by Jeff Berwick, The Dollar Vigilante:
As we’ve said here many times, bitcoin is not a revolution in money and banking. A revolution means returning to where you came from. Instead, bitcoin is an evolution in money and banking.
It changes the game so massively that the entire financial, monetary and political systems have no idea how to deal with it. For this reason, nearly every country in the world has a different “policy” when it comes to bitcoin.
What should their policies be? Well, they shouldn’t have any policies on bitcoin at all. In fact, government don’t even exist…they are nothing but immoral, illegitimate, superstitions. Yet, people still continue to pay their extortion fees (taxes) and bow to illegitimate authority by lining up in curtained closets every few years to tick a box to legitimize the state. Such a shame.
Every county has a different view on how to deal with bitcoin which is the currency that could end all central banking, wars and big government if not stopped.
It’s like the bankers are all grasping in the dark trying to figure out how to stop the one thing that can destroy them.
In the last week, we’ve seen two totally different approaches in China and Japan.
No country has gravitated towards bitcoin more than China.
While China is now more capitalist in many ways than the US and has had a subsequent boom in wealth, they still have heavy capital controls. Chinese people, unless they pay off their local government officials under-the-table, can only take a certain amount of money outside of the country each year. Capital flight was estimated at $700 billion in 2016.
Because of this, the Chinese have moved into bitcoin en masse and view it as a currency without borders that cannot be controlled.
The Chinese central bank, the PBC, has been trying to slow down the bitcoin trade as much as possible. Unfortunately for them, many bitcoin users don’t care what the government says. And even as China has tried to shut down bitcoin exchanges, they just keep operating.
On February 9th, OKCoin, one of China’s largest exchanges, announced a suspension of bitcoin and litecoin withdrawals. The announcement indicated that the People’s Bank of China (PBC) has requested the exchange deal with “Anti Money Laundering” (AML) issues.
Of course, money laundering is not a real crime… it is an attempt to avoid extortion (taxes)…but that is the purported reason for the suspension.
The Chinese exchanges will spend the next 30 days updating their systems, after which bitcoin and litecoin withdrawals will, supposedly, be permitted. We wouldn’t be so sure of that, however.
Here is the status of the major bitcoin exchanges in China.
The Bitcoin Price index dropped nearly four percent on Wednesday and the PBC crackdown will have a major impact outside of China as well. That’s because China’s bitcoin trading platforms – China, Okcoin and Huobi – managed over 90 percent of bitcoin global trade.
Meanwhile, in Japan, recent events with bitcoin would seem to indicate almost the opposite governmental reaction. Japan has a new law that will make bitcoins usable, for some, as legal tender. Companies hoping to deal in the new currency must submit to a long list of regulations to ensure that the ‘coins’ are not being used for “criminal activity”.
Companies must have $100,000 in reserve currency to use bitcoin. Additionally, they must pay around $300,000 just to begin with. They must also tell the government about their activities on a regular basis and submit to regular external audits by the Japanese National Tax Agency
After doing all this, there still is no guarantee they will receive a license, even if they abide by government edicts. Plus, only the large corporations can afford to adhere to the requirements. That’s often the way it is with regulatory authority.
In fact, many are comparing the Japanese regulation with the fascist New York State bitcoin licenses that all but make it impossible for almost any company to comply.