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J. Christopher, the current chairperson of U.S Commodity Futures Trading Commission has said that one of the main reasons why the internet thrived is because the government did not impose too stringent measures to control it. While speaking to CNBC in an interview, the chairperson said that there is need for a “do no harm approaches” approach when creating policies to control cryptocurrency in the United States and other parts of the world.
No Need to Inhibit Innovation
When creating policies to oversight cryptocurrencies, the regulator said that the government needs to be careful not to come up with measures that will inhibit future innovations. He also went ahead to state that the team should be cautious during the policy creation process to avoid manipulation.
As mentioned earlier, Christopher repeated the phrase that the internet only flourished because there was not much government interference. He is confident that such as approach could greater help the cryptocurrency industry to also flourish despite the various challenges that faces it on a daily basis.
The do harm approach means that the government should first appreciate the fact that cryptocurrencies cannot affect the economy negatively. With this in mind, they can come up with policies that are holistic and in line with the current market trends and interests of the industry leaders. Note that there are companies that have invested millions of dollars in this technology, and one wrong policy could result in a massive loss that could affect the economy at large negatively.
The chairperson also said that there is need for caution to avoid some form of manipulation and fraud that could flush down all the gains achieved by cryptocurrency markets. When asked about the specific risks associated with fraud, Christopher stated that during the policy making stages, slow and strategic steps should be taken to ensure that all the loopholes in the system are sealed.
Mandate of CFTC
CFTC is the main government body that is tasked to regulate cryptocurrency development and trading in the United States. It is also involved in monitoring of derivative markets as well as futures. Back in 2015, the organization stated that virtual currencies are indeed commodities that need to be regulated.
Securities and Exchange Commission and CFTC have warned the public about the fraud risks associated with virtual currency markets. When asked about the assumption that the government was taking too long to come up with robust policies for regulating cryptocurrencies, he said that it’s not the case. He used bitcoin futures being legalized in the U.S is a clear indication that the government is keen on evaluating the industry.
Closing Remarks
The “do no harm approach” recommended by CFTC will greatly help creation of policies that are in line with the market trends. The needs and expectations of all the leaders will be put into consideration during the policy creation process and this will greatly help to ensure that we have policies that no not affect any section of the industry negatively.
Russia is one of the countries that have put in place strict measures that hinder cryptocurrency trading. China and India have also restricted crypto trading and this has resulted in a sharp increase in demand for over the counter investment in cryptocurrency assets such as Bitcoin.
As noted by CCN, the daily trading volume of digital currencies such as Ethereum and Bitcoin in Moscow reaches $50 million on some days. Well, this figure is small compared to trading activities in the large cryptocurrency exchange platforms, but given the stringent measures put in place by Russian government, the figures are commendable.
At the moment, it is not illegal to invest in cryptocurrencies based on the fact that the local laws categorize cryptocurrencies as properties. The only requirement is that the funds invested in the currencies have to come from a legal source. This means that residents of Russian who are interested in investing in cryptocurrencies can purchase and hold Bitcoin or any other altcoin of choice without worrying about being arrested by the government.
Uncertainty about Regulations
The growth of crypto market in Russia has stagnated compared to other countries that have embraced this new technology. One of the main causes of this stagnation is lack of proper framework and policies to regulate trading. While it is not illegal for people residing in Russia to own a cryptocurrency, it is not clear if companies are permitted by the government to run cryptocurrency trading platforms.
A few months ago, the government did draft three legislations that would govern cryptocurrencies. The three focused on legality of exchange operators and the trading platforms. Unfortunately, the three legislations are yet to be approved and have been postponed until December 2018. Therefore, we will not see any accredited cryptocurrency exchange platform in Russia until the legislations are signed and passed as law.
At the moment, the local OTC platforms are relying on the existing global cryptocurrency exchanges to get cryptocurrencies into the Russian market. On average, they charge 1.5 to 2 percent commission rate and manage to generate hundreds if not thousands of dollars in profit on a daily basis.
Similar Trend in China
Unlike Russia, China has very strict rules that prohibit any form of trading in bitcoin or any other currency. It is illegal for local residents to purchase or get involved in cryptocurrency business. Nonetheless, investors are still trading despite the ban by using VPNs and fintech platforms such as Alipay and OTC.
The government has made it impossible for investors to convert fiat currency into digital assets, but they are still able to invest millions of dollars in altcoins and trade them discreetly on a daily basis. This is proof that it is not possible for governments to take full control of the industry and this is a plus for the industry system it is meant to be decentralized and uncontrolled by the government and central banks.
Concisely, analysts project increased cryptocurrency trading activity in Russia, China, India and other countries thanks to technological advancements that helps investors to hide their online activity.
Morgan Stanley, one of the largest investment banks in the world is rumored to the in the process of creating a product that will allow its clients to swap fiat currency for bitcoin and vice versa. As noted by CCN, this sixth largest bank here in the United States in terms of assets is quietly developing a derivatives product that will benefit clients who are interested in investing in Bitcoin.
The report indicates that the U.S bank will provide smart contracts that will provide investors with the much-needed synthetic exposure to the trading of bitcoin on various exchange platforms. Another verified source also revealed that investors will be able to go long or short using price return swaps. The bank will charge a fee for each transaction to support the functionalism of the platform.
Note that CEO James Gorman had earlier indicated that the bank would not allow its clients to trade in cryptos directly using the bank. The sudden change of heart could have been informed by the sharp increase in value of the market as well as widespread adoption and creation of new digital currencies. The product is almost completely and currently waiting internal approval for it to be made available to the customers.
This bank joins an increasing number of financial institutions who are evaluating the best ways of incorporating cryptocurrencies into their financial operations. Citigroup and Goldman Sachs have also hinted about providing bitcoin derivatives products to their customers.
Intercontinental Exchange (ICE) New Product
In other news related to cryptocurrency trading, Intercontinental Exchange is in the process of creating the first physically delivered bitcoin futures product. Note that ICE is the largest stock exchange platform in the world at the moment. Once this new product is launched, investors will be able to settle contracts using actual BTC instead of fiat currency such as the US dollar. In fact, most of the bitcoin futures products offered by platforms such as CBOE and Chicago based exchanges CME relying heavily on fiat currency.
Closing Remarks
The news that Morgan Stanley is in the final stages of launching a product that will cater for customers who are interested in cryptocurrency is good news for the industry. It shows that banks and governments have understood how blockchain technology works and are no longer afraid that trading in cryptocurrencies could affect the economy negatively.
Continued development of similar products will help increase the number of people who invest in the currencies. It will also help spread the world about the power of having digital assets to countries that are yet to adopt this technology fully. Nonetheless, it is important for the banks and governments to work together to create policies that will promote the growth of the industry. These policies will ensure that all parties involved get value for money and don’t end up losing money on wrong deals. Cryptocurrency and blockchain technology is here to say and will continue to improve lives of millions of people from all across the globe.
AlphaPoint, one of the leading blockchain technology based companies in the world, has announced that it will soon launch cryptocurrency indexes and technology that will allow it to create smart baskets specifically for cryptocurrencies.
As noted by HPC Wire, the company is focused on giving companies the ability to digitize their assets and as well, as operate digital asset exchanges in any part of the world. The statistical performance of AlphaPoint Indexes will have a significant positive impact on the cryptocurrency markets.
The smart basket functionality extends to the company technology and is in line with its goal of digitizing and creating white label asset exchange platforms. Full implementation of these two developments will see the company become the premier provider of products that can be used to benchmark performance of digital assets.
AlphaPoint Leaders Index
AlphaPoint Leaders Index is made of between 8 and 15 tokens that cover approximately 805 of the global cryptocurrency market capitalization. It will give a clear picture of the highest valued crypto assets in the world.
AlphaPoint Fast Movers Index
AlphaPoint Fast Movers Index will be made up of 8-15 tokens in terms of trading volume. Unlike AlphaPoint Leaders Index, this one will give a clear picture of the liquid crypto assets in the market.
Apart from giving asset managers as well as individual industry leaders the ability to monitor performance of assets against the broad cryptocurrency market, the AlphaPoint indexes can also be licensed and used to create derivatives of multiple products.
AlphaPoint Exchange Product
By making full use of AlphaPoint Exchange product, the company will be able to reproduce the performance of the underlying indexes. More importantly, it will give exchange operators the ability to create additional products for their clientele without spending a fortune.
AlphaPoint Smart Baskets
AlphaPoint Smart Baskets framework is designed by professionals who have years of experience in this industry and are committed to ensure that it delivers the expected results. The framework has the ability to create a token that resonates with the performance of the foundation or underlying indexes. It achieves this goal by automating the simultaneous purchase sale and bid offers on the cryptocurrencies listed in the licensed index.
One of the main advantages that investors will get from AlphaPoint Smart Baskets is that they will now have the opportunity to take broader and confident positions in the cryptocurrency niche and at the same time be passively involved in re-balancing their portfolios.
When making this announcement, the company officials stated that they were excited to finally provide a transparent index that is based on rules and regulations. The company is also confident that the products will soon become the most trusted and reliable benchmark in the ever-growing cryptocurrency industry. The Chief Executive Officer also stated that just like the existing exchange technology and digitization, the data powered tools would give institutions the muscle they need to come up with new products in the cryptocurrency world.