International cooperation is about to emerge: the crypto market has affected the global financial market

The G20 Finance Ministers Summit closed on the 10th. At the meeting, a consensus was reached that “the global stable currency should not be launched before the legal and regulatory policies of various countries are not yet mature”. The main reason for this is the sudden change in market conditions.

The crypto market has affected the global financial market

The Financial Stability Board (FSB) issued a report in the fall of 2018 stating that cryptocurrencies will not pose a threat to the stability of the global financial system. However, the report of the International Monetary Fund in October this year denied this. The “Global Financial Stability Report” showed that the increase in the market value of encrypted assets and price fluctuations have gradually increased the impact of market sentiment, and the investment of financial institutions in the encryption field has soared. .

Entering 2021, every rise and fall of cryptocurrencies, especially Bitcoin , has greatly affected the traditional stock market. This has also attracted the attention of major international financial institutions.

In June, FATF (Financial Action Task Force), an international organization that formulated anti-money laundering measures, included Malta and the Philippines on its list of gray countries that needed closer monitoring. As we all know, Malta is a paradise for the crypto market.

The United States is also strengthening supervision and clearing the way

Another important trend recently is that the SEC has launched a very strong regulatory posture. With China’s finishing work on mining and digital currency trading markets, Gary, the chairman of the US Securities and Exchange Commission SEC, stated that he is ready to introduce investor protection rules for the cryptocurrency market, including mandatory registration with the US Securities and Exchange Commission and the introduction of stablecoins. The regulatory framework than traditional banks makes it easier for financial authorities to supervise cryptocurrency companies.

The specific details of the regulations have not been disclosed, but according to Wall Street, the Biden administration will urge Congress to consider legislation requiring stablecoin issuers to be registered as financial institutions and subject to strict supervision.

However, the purging of the US government has triggered a surge in Bitcoin. The main reason is that investors believe that the US cleanup this time is clearing the way for the crypto market.

On October 15th, Liande De news revealed that the US Securities and Exchange Commission (SEC) issued a tweet to remind investors that before investing in funds holding bitcoin futures contracts, be sure to carefully weigh the potential risks and benefits. The tweet also attached an investor announcement on the SEC website regarding Bitcoin futures trading funds, which was released in June this year.

Some Twitter netizens speculated that the release of such news at this point in time may indicate that the SEC will apply through the Bitcoin futures ETF. Lende’s quotation shows that as of press time, BTC broke through $61,000 and is now reported at $61,256.08, an intraday increase of 7.07%.

CBDC is ready

Another alternative (or supplementary program) is the CBDC of central banks. Countries are still discussing this issue non-stop.

China’s digital renminbi has attracted the attention of the world. The G7 has made no less than five declarations to express the need to “check” the development of the digital renminbi. However, no country has directly stood up for its position on the basic technological layout of various countries.

But the wind direction is changing slightly.

In addition to the above change in the SEC’s attitude, the Bank of Japan President Haruhiko Kuroda has recently begun to support the development of CBDC. The Bank of Japan has already started a demonstration experiment this spring. In April 2022, this experiment will be carried out to the second step, mainly to test the construction of legal currency transactions and actual payment scenarios.

The Bank of Japan also stated that it will start to sort out technical issues and points of contention in issuance, focusing on studying and researching foreign central banks including China, Europe and the United States.

Moreover, in addition to the fetal movement of the digital dollar, the digital euro is also beginning to approach. In July, the European Central Bank announced the launch of the digital euro project and launched related investigations. The euro system has organized a number of experiments on the digital euro, involving privacy, anti-money laundering, and circulation restrictions. The European Central Bank said that no major technical obstacles were found during the experiment.

Transfer of the mining center

Another issue that needs attention is the transfer of mining centers.

At the beginning of this month, data from the International Monetary Fund’s Global Financial Stability Report showed that there is still a certain market for mining in China.

However, a data from the University of Cambridge in the United Kingdom on the 13th showed:

In September 2019, China’s Bitcoin mining accounted for 75.5% of the world’s total; before the fall of 2020, about 50% of the world’s mining machines were in China.

However, as the country began to clean up its mining development in May this year, this figure dropped to 44.0% in May this year, 34.3% in June, and zero after July. In September, the National Development and Reform Commission and various departments issued a notice prohibiting virtual currency “mining” activities in the name of a data center, and there is nowhere for the mining industry to escape.

Conversely, the recent embrace of digital currencies in the United States has attracted a large number of mining companies. According to this data from Cambridge, the United States has accounted for 35.1% of the world, occupying the first place. Just in May, this data was still around 10%, and it soared to 21.8% in June.

This is more consistent with the data of the International Monetary Fund.

Neighboring Kazakhstan has become the second soaring region because of its cheap electricity bills and geographical proximity to China. Bit Minel once led to insufficient electricity supply in the country. Before June, Kazakhstan accounted for less than 10%. In August, it had risen to 18.1%, and it currently ranks second in the world. And, starting in 2022, the country will increase taxes on mining companies.

Neighboring Ukraine will continue to implement the plan to build a mining plant next to the Zaporozhye nuclear power plant. It is estimated that this move will attract a large number of mining machines.

El Salvador, which set Bitcoin as a legal tender in September, has also indirectly announced its entry into the mining industry. El Salvador’s surplus geothermal energy and volcanic thermal energy will be one of the opportunities for the crazy development of mining. This may also be one of the intentions of the President of El Salvador.

Bitcoin mining consumes 130 TWh of electricity each year, which is equivalent to the annual consumption of the entire Argentina.

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