Central Banks & The G20. More Crypto Volatility in 2018
The nasty correction of the past days has catapulted Bitcoin & friends to the front pages of the mainstream media. Sure, it is not the first time but this time it is a “Crash”. “Bursting of the bubble”. “We told you so”. In other words, bad news and bad news sells!
What is the reason? It seems that nobody really knows. Various “insiders” point the fingers in different directions:
South Korea considers shutting down domestic cryptocurrency exchanges
PBoC Official Calls for Wider Ban on Chinese Crypto Trading
Bitconnect – The implosion of the Crypto Ponzi scheme
I personally do not believe, that any of the above is the main reason for “Investors” hitting the exit. It has become clear over the past few months that the Crypto Market is getting isolated and cut off from the “real” financial world.
As tech companies tussle with the U.S. government, banks take on bigger role helping authorities catch criminals.
In the name of KYC, AML and Suspicious Activity Reporting, banks have blocked the road back into the real world – the fiat world, where we pay taxes, pay our bills, buy grocery, go for dinners and pay for a vacation. This path has been slowly shut down.
It has been going on for months and reported on the sidelines,
and has been spelled out by US Treasury Secretary Mnuchin on January 12th.
Mnuchin Warns Against Bitcoin Becoming the Next ‘Swiss Bank Account (listen to him very very closely in this video)
“Under U.S. law, if you have a wallet to own bitcoins, that company has the same obligation as a bank to know” you as a customer, Mnuchin said. “We can track those activities. The rest of the world doesn’t have that, so one of the things we will be working very closely with the G-20 is making sure that this doesn’t become the Swiss bank account.”
What happened to the Swiss bank accounts? You can read this book to understand the power of the US Government and its Agencies.
The US is not the first and will not be the last country, calling for close G20 Cooperation. Already in 2017, the European members have called for such action. Japanese Finance Minister Taro Aso said, “We need to consider and examine this and see how (…) with all the other G20 members we can regulate bitcoin”.
So there you have it. The G-20 Finance Ministers and the Heads of State will meet this year on the following dates. Put these dates in BIG RED on your agenda:
March 19-20: Finance ministers and central bank governors, Buenos Aires
April 20: Finance ministers and central bank governors, Washington DC, USA
July 21-22: Finance ministers and central bank governors, Buenos Aires
Leaders Summit on 30 November and 1 December, which will close with a joint declaration of the G20 heads of state and government.
What does that all mean? More volatility, more pain but at The End, it will be the acceptance of Crypto.
Overall, the Genie is out of the Bottle and will not be stopped but certainly “softly regulated”.
Good news for most, bad news for all Hard Core Crypto Fans, whose dreams of a world away from control, banks and regulations will end by 2018.