The era of big country game | The central bank accelerates research and development of digital currency, in parallel with international competition

Summary

Event: On July 30th, the US Senate Bank, Housing and Urban Affairs Committee held a hearing to review the regulatory framework for digital currencies and blockchains. This is the third digital currency special hearing held by the US Congress in half a month. In July 2019, the SEC finally released the compliance program, exempted the listing of some projects (through the Reg A+ regulations), and issued a letter of inaction for some projects. The People's Bank of China held a video conference for the second half of 2019 on August 2, emphasizing the acceleration of the pace of research and development of China's legal digital currency (DC/EP), tracking the development trend of domestic and foreign virtual currencies, and continuing to strengthen Internet financial risk remediation. Digital currency entered the era of big country gaming.

US government agencies have accelerated the promotion of digital currency regulation and tried to establish digital currency leadership . Until June 18, 2019, Internet leader Facebook and Visa, PayPal and other 27 institutions released Libra white paper for cryptocurrency. Congress also opened three hearings and set up a special department, Research and Innovation Department, to issue bit licenses. (Bitlicense). Strict regulation and encouragement of compliance became the general tone of New York State. The New York State Attorney General's Office (NYAG) filed a lawsuit against Tether, the digital currency exchange Bitfinex and their parent company iFinex, adding that New York State did not want to lose in the digital currency era. Financial leadership.

China's central bank has proposed to accelerate the development of legal digital currency. The People's Bank of China held a video conference for the second half of 2019 on August 2 to make arrangements for key tasks in the second half of the year. The meeting requested that eight key tasks be done in the second half of the year. One of the key tasks is to develop financial technology, strengthen follow-up research, and actively meet new challenges. Accelerate the pace of research and development of China's legal digital currency (DC/EP), track and study the development trend of virtual currency at home and abroad, and continue to strengthen Internet financial risk remediation. The central bank began to pay attention to and study the blockchain a few years ago, and combined with China's national conditions to specify more stringent regulatory norms, while encouraging blockchain innovation.

With China and the United States as the international representative, the blockchain industry has begun to enter the era of big power game: on the one hand, the big countries have accelerated the pace of legislative supervision, on the other hand, they are competing for the leadership of the upcoming digital currency era. The blockchain industry can only develop faster and more deeply to serve the society with innovation on the regulatory track.

Last week's market review: Chainext CSI 100 decreased by 9.06%, and the segmented Chinese entertainment social class performed best. From the perspective of the segment, the pure currency sector performed slightly better than the Chainext CSI 100 average of 13.68%, payment transactions, IoT & traceability, entertainment social, commercial finance, foundation enhancement, infrastructure chain, storage & computing and AI. The performance of the sector was inferior to the Chainext CSI 100 average of 2.37%, -5.19%, 0.85%, 1.38%, 3.05%, 4.85%, -0.9%, and 0.85%.

Risk warning: regulatory policy uncertainty, project technology progress and application landings are not as expected, and cryptocurrency-related risk events occur.

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1. Hotspot tracking: the era of digital currency entering the big country game: strengthening supervision and international competition in parallel

US government agencies have accelerated the promotion of digital currency regulation and tried to establish digital currency leadership. In 2017, the price of bitcoin rose from less than 1,000 US dollars to nearly 20,000 US dollars, which attracted great attention from all countries. In early 2018, Congress held three hearings to discuss the role of the Securities and Futures Commission (SEC) and the Commodity Futures Commission (CFTC) in the virtual currency industry. It also discussed Bitcoin and the first token issue (ICO) in full swing in 2017. . Subsequently, the frequency of congressional hearings declined. Until June 18, 2019, Internet leader Facebook and Visa, PayPal and other 27 institutions released the Libra white paper for cryptocurrency. Congress also opened three hearings, two directly to Libra. Although the theme of the three hearings was “Review of the regulatory framework for digital currency and blockchain”, members of the conference also frequently mentioned Libra and its regulatory layer on data protection and privacy protection, anti-money laundering and counter-terrorism. Concerns about financing and other aspects. We believe that there are three points worthy of attention in Congress for digital currency regulation:

( 1) As a US legislature, Congress is still unclear about the practical application of blockchain and digital assets. However, due to the influence of Facebook's layout blockchain, it is increasingly recognized that blockchain may become a wave in the future and must be Highly concerned, so as not to miss the leadership.

(2) Congress has serious concerns about the possible negative impacts of the blockchain, such as whether it can truly protect individuals' control over data, whether they can effectively anti-money laundering, and whether they can effectively counter terrorist financing.

(3) Congress is unclear whether the current US regulatory framework for digital currencies is necessary, for example, whether it is necessary to further clarify the definition of blockchain or digital currency to define its nature; whether it is necessary to establish a single digital currency regulator To end the current state of bullish supervision of digital currencies by institutions such as the Securities and Futures Commission (SEC), the Commodity Futures Commission (CFTC), and the Internal Revenue Service (IRS). In July 2019, the SEC finally released the compliance program, exempted the listing of some projects (through the Reg A+ regulations), and issued a letter of inaction for some projects. A tax expert said the US Internal Revenue Service (IRS) is considering cryptocurrency taxation as a high priority, but may need to provide more specific guidance before advancing its enforcement activities. Federal government agencies have accelerated the pace of digital currency regulation and tried to bring the industry into the norm as quickly as possible. As a global financial center, New York State has set up a new digital currency regulatory license (Bitlicense) in the state, and has set up a special department, the Research and Innovation Department, to issue Bitlicense. Strict regulation and encouragement of compliance became the general tone of New York State. The New York State Attorney General's Office (NYAG) filed a lawsuit against Tether, the digital currency exchange Bitfinex and their parent company iFinex, adding that New York State did not want to lose in the digital currency era. Financial leadership.

China's central bank has proposed to accelerate the development of legal digital currency. The People's Bank of China held a video conference for the second half of 2019 on August 2 to make arrangements for key tasks in the second half of the year. The meeting requested that eight key tasks be done in the second half of the year. One of the key tasks is to develop financial technology, strengthen follow-up research, and actively meet new challenges. Accelerate the pace of research and development of China's legal digital currency (DC/EP), track and study the development trend of virtual currency at home and abroad, and continue to strengthen Internet financial risk remediation. The central bank began to pay attention to and study the blockchain a few years ago, and combined with China's national conditions to specify more stringent regulatory norms, while encouraging blockchain innovation.

With China and the United States as the international representative, the blockchain industry has begun to enter the era of big power game: on the one hand, the big countries have accelerated the pace of legislative supervision, on the other hand, they are competing for the leadership of the upcoming digital currency era. The blockchain industry can only develop faster and more deeply to serve the society with innovation on the regulatory track.

2. Relevant news from governments: The UK Financial Conduct Authority publishes comprehensive guidance on cryptographic assets to determine which tokens fall under their jurisdiction

The Brazilian Taxation Office has introduced a new regulation that requires a tax return of more than $7,600 per month for cryptocurrency transactions. The new regulations of the Brazilian Federal Tax Administration are in force for the enforcement of cryptocurrency transactions, and companies, individuals and brokers using cryptocurrency financial trading systems are subject to compliance. The new regulations require monthly tax returns to the Brazilian Taxation Office. If the amount of cryptocurrency accumulated or separately traded in a month exceeds 30,000 BRL (approximately US$7,600), it must be reported to the tax bureau. Such transactions include trading, Various operations of trading, donating, and transferring cryptocurrency funds. Transaction information must be provided through the National Tax Return System, which can be accessed by the Virtual Service Center (e-CAC). The first registration will be based on August data and will be implemented from September.

The UK Financial Conduct Authority publishes comprehensive guidance on cryptographic assets to determine which tokens fall under their jurisdiction. The UK Financial Conduct Authority (FCA) finalized its Guide to Encrypted Assets, which clarifies which tokens fall under its jurisdiction. Most of the rules issued on Wednesday were presented in Consultation Paper CP19, which was released in January this year for public comment. As is widely expected, the final guide does not completely change the regulatory landscape, but rather clarifies when certain types of cryptographic assets belong to existing categories. FCA said the consultation received a total of about 92 responses from various companies, including banks, industry associations and cryptographic exchanges, and most respondents supported the proposals. The agency said that any token that is not a securities token or an electronic currency token is unregulated. However, market participants should be aware that certain activities that use tokens may still be regulated.

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3. Industry chain related dynamics: BTC completion income increased by 6.8%

(The following source website data is updated to August 3)

Last week, BTC added 2.31 million new transactions, up 7.0% from the previous month; ETH added 5.08 million new transactions, up 4.8% from the previous month.

Last week, BTC miners' average daily income was US$20.74 million, up 6.8% from the previous month; ETH miners' average daily income was US$3.02 million, a decrease of 1.7% from the previous month.

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Last week, BTC's average daily computing power reached 73EH/s, up 7.7% from the previous month; ETH's daily average computing power reached 176.4TH/s, down 0.6% from the previous month.

Last week, the difficulty of mining the whole network of BTC was 9.01T, which was 0.2% lower than the previous month. The next difficulty adjustment day was on August 5, the estimated difficulty value was 9.98T, and the difficulty increased by 10.75%. The average mining difficulty of ETH whole network last week was 2.2T, up 0.7% from the previous month.

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4. Last week's market review: Chainext CSI 100 rose by 11.02%, and the pure currency in the segment was the best.

We introduce the professional index product of the token market, the Chainext CSI series index, in which the CSI 100 index [1] represents the overall trend of the market; the CSI 5 index [2] represents the trend of the market oversized currencies; the CSI 21-100 index [3] Represents the trend of small caps in the market. As of last Sunday (August 4th), the Chainext CSI 100 index was 886.85, up 11.02% from the previous week, and the total volume of 24 hours on Sunday was 8.313 billion US dollars; among them, the average global price of BTC was 10970.18 US dollars, compared with the previous period. It rose by 14.61%; the global average price of ETH was 222.67 US dollars, up 5.76% from the previous period.

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From the perspective of the segment, the pure currency sector performed slightly better than the Chainext CSI 100 average of 13.68%, payment transactions, IoT & traceability, entertainment social, commercial finance, foundation enhancement, infrastructure chain, storage & computing and AI. The performance of the sector was inferior to the Chainext CSI 100 average of 2.37%, -5.19%, 0.85%, 1.38%, 3.05%, 4.85%, -0.9%, and 0.85%.

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risk warning

1. Regulatory policy uncertainty;

2. The technical progress and application of the project fell below expectations;

3. Encryption currency related risk events occur.