Bitcoin Weekly Recap 9-2-2016
Canadian Central Bank: Adopt Bitcoin, Stabilize the Price
In a new working paper published by Canada’s central bank, researchers Maarten RC van Oordt and Wlko Bolt have suggested that Bitcoin’s price will stabilize if it becomes accepted on a more widespread basis. After examining a number of price-influencing factors like market speculation, payment demands, and assumptions about future adoption and relevancy, the researchers concluded that many of the wild price swings seen in recent months could be mitigated with greater adoption and use of cryptocurrency. As they noted in their paper,
"Our model predicts that, as a virtual currency becomes more established, the exchange rate will become less sensitive to the impact of shocks to speculators’ beliefs and their inflow into and outflow from the virtual currency market. This prediction undermines the notion that the current high volatility of the exchange rates of virtual currencies will prohibit their widespread usage in the long run."
The authors also note that the fixed supply associated with a digital currency like Bitcoin could ultimately cause it to act as commodities do, rather than like traditional fiat currencies. According to the researchers, that would make these current periods of volatility nothing more than “a symptom of early development” – which means that the wild price swings will eventually disappear as the industry matures.
New Information on Baidu Bitcoin Ad Ban Emerges... But Still no Clear Answers
When China’s primary search engine, Baidu, recently announced the removal of all Bitcoin-related advertising from its search portals, there was a great deal of speculation about why the move was made. Some suggested that it was related to China’s presumed effort to develop its own cryptocurrency. Others assumed that it might have had something to do with the country’s recent efforts to crack down on financial crime. New details now indicate that the move might be related to a recent government investigation of Baidu in the wake of claims that the search engine had allowed advertising that allegedly caused one cancer patient to rely on questionable treatment that resulted in his death.
That case resulted in the Chinese Cyberspace Administration investigating Baidu to quell public outrage at Baidu. Though the allegations were found to be false, the search engine was still ordered to change the way it manages the advertising that consumers see when they use the online search feature. That, coupled with other factors related to China’s attitude toward Bitcoin, has caused some to speculate that Baidu merely removed the ads out of an overabundance of caution.
Terrorists, Bitcoin, and the Counterterrorist Perspective
Remember back at the start of the year when Europol admitted that there were no terrorists relying on Bitcoin to fund their operations – in spite of the many government claims that cryptocurrency was in fact a source for terror finance? Remember how all of those governments around the world relied on potential terrorist use of Bitcoin as an excuse to propose all manner of wacky rules and regulations to govern cryptocurrency use? Did you think the Europol admission would put an end to that nonsense?
Or did you think that terrorists might actually take the hint and attempt to do what they were being accused of doing anyway? Apparently, that is what has happened.
Recently, a former CIA counterterrorism analyst named Yaya Fanusie wrote a piece describing how he had discovered a group of terrorists using social media to drive a cryptocurrency fundraising campaign. The group is apparently called the Ibn Taymiyya Media Center, and consists of jihadists in Gaza. But if you think that Fanusie is another cryptocurrency-hating government crony spewing lies to discredit Bitcoin and other digital currencies, think again. His article on the Cipher Brief makes clear his opinion that he believes that this presents a golden opportunity for disrupting terrorist funding. As he notes, the digital currency community is already actively engaged in cooperation with law enforcement to police these types of illicit transactions. Given his sober perspective on the technology and background in counterterrorism, his article is well worth the read.
Singapore Central Bankers Offer New Bitcoin Rules
Singapore’s central bank recently announced a proposal for new regulations that would apply to digital currency exchanges. If accepted, the proposed framework would give the bank oversight over those exchanges by requiring them to seek licensing from MAS (the Monetary Authority of Singapore). The exchanges would be included in the regulations under the provisions dealing with companies that provide conversion services and money transmission. The proposed move will now wait until the comment period ends on October 31st before it can be considered for approval.