Per­haps the big­gest boost for cryp­tocur­ren­cies came from Fin­land’s cen­tral bank econ­o­mists, who called the in­fra­struc­ture be­hind cryp­tocur­ren­cies such as Bitcoin “revo­lu­tion­ary” and praised its abil­ity to pre­vent ma­nip­u­la­tion.

In Flight Magazine - - GROWING BIT BY BIT -

The com­bined mar­ket value of all cryp­tocur­ren­cies in cir­cu­la­tion reached $170 bil­lion by the end of Au­gust 2017. That’s 850 % higher than at the be­gin­ning of the year, ac­cord­ing to CoinMar­ketCap, a lead­ing cryp­to­coin prices and mar­ket cap­i­tal­i­sa­tion tracker web­site. It is no sur­prise that this kind of growth sparked much hand-wring­ing among reg­u­la­tors and cen­tral banks, who are still un­de­cided as to whether cryp­tocur­ren­cies should be clas­si­fied as a com­mod­ity, an as­set or a form of cur­rency.

ARE CRYP­TOCUR­REN­CIES MONEY?

That might seem like an odd dis­cus­sion to be hav­ing. But one of the ba­sic func­tions of cur­rency is to fa­cil­i­tate trans­ac­tions in a timely man­ner. And to pro­tect the se­cu­rity of the blockchain (the tech­nol­ogy be­hind cryp­tocur­ren­cies such as Bitcoin), the pro­cess­ing of Bitcoin trans­ac­tions is some­times very slow.

Due to re­stric­tions on the limit of Bitcoin trans­ac­tions which can be com­pleted in a day, it may take a few days to com­plete a sin­gle trans­ac­tion, ren­der­ing the cryptocurrency un­able to ful­fil the ba­sic func­tion of money at times. Pri­vate blockchains can speed up trans­ac­tions, but they are not pop­u­lar and avail­abil­ity is limited.

MONEY WOR­RIES

The call to bet­ter reg­u­late cryptocurrency gained mo­men­tum af­ter the In­ter­na­tional Mone­tary Fund (IMF) is­sued a staff dis­cus­sion note stat­ing that banks should con­sider in­vest­ing in cryp­tocur­ren­cies: “Rapid ad­vances in dig­i­tal tech­nol­ogy are trans­form­ing the fi­nan­cial ser­vices land­scape, creat­ing op­por­tu­ni­ties and chal­lenges for con­sumers, ser­vice providers and reg­u­la­tors alike.”

Any whole­sale adop­tion by the bank­ing sec­tor would clearly es­tab­lish a huge mar­ket for cryp­tocur­ren­cies, but the traf­fic isn’t mov­ing en­tirely one way. Chi­nese reg­u­la­tors dealt a huge blow to the crypto mar­ket at the be­gin­ning of Septem­ber when the Peo­ple’s Bank of China made it il­le­gal to raise funds through Ini­tial Coin Of­fer­ings (ICOs). An ICO is a fundrais­ing tool that trades fu­ture cryp­to­coins in ex­change for cryp­tocur­ren­cies of im­me­di­ate, liq­uid value.They have be­come an easy plat­form for dig­i­tal cur­rency geeks to raise funds quickly. In sim­pler terms, ICOs are a crowd­fund­ing plat­form for fu­ture cryp­to­coins. They have al­ready raised $2.32 bil­lion, ac­cord­ing to in­dus­try web­site Cryp­to­com­pare.

WORLD­WIDE RE­AC­TIONS TO CRYP­TOCUR­REN­CIES

China is get­ting stricter in gen­eral. It was even re­ported that it may ban the trad­ing of vir­tual cur­ren­cies on do­mes­tic ex­changes en­tirely. If this goes ahead, it will cer tainly dampen the en­thu­si­asm around the sec­tor. But there al­ways seems to be some bet­ter news around the cor­ner, and more over­sight may well gen­er­ate the con­fi­dence that can over­come con­cerns.

The Rus­sian fi­nance min­istry is push­ing to reg­u­late the use of cryp­tocur­ren­cies in the coun­try by the end of 2017, while the coun­try’s cen­tral bank has been work­ing on reg­u­la­tion for dig­i­tal cur­ren­cies since the be­gin­ning of the year. Per­haps the big­gest boost for cryp­tocur­ren­cies came from Fin­land’s cen­tral bank econ­o­mists, who called the in­fra­struc­ture be­hind cryp­tocur­ren­cies such as Bitcoin “revo­lu­tion­ary” and praised its abil­ity to pre­vent ma­nip­u­la­tion.

There has also been recog­ni­tion for cryp­tocur­ren­cies in coun­tries such as Aus­tralia and Ja­pan, which are both im­ple­ment­ing poli­cies to le­galise cryp­tocur­ren­cies ex­changes. Ja­pan has made it manda­tory for Bitcoin ex­changes to reg­is­ter with reg­u­la­tors and un­dergo an­nual au­dit­ing by cer­ti­fied ac­coun­tants.

Sin­ga­pore’s cen­tral bank noted that the func­tion of dig­i­tal tokens went be­yond sim­ply be­ing a vir­tual cur­rency, while as­sert­ing some over­sight. It said that ICOs would have to be ap­proved or recog­nised by the bank or recog­nised un­der Sin­ga­pore’s Se­cu­ri­ties and Fu­tures Act.

In the US, the Se­cu­ri­ties and Ex­change Com­mis­sion echoed

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