Tag: cryptocurrency news

Cryptocurrency exchange Coinstore enters India despite pending curbs on trade, BFSI News, ET BFSI

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By Nupur Anand

MUMBAI – Singapore-based virtual currency exchange Coinstore has begun operations in India at a time when the Indian government is preparing legislation to effectively bar most private cryptocurrencies.

Coinstore has launched its web and app platform and plans branches in Bangalore, New Delhi and Mumbai which will act as its base in India for future expansion, its management said.

“With nearly a quarter of our total active users coming from India, it made sense for us to expand into the market,” Charles Tan, head of marketing at Coinstore told Reuters.

Asked why Coinstore was launching India despite the pending clampdown on cryptocurrencies, Tan said: “There have been policy flip-flops but we hope things are going to be positive and we are optimistic that the Indian government will come out with a healthy framework for cryptocurrencies.”

The New Delhi government is planning to discourage trading in cryptocurrencies by imposing hefty capital gains and other taxes, two sources told Reuters earlier this month.

It has said that it will allow only certain cryptocurrencies to promote the underlying technology and its uses, according to a legislative agenda for the winter session that is set to start later this month.

Tan said Coinstore plans to recruit about 100 employees in India and spend $20 million for marketing, hiring and development of crypto-related products and services for the Indian market.

Coinstore is the second global exchange to enter India in recent months, following in the footsteps of CrossTower which launched its local unit in September.

The price of the world’s biggest cryptocurrency, Bitcoin, has more than doubled since the start of this year, attracting hordes of Indian investors.

Industry estimates suggest there are 15 million to 20 million crypto investors in India, with total crypto holdings of around 400 billion rupees ($5.33 billion).

Coinstore also plans to expand into Japan, Korea, Indonesian and Vietnam, according to Tan.

($1 = 75.0400 Indian rupees)

(Reporting by Nupur Anand; Editng by Mark Heinrich)



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Banning cryptocurrencies could lead to more unlawful usage, says BACC, BFSI News, ET BFSI

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A blanket ban on cryptocurrencies will encourage usage by non-state players, which will further increase unlawful usage, said Blockchain and Crypto Assets Council (BACC), part of the Internet and Mobile Association of India (IAMAI), in a statement on Thursday.

This statement comes days after the government listed the Cryptocurrency Bill in the Parliament for introduction. The Bill urges ban on all private cryptocurrencies, with some exceptions.

There would be several negative outcomes of a ban such as zero accountability and traceability of the origin and end usage of the cryptocurrencies; besides a complete evasion of taxes, IAMAI said.

A ban will also adversely impact retail investors, it added.

BACC has always been in favour of prohibiting the usage of private cryptocurrencies as a currency in India by law since usage as currency is likely to interfere with monetary policy and fiscal controls, it said. However, BACC has also advocated their use only as an asset.

The Council believes that ‘smartly regulated crypto assets business’ will protect investors, help monitor Indian buyers and sellers, lead to better taxation of the industry, and limit illegal usage of cryptos.

The Blockchain and Crypto Assets Council (BACC) represents crypto exchanges based in India and includes companies like CoinDCX, WazirX, and Coinswitch Kuber.

The Council believes that the efforts of the exchanges should be supported by law, which should enable them to provide safer services to investors and fair taxes to the government.



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El Salvador to build cryptocurrency-fueled “Bitcoin City”, BFSI News, ET BFSI

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LA LIBERTAD, El Salvador – In a rock concert-like atmosphere, El Salvador President Nayib Bukele announced that his government will build an oceanside “Bitcoin City” at the base of a volcano.

Bukele used a gathering of Bitcoin enthusiasts Saturday night to launch his latest idea, much as he used a an earlier Bitcoin conference in Miami to announce in a video message that El Salvador would be the first country to make the cryptocurrency legal tender,

A bond offering would happen in 2022 entirely in Bitcoin, Bukele said, wearing his signature backwards baseball cap. And 60 days after financing was ready, construction would begin.

The city will be built near the Conchagua volcano to take advantage of geothermal energy to power both the city and Bitcoin mining – the energy-intensive solving of complex mathematical calculations day and night to verify currency transactions.

The government is already running a pilot Bitcoin mining venture at another geothermal power plant beside the Tecapa volcano.

The oceanside Conchagua volcano sits in southeastern El Salvador on the Gulf of Fonseca.

The government will provide land and infrastructure and work to attract investors.

The only tax collected there will be the value-added tax, half of which will be used to pay the municipal bonds and the rest for municipal infrastructure and maintenance. Bukele said there would be no property, income or municipal taxes and the city would have zero carbon dioxide emissions.

The city would be built with attracting foreign investment in mind. There would be residential areas, malls, restaurants and a port, Bukele said. The president talked of digital education, technology and sustainable public transportation.

“Invest here and earn all the money you want,” Bukele told the cheering crowd in English at the closing of the Latin American Bitcoin and Blockchain Conference being held in El Salvador.

Bitcoin has been legal tender alongside the U.S. dollar since Sept. 7.

The government is backing Bitcoin with a $150 million fund. To incentivize Salvadorans to use it, the government offered $30 worth of credit to those using its digital wallet.

Critics have warned that the currency’s lack of transparency could attract increased criminal activity to the country and that the digital currency’s wild swings in value would pose a risk to those holding it.

Bitcoin was originally created to operate outside government controlled financial systems and Bukele says it will help attract foreign investment to El Salvador and make it cheaper for Salvadorans living abroad to send money home to their families.

Concern among the Salvadoran opposition and outside observers has grown this year as Bukele has moved to consolidate power.

Voters gave the highly popular president’s party control of the congress earlier this year. The new lawmakers immediately replaced the members of the constitutional chamber of the Supreme Court and the attorney general, leaving Bukele’s party firmly in control of the other branches of government.

The U.S. government in response said it would shift its aid away from government agencies to civil society organizations. This month, Bukele sent a proposal to congress that would require organizations receiving foreign funding to register as foreign agents.



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Millennials on the fence about cryptocurrency. Is the risk worth it? Here’s what they think, BFSI News, ET BFSI

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– Anushka Sengupta

Swapnil Ganguly, a 24-year-old software development engineer at Amazon, said he will not invest in cryptocurrency.

“I would rather invest in the share market. No action can be taken as well because cryptocurrency is not regulated in India. It’s too risky,” Ganguly said.

Swapnil Ganguly

Contrary to popular belief of millennials having a larger risk appetite, ETBFSI has found that they seek security in their investments.

“My friend was recently scammed by a crypto trader. These people steal our money by giving false crypto tokens at a cheaper rate. You realise they are fake only when you sell those tokens for cash,” Ganguly said, soured by the incident.

This holds true even for the risk-takers. These millennials also want cryptocurrency to be regulated, and expect it to be one of the most-opted investment options.

Shreyashi Haldar
Shreyashi Haldar

“I think all investments carry some risks, crypto leading the list, but we have a larger risk appetite. I have also invested in cryptocurrency, but I would prefer it if the government regulates it, so that the privacy concerns are addressed. With talks of a central bank digital currency, I feel crypto can become very significant,” said Shreyashi Haldar, a final year MBA student at NIBM Pune.

Apart from security, some also expressed concerns about the affordability of crypto tokens. Some risk-taker millennials, who want to invest in cryptocurrency, said that they fall short of funds to invest in the secure ones, like Bitcoin, which use the proof of work or proof of stake validation techniques.

Shiba Inu
Shiba Inu

“Popular and secure cryptos like Bitcoin, Shiba Inu, Dogecoin, Ethereum, etc come with less risk at a very high price. Those who are looking for short term investments like me can’t afford these. I invested in XRP through Ripple, which is a cheaper option, but I did not gain much out of it,” said Mahesh Vishnoi, a customer associate at Tech Mahindra.

Cheaper cryptocurrencies do not use such systems, leading to the possibility of theft and fraudulent transactions.

Cryptocurrency is not regulated in India yet. As recently as Wednesday, Shaktikanta Das, governor of Reserve Bank of India, reiterated the risks of cryptocurrency, and said that the numbers, in terms of adoption rate and investments, were exaggerated. The government is also expected to table a Bill on cryptocurrency in the Winter Session of the Parliament, starting Nov 29.

For more stories on cryptocurrency, click here.



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Crypto coin riding Squid Game high craters after dizzying rally, BFSI News, ET BFSI

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– A cryptocurrency named after the wildly popular Netflix drama “Squid Game” crashed to almost zero value on Tuesday after a dizzying rally pushed it to almost $2,800 last week.

The so-called squid token‘s market value jumped to $2.4 billion at the peak of Monday’s trading with a trading volume of $14 million over the last 24 hours, according to CoinMarketCap. The reason for squid’s slump was unclear. However, several reports including one by Gizmodo said holders of the coin were not allowed to sell the digital coin. Reuters could not independently verify the information.

Specialist crypto news outlet Coindesk reported that a digital address dumped squid tokens and cashed out millions of dollars worth of tokens in what it termed a “rug pull”- a situation where crypto developers abandon a project and run away with investors’ money.

Squid’s website appeared to be offline on Tuesday, while its Twitter account was “temporarily restricted” due to unusual activity.

Squid has only traded for a week, according to CoinMarketCap.

“Like many internet scams, cryptocurrency scams align themselves closely to popular trends and after the hype of Squid Game, this is no different,” said Jake Moore, cybersecurity specialist at cybersecurity firm ESET.

Cryptocurrencies based on memes or linked to internet culture have recorded rapid booms and busts this year, echoing soaring popularity of mainstream cryptocurrencies such as bitcoin.

Last week, for instance, shiba inu cryptocurrency – a meme-inspired cryptocurrency and a spinoff of dogecoin – muscled into the top-10 largest digital tokens by market capitalization. It has, however, barely any practical use.

South Korean series Squid Game, which became a global sensation and the No.1 program on Netflix, shows hundreds of cash-strapped players competing in hyperviolent games.

Squid is traded on exchanges PancakeSwap and DODO.

Pancakeswap did not respond to a request for comment. (Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru and Tom Wilson in London; Editing by Bernard Orr and Shinjini Ganguli)



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Shiba Inu passes Dogecoin as top “dog” in cryptocurrency, BFSI News, ET BFSI

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SILVER SPRING, Md. – Cryptocurrency has officially gone to the dogs.

The recent trading frenzy over a digital token called Shiba Inu – commonly billed as a “meme” or joke coin – has vaulted the canine-themed cryptocurrency into the top ten most valuable digital assets by market value, hitting $40 billion and surpassing its cousin and apparent inspiration, Dogecoin.

Shiba was up another 10% at midday on Monday and has doubled in value in the past week. Most of that gain came in a flurry of trading last Wednesday, when it gained a whopping 66%.

Even with its recent meteoric rise – it’s up about 900% in the past month – each Shiba coin costs just a tiny fraction of one cent. If you bought $1,000 worth of Shiba in late September, your 20 million coins would now be worth around $9,000.

Like most cryptocurrencies, Shiba is not commonly used for commercial transactions and is considered by most experts and investors to be a high-risk, speculative bet due to the broader volatility of the crypto market. Experts warn that investors need to be cautious about putting money into something with anonymous leadership that appears to have little functional use.

Lee Reiners, an outspoken crypto skeptic, teaches fintech and cryptocurrency courses at Duke University School of Law. Reiners said he’s not surprised by Shiba’s recent spike.

“This is what happens when you have massive speculation in assets with no intrinsic value,” Reiners said.

Investors might be thinking this story sounds familiar. Bitcoin has doubled in value twice this year – with a rapid plunge in between – and now sells for more than $60,000 per coin. Among stocks, GameStop had a surge that rivals Shiba’s, rocketing from about $17 per share in early January to $483 later that month. Lately, it’s consistently traded around $180.

While Shiba is the current white-hot cryptocurrency, you can’t trade it through more traditional brokers – yet. A petition with more than 450,000 signatures on Change.org is pushing for the mobile trading app Robinhood to start allowing Shiba trades. Robinhood currently allows trading of Dogecoin and other cryptocurrencies. Its CEO Vladimir Tenev told investors last week that the company would “carefully evaluate whether we can add new coins in a way that’s safe for customers and in line with regulatory requirements.”

Stronger regulation of the crypto markets seems inevitable, but it’s unclear when it might happen. The chair of the U.S. Securities and Exchange Commission, Gary Gensler, said in August that the world of crypto doesn’t have enough investor protection and compared it to “the Wild West.”

Whether that lack of regulation is driving the recent spikes in Shiba and other digital assets is not clear. What seems apparent though, is that retail investors – the little guys – are leading the way.

Kyle Waters, a research analyst at the blockchain data and analytics firm Coin Metrics, said the median trade size of Shiba on that busy Wednesday was $115. That’s “highly suggestive” that the typical Shiba trader on Coinbase is a small retail trader, Water said.

Shiba’s rise is similar to Dogecoin’s ascent in the spring, when it caught fire and rose jumped from around 5 cents to 57 cents between April 7 and May 7.

Like many other crypto currencies, Shiba is shrouded in mystery. According to its white paper – or “Woof Paper,” in this case – the token was started in 2020 by an anonymous person or group named “Ryoshi.” The paper, which describes how Shiba and its progeny works, is also peppered with soaring-but-vague platitudes about community, freedom, revolution and destroying traditional paradigms.

A person with limited background knowledge of technology and blockchain vernacular would be hard pressed to decipher much of the technical wording in the white paper.



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Cryptocurrency crash ‘plausible’, rules needed, Bank of England’s Cunliffe says, BFSI News, ET BFSI

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By Huw Jones

LONDON -A collapse in cryptocurrencies is a “plausible scenario” and rules are needed to regulate the fast-growing sector as a “matter of urgency”, Bank of England Deputy Governor Jon Cunliffe said on Wednesday.

Risks to financial stability from the application of crypto technologies are currently limited, but there are a number of “very good reasons” to think that this might not be the case for very much longer, Cunliffe said.

“Regulators internationally and in many jurisdictions have begun the work. It needs to be pursued as a matter of urgency,” Cunliffe said in a speech to the SIBOS conference.

Largely unregulated cryptoassets have grown by 200% so far this year, from just under $800 billion to $2.3 trillion, with 95% of them, including bitcoin, unbacked by any asset or fiat currency, Cunliffe said.

“But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at around $1.2 trillion in 2008,” Cunliffe said, referring to a corner of the U.S. mortgage market whose collapse led to a global banking crisis.

“Such a collapse is certainly a plausible scenario, given the lack of intrinsic value and consequent price volatility, the probability of contagion between cryptoassets, the cyber and operational vulnerabilities, and of course, the power of herd behaviour,” Cunliffe said.

Connections between cryptocurrencies and the traditional financial system are also growing as big investors, hedge funds and banks become more involved, Cunliffe said.

Unregulated, decentralised finance or DeFi, which delivers financial services like credit on the technology that underpins cryptocurrencies, presents “pronounced” challenges given the absence of investor protection and the BoE has begun work on how such risks can be managed, he added.

Last week, global regulators proposed that the safeguards they apply to systemic clearing houses and payment systems should also be applied to stablecoins, a type of cryptocurrency typically backed by an asset or fiat currency, but they only make up 5% of cryptoassets.

Cunliffe, who helped to lead the work on the safeguards, said it took two years to draft this measure, during which stablecoins have grown 16-fold.

“Indeed, bringing the crypto world effectively within the regulatory perimeter will help ensure that the potentially very large benefits of the application of this technology to finance can flourish in a sustainable way,” he added.

(Reporting by Huw JonesEditing by David Goodman, Gareth Jones and Nick Macfie)



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Cryptocurrencies rebound 10-fold since last yr, despite tough steps from China, India, BFSI News, ET BFSI

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Cryptocurrencies have rebounded with a total market value of $2.2 trillion in late September, despite tough restrictions imposed by countries like China and India, according to report by DBS Group Research.

This is a ten-fold increase since the beginning of last year. The launch of several digital asset exchanges, rollout of innovative wallets, changes in mining technology and wide issuance of stablecoins have kept the momentum strong for crypto, the report said.

Also read: China announces cryptocurrency bank – what does it mean for India?

Countries like India and China are keeping a close eye on crypto assets, as the scale and scope of this asset class are large enough to have systemic implications, it said.

Multiple reasons for the ban have been cited by the governments, such as security and governance, consumer protection, surveillance gap and monetary policy efficacy.

Also read: What are stablecoins, and how stable are they?

China’s central bank, in the last week of September, declared all transactions involving Bitcoin and other virtual currencies illegal, stepping up a campaign to block use of unofficial digital money. This was the second time the government announced a ban on crypto.

In March, it was reported that India would propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets. This, again, is not the first time when India is declaring its inhibition towards adopting crypto.

The resilience of crypto assets after the ban suggests that the market impact of China’s opposition to crypto could be declining. Year-to-date, Ether is outperforming Bitcoin by 400% in price return terms.

The ban has also led miners to migrate their businesses to crypto-friendly locations, which can offer cheap, reliable and greener sources of electricity, the report said.

Kazakhstan, US and Russia are some of the preferred locations.

According to experts, China’s ban was likely because the government wants to remove competition for its digital yuan. Adding to this, India’s Reserve Bank of India has also said that it was eyeing a phased implementation of its central bank digital currency (CBDC).

Also read: RBI eyes phased implementation of CBDC, will work in unison with payment infra, says RBI’s Ranjan

CBDC adoption will help drive future usefulness, acceptance by merchants and improve cross-border payments, according to banking regulators.

However, there is still a lot of time for countries to roll out their CBDCs. To maintain stability, CBDCs would need to have a careful design and implementation, the report said.



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Stablecoins to face same safeguards as traditional payments, BFSI News, ET BFSI

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By Huw Jones

LONDON – Stablecoins would have to comply with the same safeguards as their more traditional competitors in payments under proposals from regulators on Wednesday as authorities get to grips with a rapidly evolving sector.

Stablecoins are cryptocurrencies designed to have a stable value relative to traditional currencies, or to a commodity such as gold, to avoid the volatility that makes bitcoin and other digital tokens impractical for most commerce.

Facebook Inc’s move in 2019 to introduce its own stablecoin Diem, then known as Libra, raised concerns among governments and central banks that a major payments competitor could emerge overnight with little regulation.

Since then, Diem has radically scaled back its ambitions and plans to launch a U.S. dollar stablecoin.

The IOSCO group of securities regulators and the Bank for International Settlements, a global forum for central banks, set out on Wednesday how current rules for major clearing, settlement and payments services should also be applied to ‘systemic’ or heavily used stablecoins.

The proposals, put out to public consultation before being finalised early next year, put into practice what regulators have long called for: the same rules for the same type of business and accompanying risks.

The rules mean a stablecoin operator must set up a legal entity which spells out how it is governed and manages operational risks like cyber attacks.

Though still little-used for commerce, the use of stablecoins in crypto trading has grown rapidly as retail and larger investors warmed to the emerging asset class during the COVID-19 pandemic.

Tether, the largest stablecoin, has a market capitalisation of around $68 billion versus just $15 billion a year ago. The value of circulating USD Coin, another major stablecoin, has also jumped dramatically to over $30 billion from just $2.7 billion a year ago, according to CoinMarketCap.

Countries that allow stablecoins to operate would be required to apply the principles as part of their affiliation to IOSCO and the BIS.

“This report marks significant progress in understanding the implications of stablecoin arrangements for the financial system and providing clear and practical guidance on the standards they need to meet to maintain its integrity,” IOSCO Chair Ashley Alder said in a statement.

The proposals do not cover issues specific to stablecoins pegged to a basket of fiat currencies, which are being considered separately.

(Additional reporting by Tom Wilson, editing by Giles Elgood)



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Cryptocurrencies post inflows for 7 straight weeks, led by bitcoin

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By Gertrude Chavez-Dreyfuss

NEW YORK – Cryptocurrency investment products and funds recorded inflows for a seventh straight week, as institutional investors warmed to more supportive statements from regulators, data from digital asset manager CoinShares showed on Monday.

Inflows to the sector were $90.2 million last week, led by bitcoin which snagged $69 million, according to CoinShares data as of Oct. 1. Over the past seven weeks, crypto inflows reached $390 million. For 2021, inflows totaled $6.1 billion.

Bitcoin recorded its third straight week of inflows.

“We believe this decisive turnaround in sentiment is due to growing confidence in the asset class amongst investors and more accommodative statements from the U.S. Securities Exchange Commission and the Federal Reserve,” wrote James Butterfill, investment strategist, at CoinShares.

SEC Chairman Gary Gensler last week at a Financial Times conference reiterated his support for bitcoin exchange traded funds that would invest in futures contracts instead of the digital currency itself.

A day later, Fed Chair Jerome Powell, in remarks before Congress, said the Fed had no intention of banning cryptocurrencies.

Bitcoin on Monday hit a four-week high of just under $50,000 and was last up 2.3% at $49,333.

Blockchain data provider Glassnode, in its latest research note on Monday, pointed out that as bitcoin rallied out of its narrow trading range last week, approximately 10.3% of the circulating supply returned to an unrealized profit.

Ethereum products and funds, meanwhile, posted another week of inflows totalling $20 million, despite conceding market share to bitcoin in recent weeks. Inflows to ether, the token for the Ethereum blockchain, so far this year amount to $1 billion.

Ether was last down 0.4% at $3,403.

Still, despite consecutive weekly inflows across crypto products, volumes were low at $2.4 billion last week, CoinShares data showed, compared to $8.4 billion in May 2021.

Assets under management at Grayscale and Coinshares, the two largest digital asset managers, climbed last week to $41.1 billion and $4.6 billion, respectively.

(Reporting by Gertrude Chavez-Dreyfuss; editing by Richard Pullin)



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