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Chinese Central Bank Reaffirms Its Sentiment: Blockchain – Not Bitcoin

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The Shanghai branch of the People’s Bank of China recently commented the situation revolving around cryptocurrencies. As the announcement published in the news this Friday shows, the Chinese central bank observed a resurgence in the cryptocurrency related speculation through ICOs, IEOs, STOs and other capital raising or token distribution methods.

The crypto news show the Chinese central bank announcement in full, continuing to argue about the sale of tokens for Bitcoin, Ethereum and other virtual currencies and how it remains “essentially unauthorized illegal public financing, suspected of illegal sale of tokens, illegal issuance of securities and illegal fund-raising.”

The PBoC Shanghai branch also added that crimes via cryptocurrencies have “seriously disrupted the economic and financial disorder.” As such, the Chinese central bank noted that it will keep “monitoring the virtual currency business activities within the jurisdiction,” which will be “disposed of immediately” if discovered.

The Chinese media and analysts echoed this decision, which comes shortly after the leading state-run publicaiton named Xinhua released an entire article about Bitcoin. The article translates to ‘Bitcoin: The First Successful Application of Blockchain Technology’ and was seen by many on Twitter – being described as a groundbreaking development for the crypto space.

The head of the crypto focused venture fund Avon Ventures (which is a fund that is affiliated with Fidelity) reminded his followers that this article – while explaining the ins and outs of Bitcoin – calls the cryptocurrency “highly concentraded/centralized” phenomena and something that is bad for the climate or used for black market transactions.

What’s important at this point is the fact that the Chinese central bank is the first to bash digital assets through an article. The People’s Daily which is another state-run outlet in China reminded the people that Xi’s support for blockchain does not equate to support for crypto earlier this year, noting:

“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”

With a mixed climate and mixed reactions from the media, it is up to the Chinese to decide what does Bitcoin present and what could it change in the national and global economy.

DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at editor@dcforecasts.com

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Regulation

Hawaiian Banks Could Start Storing Digital Assets With New Bill

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Hawaiian Banks will be allowed to store digital assets with the help of the new Senate Bill 2594 which was passed in the first reading. In our crypto news, we find out more about what this bill can do for the banks.Storing bitcoin has always been a question of interest and now most users will have the ability to store them in a bank. Representatives in the Senate last week introduced Senate Bill 2594 which will make it legal for Hawaiian banks to store crypto assets including digital securities, open blockchain tokens, and virtual currencies.The bill strongly implies Ethereum, Bitcoin and other decentralized coins that will be able to be stored by the banks if the bill is passed which could mark a strong step forward in the Bitcoin security game for the average user. Just because the bill was approved in the first reading, doesn’t mean that the banks in Hawaii will jump on the Bitcoin team but it can be presumed that the lawmakers are responding to the demands of the people. The banks may not be the only mainstream institution that will start offering crypto-asset custody.Passing new legislation in Germany’s parliament as well will also make it easier for German banks to sell and store digital assets and as per Reuters reports in December, people were familiar with the matter which revealed that large Dutch Bank ING is also working on a crypto custody project. Other centralized institutions holding cryptocurrency will go against the trustless and anti-bank ideas of something such as Ethereum and Bitcoin which are blockchains that both promote decentralization but it could help increase the adoption of digital assets.This is not the only potential legislation that has crypto in the center of attention in the US. The US House Representatives DelBenet, Soto, Emmer, and Schweikert introduced the Virtual Currency Tax Fairness act of 2020. If this bill becomes law, it would solve a huge issue in spending cryptocurrency for daily transactions and smaller transactions from crypto to fiat will not be a subject to potential capital gains taxes that ‘’steal’’ the wealth of Bitcoin holders.The act will make sure that the crypto transactions where the gains are made by individuals will be under $200 and will be exempt from capital gains taxes which will allow Bitcoin buyers to buy almost any everyday items including coffee without having to deal with taxes and the IRS. There are also a lot of people in the US politics that are huge fans of Bitcoin that want to champion the bill if it ever reaches the desks.
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Regulation

Tax Agencies Level Up Efforts To Hone On Crypto Tax Evasion

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Crypto tax evasion is a big thing in 2020 and people don't expect anything to change, the cryptocurrency news show. The previous year raised expectations that stablecoins would bring a mass adoption of cryptocurrencies. But this year, we can definitely see some movements and are seeing that tax agencies are levelling up their efforts to hone on the crypto tax evasion.2020 seems to be dousing the hopes with ever-tightening regulation that is putting pressure on investors and companies alike. The first complication came only 10 days into the year. In early January, the European Union and its landmark Fifth Anti-Money Laundering Directive (5AMLD) was signed into law.Meanwhile, the law is the latest evolution of EU's response to the Panama Papers scandal in which a leak of over 11 million documents uncovered the opaque financial networks used by the world's richest and most prominent individuals.The tax agencies level up their regulation now and lawmakers are constantly striving to tighten the legal loopholes which would allow for the world's richest companies and individuals to avoid paying their dues. There are still many states which willingly provide less legally restrictive environments.From the 5AMLD initiative to the central bank digital currencies, the Bitcoin and altcoin news show that governments and regulators are acting on their belief that the identities of individuals behind anonymous transactions should be made available to authorities upon request.Regulatory changes are coming and tax agencies level up many things. According to the Dash Core Group Chief Marketing Officer Fernando Gutierrez, “This was all bound to happen.” As he summarized in an email sent to one crypto media outlet:
“All these changes will make anonymity more difficult for the average consumer, as more exchanges comply and implement KYC. Those exchanges who don't will be forced to jump from jurisdiction to jurisdiction, which will impose extra costs that only those committed to anonymity will be willing to pay. For criminals, this will change nothing because they are in that group, among many others who are not criminals, who are willing to pay more.”
Regulation can affect crypto in many different ways and regulators are already preparing new laws now. It is certain that if this happens, an intense debate will also occur among investors, industry leaders and regulatory bodies.
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WEF2020 Announces Global Consortium For Regulating Bitcoin

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At the WEF2020 in Davos, Switzerland, there was a significant mark on the crypto market and the World Economic Forum announced the first global consortium focusing on creating a regulatory framework for the governance digital currencies including bitcoin and stablecoins. In our latest bitcoin news today, we find out more about their ideas.The World Economic Forum for 2020 happened the past week in Davos and cryptocurrencies were the center of attention. Yesterday during the last day of the consortium, the forum announced the creating of the first Global consortium for Digital Currency Governance. It will mainly consist of financial institutions, government representatives, international organizations, leading companies, academics, NGOs, technical experts and other members of the Forum’s communities.The report showed that if digital currencies receive proper financial inclusion, they will have to get paired with good governance. Therefore at the WEF2020, the forum discussed whether it is needed to establish a framework of regulations by implementing innovative approaches. In order to do that, the participants will have to use ‘’efficiency, speed, inter-operability, inclusivity, and transparency.’’ The Consortium will work with both the private and public sectors to explore the presented opportunities.According to the founder and Executive Chairman of the WEF, Klaus Schwab, ‘’ digital currency, a cross-cutting topic that requires input across sectors, functions, and geographies, is a key area of interest for the Forum.’’ The Governor of the Bank of England also commented:
 “Governance is the core pillar of any form of digital currency. It is critical that any framework on digital currencies ensures security, efficiency, and legitimacy of payments while ensuring fair and open competition. We welcome the WEF’s platform to help develop a robust governance framework for inclusion through digital currencies.”
As per the recent reports, the efforts of creating a regulatory framework on cryptocurrencies are getting more serious. As of this month, the European Union introduced an updated version of the 5th anti-money laundering directive and had increased regulatory focus. All of the crypto-related businesses are operating from Europe and they have to follow the rules which include a more in-depth know your customer process, filling suspicious activity reports and conduct transaction monitoring with law enforcement.  After the WEF2020, the world watchdogs will try to establish a framework of regulations for crypto so it will be extremely interesting to see whether this will be beneficial for the market.
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Germany Increases Costs For (Some) Crypto Firms By $250k

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Germany, a country known for its leading economy in Europe has recently updated its cryptocurrency laws and made it illegal for new firms to launch crypto trading, custody services and issuance of tokens. From January 1, Germany increases the costs for some crypto firms and the German Banking Act stated that crypto assets now qualify as financial instruments.In that manner, crypto exchanges and custodians now require a license from the German Federal Financial Supervisory Authority (BaFin). However, the cryptocurrency news reports did not note that if a company is founded in Germany after January 1, it is now illegal for them to issue tokens or offer custody/trading services.
"They have to now set up a new legal entity since January 1 has passed," explains Philipp Sandner, who is a professor at the Frankfurt School Blockchain Center. "But this new legal entity would be illegal for custody, trading and issuing."
The new laws show that Germany increases costs and that all companies founded after January 1 will need a BaFin license to offer these services. Meanwhile, the companies founded before January 1, 2020 will benefit from 'grandfathering' until November 2020.The cost of acquiring a BaFin license could be prohibitive for new startups, both Sandner and one lawyer explained.
"For companies (be it startups or larger companies such as banks), the license induces costs of approx. USD 250,000," they say. "Not every startup will be able to bear these costs. The small startups might be driven out of the market; the larger ones and the incumbents will probably apply for the license."
As Germany increases costs for crypto firms, many wonder why is this the case. The truth is, the government is sought to introduce a law which might end up driving startups "out of the market" as experts noted.Both experts noted that the government had the opposite intention in mind and wants to encourage mainstream adoption of cryptocurrency and blockchain technology, rather than leaving these sectors open for unregulated firms. However, the costs at this point are big for many crypto firms which is why the crypto climate in Germany is not that good.Meanwhile, the latest Bitcoin price news show that the cryptocurrency has fallen by 6% due to the situation in China.
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