| Is Bitcoin Legal? Illegal? a Currency? a Commodity? Posted: 08 Mar 2014 12:01 PM PST Regulators in various countries are grappling with bitcoin. What the hell is it? It's a good question and answers vary widely. Bloomberg reports Japan Says Bitcoin Not Currency Amid Calls for Regulation. Japan's government said Bitcoin isn't a currency amid calls for its regulation a week after the bankruptcy of Mt. Gox, the Tokyo-based exchange that was once the world's biggest.
There is no law to define Bitcoin and relevant ministries are gathering information on it, Prime Minister Shinzo Abe's cabinet said in a statement in response to questions from an opposition party lawmaker. Bitcoin transactions can be taxed, according to the statement obtained by Bloomberg News.
Japan isn't the only country grappling with the regulation of Bitcoin amid reports of hacking into exchanges including Mt. Gox and concern that the virtual currency can be used for money laundering. In the U.S., states are wrestling with how digital-currency businesses could be regulated as money transmitters, while Russia has said Bitcoin is illegal under current law and Finland plans to treat it as a commodity.
The Japanese banking law doesn't allow lenders to broker Bitcoin transactions or set up accounts for customers to store the digital assets, according to the statement. At the same time, current rules don't prevent brokerages and asset managers from managing clients' Bitcoins, it said.
"Japan's government is falling behind the curve as Bitcoin grew rapidly over the past five years," said Weizhou Yang, an analyst at Mizuho Securities Co. in Tokyo. "Banks shouldn't take risks to dabble in Bitcoin business. On the other hand, getting Bitcoin into funds may broaden the investment product base."
DPJ's Okubo
Democratic Party of Japan lawmaker Tsutomu Okubo, a former vice finance minister, called on the government to rectify the lack of regulation last week. Officials from the Finance Ministry, Financial Services Agency and Bank of Japan have said they're not in a position to oversee Bitcoin.
"The authorities' stance that they don't have responsibility is disgraceful," Okubo, who also used to work at Morgan Stanley, said in a telephone interview on Feb. 26. "We need to establish a legal system."
Finance Minister Taro Aso said today that the government hasn't decided whether to regulate Bitcoin. Earlier this week Aso, who also oversees the banking regulator, said it wasn't clear yet whether Mt. Gox's failure was a crime.
Singapore's finance minister said last month that the central bank didn't recognize Bitcoin as legal tender. China has stopped financial institutions from dealing in it, even as trading continues. Danish regulators are drafting a proposal for lawmakers in an effort to protect consumers and businesses from losses. The answer to my question is yes, no, don't know, and it depends (dependent on what country you are in). Newsweek Unmasks Bitcoin InventorTwo day ago, Newsweek unmasked Satoshi Nakamoto, The Face Behind Bitcoin. It's a fascinating article, and one well worth a look. Here's a paragraph that caught my attention. Andresen, a Silicon Valley refugee in Amherst, Mass., says he worked closely with the person "or entity" known as Satoshi Nakamoto on the development of Bitcoin from June 2010 to April 2011. This was before the rise of today's multibillion-dollar Bitcoin economy, boosted last year by the unexpected, if cautious, endorsement of outgoing Federal Reserve chair Ben Bernanke, who said virtual currencies "may hold long-term promise."
Since then, Bitcoin ATMs have been cropping up across North America (with some of the first in Vancouver, British Columbia; Boston; and Albuquerque, N.M.) while the acceptance of Bitcoin has spread to businesses as diverse as Tesla, OkCupid, Reddit, Overstock.com and Virgin Galactic, Richard Branson's aviation company, which has said it will blast people into space if they cough up enough Bitcoin. Denial, Bizarre Media Road Chase The Guardian reports Satoshi Nakamoto: man denies being bitcoin inventor amid media frenzy. Dorian S Nakamoto, the Japanese-American man named as bitcoin inventor Satoshi Nakamoto, has denied any link to the digital currency amid a farcical media chase through Los Angeles.
Nakamoto, 64, disputed a Newsweek cover story that on Thursday unmasked him as the "father of bitcoin". His denial cast doubt on a putative scoop the magazine used to relaunch its print edition.
Nakamoto made the denial in an interview with the Associated Press after a day of near-slapstick scenes in which dozens of journalists pursued him and an AP reporter through the city, provoking a social media storm. "I got nothing to do with it," he said.
A media posse continued seeking Nakamoto on Thursday night after he left the AP office in downtown LA where he and the reporter had sought refuge earlier in the day.
The Newsweek story, written by Leah McGrath Goodman, named him as "the mystery man behind the crypto-currency" which exploded in popularity in 2013 and supposedly made its founder worth $400m.
Satoshi Nakamoto, a name attributed to the currency's founder, was widely deemed a pseudonym for an elusive, genius hacker. Numerous media organisations tried and failed to find him.
Newsweek, a venerable but struggling brand that had dropped its print edition in 2012, returned to newsstands this week trumpeting its 4,500-word story under the headline "Bitcoin's Face".
Within hours of publication dozens of journalists camped outside Nakamoto's door, ringing the bell with no response, until their silver-haired, bespectacled quarry, dressed in a grey sports coat and striped shirt, emerged and said he wanted someone who spoke Japanese and would buy him lunch.
"I'm not involved in bitcoin. Wait a minute, I want my free lunch first. I'm going with this guy," Nakamoto said, pointing at an AP reporter. "I'm not in bitcoin, I don't know anything about it."
Cameras followed as the pair headed in a Prius to a sushi restaurant. When reporters intruded they left and drove downtown, the pursuers tweeting all the way and making comparisons to the OJ Simpson highway chase in 1994.
The pair took refuge in the news agency's downtown headquarters, leaving a media mob outside. In AP's report, published late on Thursday, the alleged currency mastermind said his English was imperfect and that the Newsweek reporter misinterpreted him when he said was "no longer involved in that".
"I'm saying I'm no longer in engineering. That's it," he said of the exchange. "And even if I was, when we get hired you have to sign this document, contract, saying you will not reveal anything we divulge during and after employment. So that's what I implied. It sounded like I was involved before with bitcoin and looked like I'm not involved now. That's not what I meant. I want to clarify that," he said.
McGrath Goodman, who spent two months researching the story, responded that she stood by her version of the exchange on his doorstep. "There was no confusion whatsoever about the context of our conversation – and his acknowledgment of his involvement in bitcoin." Followup Statement Newsweek issued a followup statement in regards to the denials ... "Newsweek stands strongly behind Ms. Goodman and her article. Ms. Goodman's reporting was motivated by a search for the truth surrounding a major business story, absent any other agenda. The facts as reported point toward Mr. Nakamoto's role in the founding of Bitcoin." I believe Newsweek has it correct. Leah McGrath Goodman did a fantsatic job of investigative reporting. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| China Exports Decline Unexpectedly, Trade Balance Negative Posted: 08 Mar 2014 10:09 AM PST In yet another downside surprise, China February Exports Tumble Unexpectedly. China's exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world's second-largest economy despite the Lunar New Year holidays being blamed for the slide.
The sharp drop in exports follows a series of factory surveys since the start of 2014 that point to weakness in economic activity as demand falters at home and abroad.
Exports in February fell 18.1 percent from a year earlier, following a 10.6 percent jump in January, the General Administration of Customs said on Saturday.
Imports rose 10.1 percent, yielding a trade deficit of $23 billion for the month versus a surplus of $32 billion in January.
That compares with market expectations in a Reuters poll of a rise of 6.8 percent in exports, an 8 percent rise in imports and a trade surplus of $14.5 billion.
Analysts cautioned against reading too much into single-month figures for January or February, given possible distortions caused by the long Lunar New Year holiday, which began on January 31 and covered early February. Many plants and offices shut for extended periods during the festival.
Still, combined exports in January and February fell 1.6 percent from the same period a year earlier, versus a 7.9 percent full-year rise in 2013. Imports rose 10 percent year-on-year in the first two months, compared with a 7.3 percent rise in 2013.
Exports to the United States edged up 1.3 percent in the first two months from a year earlier, while sales to the European Union rose 4.6 percent, according to official data.
CONFIDENT ON OUTLOOK
China's trade outlook is widely expected to be rosier this year in line with a recovery in developed countries. Minsheng Securities' Li said he expected exports to pick up in March. Expect More Downward SurprisesWhy everyone expects a rosy global economic forecast led by the US, Europe, and developed countries in general is a mystery. I expect more downward surprises of all sorts. China Overtakes US in TradeBy the way, back in January, the Financial Times reported China Overtakes US as World's Largest Goods Trader. China became the world's biggest trader in goods for the first time last year, overtaking the US for all of 2013 and finishing the year with record trade figures in December.
Coming fast on the heels of China taking over as the world's largest oil importer, the shift is another milestone as the country takes its place among the world's most powerful nations. Trade with the rest of Asia and increasing flows with the Middle East represent a shift in power away from the US, still the world's largest economy.
The total value of China's imports and exports in 2013 was $4.16tn, a 7.6 per cent increase from a year earlier on a renminbi-adjusted basis, according to figures released by the Chinese government on Friday.
The US will release its full-year figures in February but its total imports and exports of goods amounted to $3.57tn in the 11 months from January to November 2013, making it a virtual certainty that China is now the world's biggest goods trading nation.
The country became the world's biggest goods exporter in 2009 and Chinese imports and exports now account for more than 10 per cent of global goods trade, up from just 3 per cent in 2000.
Iron ore imports grow
It was a single cargo of iron ore arriving in Shandong Province on December 19 that pushed China's total trade for 2014 over the milestone $400bn mark, turning the nation into the world's largest trader of goods for the first time in centuries.
"Consensus expectations for Chinese steel demand and production are too low," said Christopher LaFemina of investment bank Jefferies, who argued that China's steel production would not peak for another decade due to continued demand from growing cities. In spite of obvious malinvestments in vacant cities, vacant malls, unused rail systems, etc., LaFemina thinks the boom will not peak for another 10 years. Amazing. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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