"Bitcoin Outlawed in India" & other Geopolitical/Economic News for April 3

Here is some of the economic news from around the globe for today, April 3rd 2017.

These stories came up in Ken Schortgen's "The Daily Economist update for 3 April 2017 - China - U.S. Summit Time "



This is one of the Youtube channels I listen to for updates on the news, the markets, etc.

1st Story - Russia's Alternative to "SWIFT" Banking System is Ready:

If the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is shut down in Russia, the country’s banking system will not crash, according to Central Bank Governor Elvira Nabiullina. Russia has a substitute.

"There were threats that we can be disconnected from SWIFT. We have finished working on our own payment system, and if something happens, all operations in SWIFT format will work inside the country. We have created an alternative," Nabiullina said at a meeting with President Vladimir Putin on Wednesday.

China also has alternative systems (here's a story from 2015) - the general theme is that big players in the world economy might be making a move away from the dollar-dominated system, or are at least putting measures in place for a smooth(er) transition amidst uncertainties and fragility regarding the current global markets.

2nd Story - "Japan's Bitcoin Law Goes Into Effect Tomorrow"

As you may or may not know, Japan's economy has been in bad shape for awhile now. But Japan has passed a low recognizing Bitcoin as a new legal payment method:

Japan is set to begin recognizing bitcoin as a legal method of payment starting tomorrow.

The country's legislature passed a law, following months of debate, that brought bitcoin exchanges under anti-money laundering/know-your-customer rules, while also categorizing bitcoin as a kind of prepaid payment instrument.

Meanwhile, India's Central Bank is cracking down on Bitcoin (our 3rd Story).

"Bitcoin Outlawed and Users Could Be Considered to Be Money Launderers in India According to Central Bank"

In a statement made by the Indian government in collaboration with comments made recently by their central bank, use of any virtual currency other than the Rupee is to be considered unauthorized and users to be assumed as money launderers upon investigation.

The government today [this was March 28] said use of virtual currencies like Bitcoins is not authorized by RBI and could result in breach of anti-money laundering provisions.

I find it extremely interesting we are seeing one (struggling) country recognize Bitcoin as a legal payment method, whereas another country is now outlawing Bitcoin altogether, and even posturing to strike fear into would-be users of the cryptocurrency.

4th Story - "Kiev 'Likely to Resume Shelling in Donbass' After Receiving New IMF Loan"

The IMF approved a four-year $17.5-billion loan program in exchange for reforms in Ukraine in March 2015. The aid package to be paid out in installments is open for review on a quarterly basis. Kiev has already received $7.7 billion in aid, with the last tranche unveiled in September 2016. In 2017, Ukraine expects to receive from the IMF another $5.4 billion.

Basically, the IMF is funding war in Ukraine (what else is new). Kiev is a mess...

"Kiev 'Likely to Resume Shelling in Donbass' After Receiving New IMF Loan"

This is why the whole "Russians influenced the elections" debate is so ridiculous & hypocritical. NATO governments (including the US) supported the ouster of the legitimate Ukrainian president because he was too pro-Russian for their liking.

a reply to: FamCore

I don't think either report is too good for 'virtual currencies'.

In Japan they are fenced in as a pre-paid (ie. another currency underpins the bitcoin) instrument. A bit like an Amazon gift card.

In India, I suspect the fluff around money laundering is noise. The real story I suspect is fiscal control via 'Virtual Credit Cards' (ie. pre-paid credit cards) in fiat Rupees.

I would think Virtual Credit Cards have the edge given the weight if mindshare held by fiat currencies.

No, Bitcoin isn’t illegal in India By Nikhil Pahwa ( @nixxin , +NikhilPahwa ) on March 30, 2017

A few days ago, PTI ran a story saying that “Use of Bitcoin illegal, can attract anti-money laundering law”. It cited a response in the Rajya Sabha by the Minister of State for Finance Arjun Ram Meghwal, but interpreted the statements incorrectly. Meghwal was responding to a question from Dr KVP Ramachandra Rao, about “whether Government shares the reported comment of RBI that virtual currencies pose a financial risk; and if so, how will it address the problem while pushing for a cashless economy?” To this, Meghwal pointed towards the position of the Reserve Bank of India “that it has not given any license / authorization to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency”, and more pertinently, that “any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk.” Thus Bitcoin is in that space where it is neither legal nor illegal: unregulated. The absence of a regulation doesn’t make it illegal. MediaNama readers might recall that in 2014, the RBI had said that it would not regulate any Virtual Currency including Bitcoin in India and warned people who were dealing with the currency in India of the risks involved, saying that they’re exposing themselves to financial, legal, operational and security related risk. Since then, the RBI has been “examining the issues associated with the usage, holding and trading of VCs under the extant legal and regulatory framework of the country, including Foreign Exchange and Payment Systems laws and regulations.”

www.medianama.com...
if you are going to post news stories from youtube you should double check sources first

a reply to: PhoenixOD

Technically, no it's not illegal in India but in April there will be a verdict which could make this so:

There will be more discussions; a verdict will be declared soon on the legality of the cryptocurrency in India. As it stands, bitcoin buying, selling, trading or mining is not illegal by any law in India.

link

Kenneth Schortgen seems to know what he's talking about - I may have misunderstood this piece but the legality of bitcoins is yet to be determined, and the "Daily Economist" podcasts have a good track record.

a reply to: Doxanoxa


I doubt whether any country will ban Bitcoin, as the guys and the associates of those who make the laws launder the most amount of money. The inconveniences placed on the rest of us are just window dressing, and lip service to say they are stamping down on illegality.