Happy new year everyone! The team at Asia Crypto Today wishes you all good health and big gains in the coming year! Whilst it’s only been 1 week into the new year, we’ve been treated to huge announcements on a national level from China and South Korea. These announcements will certainly shape and dictate the direction of the cryptocurrency scene in the coming year. And of course the crypto scene thrives on drama, and we’ve certainly seen that as the internal conflicts in Bitmain have carried over into 2020. Let’s look at the top Asian cryptocurrency news this week:
China’s National Cryptocurrency- No test run yet, but everything’s going smoothly
The People’s Bank of China (PBoC) held its Working Conference from 2-3 January 2020. In their press statement the PBoC reported that the development of fiat digital currency i.e. DCEP was progressing smoothly in 2019. Looking forward to 2020, the PBoC intends to implement its fintech development plan and continue advancing the development of its digital currency.
It was previously reported by Chinese news outlet Caijing in early December 2019 there will be an initial pilot of DCEP in Shenzhen before the end of 2019. However this deadline has passed and no pilot was launched yet. Maybe we will hear news of a test run soon?
Ripple partners with Thailand’s Siam Commercial Bank (SCB) to create cross border payment app
According to a blog post from Ripple, then Company has partnered up with SCB, Thailand’s oldest bank. Together they have created a mobile app- “SCB Easy” which allows cross-border payments to be conducted in a matter of seconds and at low cost.
At Ripple’s annual customer event, SCB’s Senior Vice President demonstrated the app in action by sending a payment to a recipient bank account within 40 seconds. SCB will also be working with Ripple to offer cross-border QR payments. According to SCB, this means that tourists coming to Thailand can use the mobile application from their home country to scan for payments. Thereby eliminating the need to exchange to local currency.
SCB is positive its app will bring satisfaction to their customers. And they are certainly on the right track. According to a PwC survey, 86% of China’s population uses mobile payment apps. Not far behind is Thailand, where 67% of its population is doing the same.
Bitmain drama is really starting to hurt. Layoffs, and will its Texas mining ambitions go up in smoke?
Bitmain really gave the cryptocurrency community something to talk about when Co-founder Micree Zhan was ousted by CEO Jihan Wu back in November 2019. Zhan was clearly unhappy about this, and even sued to regain control of the Company.
On 6 January 2020, DMG Blockchain Solutions- the manager of Bitmain’s cryptocurrency mining farm in Texas announced it will cancel its management agreement with Bitmain. DMG says it because it was not proven to be cost efficient or effective for both companies. Certainly a quick turn of events considering it was only in October 2019 when Bitmain launched its new mining facility in Texas with plans for it to become the largest Bitcoin mining facility.
It is unknown whether the Texan mine is still operating, or whether Bitmain will find a replacement manager.
On the same day, Bitmain began its “staff optimisation” plans by allowing employees to resign in exchange for compensation. Bitmain’s aim is to reduce its workforce by 50% in time for the next Bitcoin halvening. On the sidelines, Zhan expressed his firm opposition to the layoffs, saying it was “suicide” for the Company.
Of course in true Bitmain drama fashion, is it really as simple as “staff optimisation”? According to Founding Partner of Primitive Ventures, Dovey Wan, disgruntled former Bitmain employees have put up banners protesting the Company’s “illegal layoffs”.
We’ve done a bit of digging around Weibo where this image was originally found. Posts have called for anyone in the know to come out with an explanation. But so far there has only been silence.
South Koreans rejoice (for now) as profits from crypto transactions are not taxable
South Korea’s Ministry of Strategy and Finance recently announced that under existing law, profits by individual investors through crypto transactions are not taxable. However South Koreans may not have long to celebrate as the Ministry is amending its tax laws so crypto transactions will become taxable. Officials expect the revised bill on the current tax laws to be introduced in the first half of this year.
Further, Korea’s Presidential Committee focusing on technological development made crucial suggestions to the government for the development of cryptocurrencies as an asset class. These include: allowing financial institutions to launch bitcoin derivatives, developing a Korean crypto escrow solution and listing Bitcoin directly on the Korean Stock Exchange.
The taxation of cryptocurrency assets could a prelude to recognizing and regulating cryptocurrencies as an asset class. This is a welcome move for mass adoption, but we wonder what will happen in the months leading up to the revised tax laws? South Koreans make up approximately 10% of all Bitcoin trades. We’ve also seem the Korean frenzy flocking to overseas OTC desks to trade and profit off the local Kimchi Premium last year. So will we see Koreans driving up demand for Bitcoin in the coming months before the new tax laws are in force?