no longer be able to utilize the exchange’s crypto derivatives feature. This list included China, Taiwan, Israel, Iraq, Bangladesh, Bolivia, Ecuador, Kyrgyzstan, Sevastopol, and the UK.

China has been making headlines for its recent digital asset takedown. With the government shutting down numerous mining farms across the region, speculations of China embracing its CBDC, the digital yuan, and shooting down assets like Bitcoin [BTC], surfaced. The country could be headed towards a blanket ban on the industry.

CBDCs Get Green Signal from Bank of International Settlements

June 25, 2021 by Akash Anand

The topic of central bank digital currencies or CBDCs has been in discussion by regulators for a long time with many nations developing their own versions of it. Whatever remaining qualms the rest of the banking industry may have had about CBDCs seems to have changed after the latest approval by the Bank of International Settlements [BIS]. The document was the clearest signal yet from central banks that they are ready to fight any effort to undermine their key role in the global financial system.

Considered the central bank to all other banks, the BIS stated that if CBDC technology was not adopted by the banking world it would be left in the lurch by alternatives. The CBDC mentioned its latest directive in a list of recommendations released on June 23. According to the BIS, if banks remained stoic on their stance on the nascent technology, it would be overtaken by the Big Tech such as Amazon, Facebook, and Alphabet.

The release also included comments from BIS official Benoit Coeure who said:

“The train has left the station. It is not that we are getting carried away, we are just looking around. That [Big Tech overtake] is a place where you don’t want to be, where governments don’t want to be. The new trade wards are technology wars.”

Significance of BIS’s stance on CBDC

Coeure and the BIS’s statement comes at a time when global superpowers like China have CBDCs in the works. Although the digital renminbi had received a lot of traction during the initial announcement, it has since then dipped in terms of developmental progress. This lethargy shown by states is not something that would be seen by the mammoth technology giants swarming for dominance, said Coeure.

Coeure was not the only BIS official as he was also joined by his colleague Hyun Song Shin. Shin added that the onus was now on the authorities to decide whether citizens need digital IDs to use CBDCs. The other alternative would be a token-based cryptocurrency system that would keep transactions private. Both Coeure and Shin agreed that the BIS’s best pick out of the two would be going with the ID system.

Last year, the Bahamas became the first nation to launch a native CBDC, dubbed the Sand Dollar. Aside from China, other European nations such as France and Switzerland were also trying their hands at creating general purpose CBDCs.

Huobi’s decline in market share coincides with rise in Binance’s

June 24, 2021 by Chayanika Deka

The Chinese crackdown on cryptocurrency-related activities has had a serious impact. As a result, Huobi, which happens to be one of the largest cryptocurrency exchanges in the country, has been introducing stricter restrictions on its platform.

Due to concerns surrounding regulatory policies in China, in order to protect the interests of investors,Huobi had temporarily stopped a major chunk of services in derivatives trading such as futures contracts, exchange-traded products and other leveraged investment products to new users.

This, in turn, has facilitated exposure to other global exchanges as Chinese users now look for alternatives. Binance, for one, may see an influx of new users from the region. Along the same line, the well-known crypto journalist, Colin Wu, speculated,

“Huobi, China’s largest exchange, is afraid of regulation and actively restricts future functions, causing users to go to Binance. Binance’s futures trading volume has surpassed that of other exchanges. However, Binance may be too large to face a similar situation like derivatives exchange Bybit, that is, governments of various countries have successively warned and cracked down.”

Huobi’s diminishing market share in derivatives realm

For a long time, Huobi has battled to clinch the supremacy title in the country. Meanwhile, OKEx, which happens to be another exchange, has dominated the derivatives scene but Huobi, for the most part of 2020, remained tied with the long-standing giant BitMEX. In recent times, however, the market dynamics have changed considerably. While Binance always had more futures volume than Huobi, Wu pointed that the rise in the former’s market share coincided with the decline in the latter’s market share.

According to the latest charts compiled by data provider Skew, Binance was ranked number one, and has dwarfed other derivatives exchanges in terms of Bitcoin futures volume as well open interest [OI], closely trailing behind was OKEx. Huobi, on the other hand, slipped to the fourth position in terms of BTC futures volume and was ranked sixth in respect to BTC open interest.

Dogecoin [DOGE] slides to April-lows, no signs of bullish reversal

June 22, 2021 by Chayanika Deka

Dogecoin [DOGE] slipped to the seventh position following the market-wide tumble on 21st June. The combined valuation of the cryptocurrency market fell to $1.34 trillion while the meme-coin weekly losses extended to 40%. This was in response to China’s PBoC ordering domestic financial institutions to promptly curtail payment channels for crypto trading.

The volatility in the market has increased following the latest abrupt drawdown. However, retail traders do not seem to be buying the dip this time.

Dogecoin [DOGE] depreciated by nearly 22% over the past day which drove its price to $0.207, a low not seen since mid-April. At the time of writing, the digital asset held a market cap of $27.15 billion while registering a trading volume of $7.47 billion.

Dogecoin [DOGE] Daily Price Chart:

TWJ had earlier predicted the price go down as the trend paused after the formation of a continuation pattern on the daily Dogecoin [DOGE] chart. The low volume in the market has strongly impeded any scope of growth in the market.

While the 50 DMA [Pink] continued to resist the DOGE candles, the 100 DMA [Blue] also moved over them on Monday as the price fell after weeks of sideways price movement. The upsloping 200 DMA [Yellow] neared the candlestick arrangement.

The red closing bars of Awesome Oscillator depicted an increasing bearish momentum. The buying demand has taken a massive hit following the dump and hence a phase of bearishness as indicated by the MACD. The Relative Strength Index [RSI] also slid to the oversold conditions suggesting a sentiment of intense sell pressure in the coin market.

As Dogecoin breached critical support levels, no bullish signals emerged to demonstrate the formation of a bottom. Hence, there could be more downside potential. The key support levels for the meme-coin were found to be at $0.15, and $0.52. The resistance levels, on the other hand, stood untested at $0.39, $0.55 and $0.69 respectively.

China clampdown intensifies, lawmakers target crypto OTC merchants

June 21, 2021 by Chayanika Deka

China FUD is at it again. The country’s central bank PBoC has asked domestic financial institutions to promptly cut payment channels for crypto trading. The People’s Bank of China reportedly gathered a group of banks and mobile payment providers including Industrial and Commercial Bank of China, the Agricultural Bank of China, the Construction Bank of China, Postal Savings Bank of China, the Industrial Bank, and mobile payments app AliPay, for a meeting and urged them to stop providing financial services related to cryptocurrency.

Reiterating its 2017 stance, the PBoC further asked these platforms to sever links to the funding channels of crypto over-the-counter [OTC] merchants. It added that the banking establishments should monitor if any OTC traders are leveraging their services to offer on- and off-ramps for Chinese traders in a p2p manner.

Following the development, popular crypto investor, Lark Davis tweeted,

“China cracking down on the bank accounts of bitcoin OTC desks, this is getting serious!!!”

This comes right after Beijing pulled the plug on the massive Bitcoin mining operation of Sichuan province. It is yet another move by the Chinese lawmakers towards its effort to crack down on cryptocurrency activities in the country.

The PBoC cited concerns related to risky activities around cryptocurrency trading and went on to claim the repercussions have been severe disruption of the country’s financial infrastructure. According to the central bank, crypto trading has generated the risk of illegal money outflow across the border as well as money laundering.

Bitcoin Tumbles to China FUD yet again

The cryptocurrency has faced severe losses over the past couple of months as the country’s suppression of trading and mining activities intensified. The shut down of mining operations in the country led to a drop in Bitcoin’s hash rate which spiraled back to levels last seen in November 2020.