By Samuel Indyk
Investing.com – HSBC’s global head of FX research Paul Mackel has said China’s latest commentary regarding cryptocurrency regulation is not a “new development”.
In an interview with CNBC, Mackel noted that China had always been cautious on cryptocurrencies. In September 2017, China announced they would be closing down local cryptocurrency exchanges.
Mackel’s comments come in the wake of a tumultuous week for Bitcoin and other cryptocurrencies. Late on Friday, Chinese Vice Premier Liu He singled out Bitcoin as an asset that needs to be regulated more, in comments as chair of China’s Financial Stability and Development Committee.
The statement came just days after Chinese financial bodies tightened a ban on banks and payment services providing payments or other services in cryptocurrencies.
Some analysts have suggested the clamp down on cryptocurrencies in China is due to fears they could provide a direct threat to China’s own digital currency but Mackel does not believe this is the case.
“I don’t think there’s necessarily a conflict with the e-CNY (digital Yuan) whenever it will be launched, it’s a very different digital currency, so to speak,” Mackel said.
Other analysts are saying that this is just the start of cryptocurrency regulation across the globe.
“It’s become clear Beijing’s stance isn’t a one-off warning but the beginnings of a serious attempt to limit the decentralised power of cryptocurrencies,” said Hargreaves Lansdown (LON:HRGV) senior investment and markets analyst Susannah Streeter.
“Although the first blow has come from China, central bank fists are at the ready elsewhere.
“In the US, Jerome Powell, the head of the US Federal Reserve, said last week that cryptocurrencies pose a significant risk to financial stability, suggesting greater regulation may be necessary,” Streeter added.
Whether the US will consider measures as strict as China remains to be seen, but the Treasury announced plans last week that said any crypto payments above $10,000 would need to be reported to the Inland Revenue Service.
The price of Bitcoin was volatile over the weekend, dropping back towards $31,000 before stabilising on Monday morning and reclaiming some lost ground.
At 10:30, Bitcoin is trading around $36,500, off its lows seen last week but still around 40% lower than its record peak hit in April this year.