Thu, Apr 05, 2018 - Page 11 News List

Bitcoin trade should be regulated by money laundering rules, Yang says

Staff writer, with CNA and Bloomberg

Central bank Governor Yang Chin-long (楊金龍) on Monday said that cryptocurrency transactions of bitcoin should be regulated by rules against money laundering.

The Ministry of Justice should include bitcoin transactions in the Money Laundering Control Act (洗錢防制法) given the lack of regulation over the digital currency, Yang said at a meeting of the legislature’s Fiance Committee.

Yang’s comments echoed a statement he made at a news conference on March 22 after the central bank’s quarterly policymaking meeting, in which he urged the government to regulate bitcoins to avoid disrupting the local financial market.

Major central bankers and international financial organizations are against legalization of trading in virtual currencies like bitcoin, Yang said, adding that since 87.5 percent of bitcoin transactions have been owned by only 0.61 percent of the trading accounts in the world, it is easy for the virtual currency to be manipulated.

Yang said local bitcoin investors must pay close attention to possible risks when they trade the digital currency.

With an increasing number of investors chasing the virtual currency, many countries have been watching closely to see whether bitcoin is being used for money laundering, including the US, where a bitcoin trader in Arizona has been found guilty of money laundering by a federal jury.

The US Federal Reserve’s investigation into cryptocurrencies is in its early days and policymakers have not been enthusiastic about the idea of a central-bank issued answer to bitcoin.

New Fed Chairman Jerome Powell last year said that technical issues with the technology remain, and “governance and risk management will be critical.”

The European Central Bank (EBC) has repeatedly warned about the dangers of investing in digital currencies.

ECB President Mario Draghi in February said that the blockchain was “quite promising” and the bank is “very interested” in the technology.

However, Draghi does not consider bitcoin a currency as it is too volatile.

China has made it clear that the central bank has full control over cryptocurrencies.

People’s Bank of China Deputy Governor Fan Yifei (范一飛) at the end of last month said that the bank would regulate virtual currencies next year, but did not give a timetable for the issuance of its own digital currency.

Cash is still king in Japan, said Yuko Kawai, head of the Bank of Japan’s FinTech Center.

However, Japanese authorities might be forced to take after nearly US$500 million in digital tokens were stolen from the Coincheck Inc exchange in Tokyo on Jan. 26.

The Monetary Authority of Singapore (MAS) is closely studying developments and potential risks in the crypto space, but currently sees no strong case to ban trading, Singaporean Deputy Prime Minister and MAS Chairman Tharman Shanmugaratnam said in February in response to questions from lawmakers.

In South Korea, authorities have focused on protecting consumers and preventing cryptocurrencies from being used as a tool of crime.

Bank of Korea Governor Lee Ju-yeol told lawmakers in a parliamentary hearing last month that cryptocurrencies are far from becoming legal tender and regulations to protect consumers and prevent illegal trading are necessary.

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