Different views on Bitcoin in Asia

tokyo — From clampdowns to a warm embrace, regulators in Asia have taken very different approaches to dealing with the Bitcoin phenomenon. Here are the developments in a few key markets: In mid-September, China’s central bank, the People’s Bank of China (PBOC), told virtual currency trading platforms based in Beijing and Shanghai to cease market operations.

Authorities also clamped down on Ethereum and any other electronic units that are exchanged online without being regulated by any country.

The PBOC said it wanted to fight “speculation” around the cryptocurrencies, which “seriously disrupted the financial system”. Experts say Chinese authorities are also concerned about possible capital flight which could harm the value of the yuan.

However, the authorities in Beijing have not yet attacked Bitcoin mining — the creation of the digital currency.

Between 60 and 70 per cent of new Bitcoins are created in China.

Hyper-wired South Korea was also a hotbed for virtual currencies such as Bitcoin, accounting for some 20 per cent of global transactions, about 10 times its share of the world economy.

But South Korean authorities late last year banned financial institutions from dealing in virtual currencies on fears of a bubble fuelled by retail speculators.

About one million South Koreans, many of them small-time investors, are estimated to own Bitcoins and demand is so high that prices are around 20 per cent higher than in the US. Initial coin offerings (ICOs) — where companies sell newly mined cryptocurrencies to investors for real money — were also outlawed.

The government has also pledged to strengthen investor protection rules, in an effort to curb speculation and potential fraud. Singapore’s central bank has issued a warning over cryptocurrencies, cautioning the public about the risk of jumping in on the “Bitcoin bubble”.

The Monetary Authority of Singapore noted they are not backed by any central bank and are unregulated, which means those who lose their investments have no grounds for redress under Singapore law. — AFP