Recent alerts of digital currency: positive and negative
In a statement dated 19 Dec 2017, Monetary Authority of Singapore (MAS) cautions the public against investments in cryptocurrencies[1]. MAS is concerned that members of the public may be attracted to invest in cryptocurrencies, such as Bitcoin due to the recent escalation in their prices. Cryptocurrencies are not legal tender and there is no regulatory safeguard for investments in cryptocurencies.
Members of the public who lose money from investing in cryptocurrencies will not be able to rely on any protection afforded under legislation administered by MAS. MAS also considered the recent surge in the prices of cryptocurrencies to be driven by speculation and the risk of a sharp reduction in prices is high. Investors in crypto currencies should be aware that they run the risk of losing all their capital.
The volatility of crypto currencies can also be seen when an announcement by Justice minister Park Sang-ki (on 11 Jan 2018) that the government was preparing a bill to ban trading of crypto currencies on domestic exchanges lead Bitcoin to fall as much as 10% on the Luxembourg-based Bitstamp exchange. The local price of Bitcoin in South Korea also plunged as much as 21% in midday trade to 18.3 million won after the minister’s comments. Nonetheless, Bitcoin still trades at around a 30% premium in South Korean compared to other countries.
On the other hand, a press release by coindesk mentioned that “a new bill submitted to the Arizona Senate would, if approved, allow people to pay their state tax liabilities using Bitcoin and other cryptocurrencies”.
Disclaimer:
This article is for general reference only. Do seek clarification or professional advice from authorities if needed.
References
https://www.ft.com/content/0d5ff7d4-f67d-11e7-88f7-5465a6ce1a00
[1] A cryptocurrency is a form of digital token secured by cryptography and typically used as a medium of exchange, a unit of account or a store of value. Examples of cryptocurrencies include Bitcoin, Ether and Litecoin.
