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Why China Is Cracking Down on Bitcoin | Voice of America

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China has been stepping up efforts in recent weeks to contain the country’s cryptocurrency industry, ban crypto mining operations, and order major banks not to do business with crypto companies.

The final move came on Tuesday when the government cracked down on a company that allegedly provided cryptocurrency-related services. The company’s business registration has been canceled by the authorities and all financial and payment institutions are warned not to offer, directly or indirectly, any virtual currency-related services.

Despite Bitcoin’s promise to be a decentralized cryptocurrency that is everywhere and nowhere, about 65% of the world’s bitcoin mining takes place in China. That’s because a handful of powerful Chinese mining hubs have adopted the world’s largest cryptocurrency by competing against other miners to solve the math puzzles that create more Bitcoin.

The Chinese miners helped increase the value of Bitcoin by more than 1,000 percent in one year, to an all-time high of nearly $ 65,000 in April. After the Chinese miners began shutting down their machines, the value plummeted, closing the first half of the year nearly 50% below its record.

Volatility vs. stability

Bitcoin is the most popular of many new cryptocurrencies that are not backed by precious metals or government loans. Instead, its price only reflects speculation about its future value. As a young currency, it is considered a risky investment with high value volatility. Over the past decade, Bitcoin has suffered four separate losses of at least 50%, which other sectors rarely experience.

While there could be a myriad of factors that prompted China’s crackdown, one thing has been made very clear by the authorities time and again: Bitcoin’s wild price movements are a threat to the country’s economic and financial stability.

The government said cryptocurrencies would disrupt the economic order and “resolutely prevent the transfer of individual risk to broader society,” said the State Council’s Financial Stability and Development Committee, which held a meeting chaired by Vice Prime Minister Liu He, President Xi Jinping’s top officials in economic and financial matters.

China first attempted to prevent its banks from using Bitcoin as a currency in 2013, citing concerns that its inherently speculative nature endangers the country’s financial stability. Over the years the government has become even more cautious. Since May, Beijing has decided to effectively stop all crypto mining operations in the country. In late June, the central bank also urged payment firms and banks to close the accounts of people involved in crypto transactions.

“The Chinese state has fine-grained control over the volatility of the markets for essential goods and assets, I believe,” said Isabella Weber, assistant professor of economics at the University of Massachusetts Amherst.

Weber stated in an interview with VOA that after the bursting of financial bubbles, China not only bailed out interest groups, but that the government is actively trying to prevent the bursting of bubbles from the outset. As a result, the authorities are also very sensitive to the rapid speculative expansions and price increases that have occurred in the Bitcoin sector in recent months.

“Right now, concerns about financial stability in China are growing. In this context, the cryptocurrency crackdown is an attempt to contain a potential source of instability, ”she added.

Ross Darrell Feingold, a political risk attorney and analyst who advises clients doing business in Asia, told VOA that if a government’s political legitimacy does not come from elections, it must come from other sources such as economic success.

“This is all the more true in China, where the party organization, along with other stakeholders such as government agencies, plays an important role in shaping economic policy,” said Feingold.

The right to mint money

Although protecting China’s economic growth is a major concern of Beijing, analysts believe the deeper reason for the government’s sudden crackdown on Bitcoin is that the cryptocurrency is inherently a threat to state monetary sovereignty.

Founded in 2009 by an anonymous programmer named Satoshi Nakamoto, Bitcoin, unlike traditional fiat currencies issued by governments, does not have a central authority that makes policy decisions that affect its value. Many proponents of cryptocurrencies claim that the purely market-driven value of the currency is superior to government-issued currencies that fluctuate with central bank monetary policies.

“Central banks around the world are likely to see cryptocurrencies as a threat to fiat currencies,” said Brendan Ahern, chief investment officer of Krane Shares, a China-focused provider of exchange-traded funds. “It’s outside of their jurisdiction, their jurisdiction. It threatens their ability to operate the levers in the economy, ”he added in a telephone interview with VOA.

From this point of view, the more popular Bitcoin becomes with the citizens of a country, the less power their government has to shape economic policy.

China first stated in 2013 that Bitcoin was “not a currency in the true sense of the word” when the virtual currency began to gain popularity. In its latest move to restrict the use of Bitcoin as a currency, the government further stated that Bitcoin is not a real currency and should not and should not be used as a currency in the market.

This points to the question of who has the right to spend money, said Weber, the author of How China Escaped Shock Therapy.

Weber pointed out that the state’s desire for monetary sovereignty is not only Chinese: “As soon as this private currency becomes something more than a marginal phenomenon, states that are empowered will tend to exercise their monopoly on the right to money to spend. “

In the case of China, however, the issue goes beyond the mere economy, as the government’s political legitimacy depends heavily on the success of the country’s economic growth, said Zennon Kapron, founder of the fintech research and consulting company Kapronasia. “Any challenge to this economic stability and development, or the financial system that supports it, is a similar challenge to the political system,” Kapron told VOA in an email.

Kapron believes crypto is doing little to fuel China’s growth agenda, and may even undermine it by keeping some form of value out of government control. “Then it will be a relatively easy decision for the government and regulators to alienate the likely few million people in China who are involved in crypto instead of endangering the entire economic system.”

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Cryptocurrency

Why Ethereum Could Surpass Bitcoin In The Near Future – Crunchbase News

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By Ahmed Shabana

Even after major cryptocurrencies experienced a threatening collapse from their all-time highs in April, most have soared 200 percent to 300 percent or more from that point in the past year. Bitcoin is making all the headlines, and there are legitimate concerns about its roller coaster nature.

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But what about Ethereum? Ethereum was conceived in 2013 and is an open source platform that helps develop and implement new decentralized applications with the same core concepts as blockchain.

The difference between Ethereum and Bitcoin has caught the attention of large market players like Goldman Sachs, who recently advised investors that Ethereum has a good chance of surpassing Bitcoin’s market cap of $ 660 billion.

The Ethereum network holds more promise because of its real world applications and its ability to store value. Ethereum represents the future of programmable money and smart contracts in ways that older cryptocurrencies like Bitcoin cannot.

Ethereum simplifies worldwide payments

Since the Ethereum network supports the development of new applications in its infrastructure and enables their creation, it is potentially a more valuable resource in the long run. Ether (ETH) will be used to pay for these transactions, as last seen with the booming popularity of NFTs this spring. The result is a much higher usage rate for Ether with far more transactions than Bitcoin in the last 12 months.

Ahmed Shabana from Parkpine Capital

Despite the recent decline in cryptocurrencies, ether rose nearly 1,000 percent in the past 12 months, compared to the 300 percent increase in Bitcoin. Where a Bitcoin is a pure token of value – a currency that is backed by the perceived value of those who own it – Ethereum and the ETH blockchain fuel each other. The recent upgrades to the Ethereum network are helping it to scale much faster and lower transaction costs on the network, which further drives the price of the tokens up.

Instead of having a central instance that monitors how the applications run on the Ethereum network and which transactions are processed, Ethereum-based apps are booming. The most common types of these apps are DeFi. These apps saw 2,000 percent growth in 2020, with more than $ 16 billion in crypto assets stored in their logs by the end of the year.

The future of ETH

Ether started 2020 at $ 125.63 and grew nearly 500 percent to $ 729.65 by the end of the year. It hit $ 4,380 briefly in 2021, but has since hovered between $ 1,700 and $ 2,500, sometimes rising or falling as much as $ 1,000 in a single week.

The big question is where will ETH end in 2021. Many projections are relatively optimistic, with an average price target of between $ 3,500 and $ 4,500 by the end of the year and average long-term projections of $ 11,170 by 2025. However, there are some who see it even faster and more substantial during this time grows.

In a recent Forbes article, a panel of crypto experts including Sagi Bakshi and Lex Sokolin predict that ETH could climb as high as $ 19,842 by 2025 and that by the end of 2022, due to its growing utility in the world, it could increase the The most common cryptocurrency could be the marketplace.

These experts name a number of upgrades that will be made to the network in 2021 that will lower the currently high transaction costs and dramatically increase the benefits. An expert on the panel, Sarah Bergstrand, estimates that ETH could reach US $ 100,000 by 2025.

The biggest upgrade contemplated by investors is EIP-1559, which will overhaul the transaction fee system used by Ethereum. Instead of sending charges to miners who perform tasks on the network, users send the charge to the network itself, which wipes out the charge, reduces the overall supply, and then increases the value of the currency.

The future of cryptocurrency regulation

Ethereum represents a sustainable, function-oriented approach to cryptocurrencies that will support the future of DeFi. But many people stay on the sidelines waiting for government regulations to be implemented.

While longtime cryptocurrency investors lament the idea that regulations limit the freedoms currently available in the market, large investors and corporations see the inevitable implementation of such regulations as a source of stability that could lead to mass adoption.

After several months of chaos, the Biden government is examining how to tackle the markets. A congressional committee has been set up to review digital currencies, the FDIC has asked banks to provide documentation on how they use digital assets, and auditor Michael Hsu is reviewing all current and past guidelines on cryptocurrencies. The chairman of the US Securities and Exchange Commission warns bad actors of impending enforcement and regulation.

Overall, many view these changes as good. When markets are regulated, they become safer for everyday users, and Ethereum can go “normal” with the range of decentralized apps that support and enable it.

Ahmed Shabana is a venture capitalist, startup advisor, investor and entrepreneur. He is Managing Partner of Parkpine Capital, Founder of the Global Ventures Summit, and Creator of The Hungry Company.

Illustration: Li-Anne Dias

Stay up to date with the latest financing rounds, acquisitions and more with the Crunchbase Daily.

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Google’s New Cryptocurrency Ad Policy Goes Into Effect – Featured Bitcoin News

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Internet giant Google’s new advertising policy has come into effect. The company now allows certain cryptocurrency displays, such as: B. those that advertise the exchange of cryptocurrencies and wallets. Advertisers must meet certain requirements and be certified by Google.

Google now allows some crypto ads

Google’s new advertising policy for financial products and services, announced in June, has come into effect. A note on the internet giant’s website:

Starting August 3, advertisers offering US-targeted cryptocurrency exchanges and wallets will be able to advertise these products and services if they meet the following requirements and are certified by Google.

To be certified by Google, advertisers must either be registered with the Financial Crimes Enforcement Network (FinCEN) as a money services company or be a federally or state-recognized bank. They must also meet the relevant legal requirements and their ads and landing pages must comply with Google’s advertising guidelines.

In 2018, Google banned ads related to “cryptocurrencies and related content (including, but not limited to, Initial Coin Offerings)”. [ICOs], Cryptocurrency exchanges, cryptocurrency wallets and cryptocurrency trading advice) ”as well as advertisements for crypto-related“ aggregators and affiliates ”. Google then allowed selected crypto ads in the US and Japan.

Last June, Sydney-based law firm JPB Liberty filed a class action lawsuit against Google, Facebook and Twitter for banning cryptocurrency ads.

While the new policy allows certain crypto ads, Google still doesn’t allow ads for ICOs, defi-trade protocols, and those that “promote the buying, selling, or trading of cryptocurrencies or related products.” In addition, “ad targets that aggregate or compare issuers of cryptocurrencies or related products” are prohibited.

One of the prohibited ad categories is “Celebrity Cryptocurrency Recommendations”. Many scammers have taken advantage of Google and Youtube to promote fraudulent Bitcoin giveaways. Apple co-founder Steve Wozniak sued Google and Youtube last July for promoting Bitcoin advertising fraud using his name and likeness. However, the court ruled in Google’s favor.

What do you think of Google changing its policy to allow ads in cryptocurrency? Let us know in the comment section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation to make an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Can I use cryptocurrency towards my house purchase?

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Cryptocurrency updates

I’ve invested a modest amount in Cryptocurrencies which I would now like to use to buy a house. However, my lender tells me they cannot accept this, and neither does the attorney I was hoping to use. How best to use these funds for this type of purchase?

Daniel Browne, Senior Associate at Kingsley Napley, says sellers currently have very little interest in accepting cryptocurrencies across the UK. If you want to use your crypto investments to buy a house, it usually involves converting them to a government-issued currency such as the pound sterling.

The aversion to cryptocurrencies stems in part from their high-profile association with crime and money laundering. The Proceeds of Crime Act 2002 makes it criminal to deal in any way with assets that a person knows or suspects to be the proceeds of crime. This applies to the owners of the assets and their professional advisers who are involved in the transaction.

However, while some lenders are reluctant to loan out some or all of the deposit from the crypto proceeds, some are now ready to do so (including Nationwide, Halifax, and Barclays). Look for a crypto-friendly lender as early as possible in the home buying process.

The challenge is to find a carrier who is willing to transfer the crypto proceeds to their customer account. There are not many.

Daniel Browne, Senior Associate at Kingsley Napley © Petteri Kokkonen

Money laundering regulations require transport companies to take steps to determine who their customer is and verify that the funds they receive from a customer are not the proceeds of crime. This means understanding the origin of the crypto assets, including how they were traded and with whom.

This typically involves the instruction of an expert who is able to conduct a full audit of the crypto proceeds used. This check can then form the basis on which the carrier can make a judgment as to whether the planned transaction can be carried out safely.

Can I apply for a death grant even though we were not married?

My partner recently passed away. We have two children under the age of 18 but we were not married. Can I receive a widow’s pension or some other type of death benefit?

Jo Edwards, Partner and Head of Family Law at Forsters, Says the UK’s main financial support to families after the death of a parent or partner is the Bereavement Support Payment (BSP). This replaced a number of benefits in 2017, including widow’s benefit (WPA), death benefit / widow’s pension and death benefit.

Jo Edwards, partner at Forsters © jameseppyphotography

Currently, BSP is limited to those who were married to the deceased or were in a civil partnership at the time of death. So I’m sorry to inform you that you are currently not eligible for BSP.

That will rightly change soon after the government suffers a string of court defeats for treating unmarried couples and their spouses differently when death ends their relationship. It has become increasingly difficult to justify this discrimination, especially since unmarried couples are the fastest growing family type in the UK.

Four years ago, Siobhan McLaughlin, who was not eligible for funeral money because she was not married to the father of her children when he died, brought this inequality to the highest court.

In August 2018, the Supreme Court found that the narrow eligibility rules for the old EPA violated human rights. She justified this by stating that the benefit is based on the obligations of the deceased and the surviving dependents towards their children, which are the same regardless of whether they are married or not, and that children should not suffer this disadvantage because their parents have decided not to marry.

This was followed by another court ruling in 2020, which found that the same eligibility requirements for the new benefit – GNP – are also incompatible, as children are discriminated against due to the legal status of their parents’ relationship.

After some delay, last month the government announced its intention to extend EPA and GNP entitlements to surviving unmarried partners with financially dependent children. The government intends to have the extended eligibility requirements apply retrospectively until August 30, 2018, with some applicants being eligible for retrospective payments.

As such, you may soon be entitled to GNP, provided you were living together at the time of your partner’s death and the other requirements are met. The changes apply to the whole of the UK.

GNP is paid in one of two installments, with an initial payment of £ 3,500 followed by 18 monthly payments of £ 350 for those eligible for child benefit or who were pregnant when their partner died, or £ 2,500 and then £ 100 per month in other cases (for those who do not receive child benefit). From the day of death, strict application deadlines apply, which can affect the amount received. In your case, you have 12 months from the date the new rules come into effect to receive the full amount.

The rules for WPA are different, but they don’t apply to your case. It is worth researching whether you are entitled to any death benefits that your partner may have accumulated (which are usually not limited to surviving spouses and domestic partners, but check the relevant policy) and whether you are entitled to any such benefits as part of their pension.

The opinions in this column are for general informational purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect consequences, including any loss, arising out of reliance on any response and disclaim all liability.

Do you have a financial dilemma for FT Money’s professional team of experts to investigate? Email your problem in confidence to money@ft.com.

Our next question

My wife and I have been married for 40 years. We are not separated and we do not want to either, but for family reasons she moved back to her home country Norway in 1995, where she now lives as my non-resident wife. We have agreed that after my death you will inherit all of my property and that she will divide it equally, one third each, between you and our two children.

I thought she was going to inherit my estate tax free but was told that it is not as she has not lived with me in the UK for 26 years. Does this mean you will only be given the £ 325,000 allowance and my children before paying 40 percent of Inheritance Tax (IHT) on the balance?

This seems unfair as we consider ourselves to be just as married as any other married couple. What advice can you give us to avoid or limit excessive IHT?

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