Although the U.S. stock market's third-quarter earnings season is gradually reaching a climax, the payment giant PayPal stole the limelight this week with its "sudden attack" on the cryptocurrency market. On Wednesday, PayPal’s announcement of direct entry into the cryptocurrency market directly pushed Bitcoin to a new high in 15 months and also drove the company’s share price up by nearly 5%. On October 23, it was revealed that PayPal's ambitions in the encryption field are more than just a direct entry into the cryptocurrency market, it was also negotiating acquisitions of BitGo, an encrypted custody service company.
The People's Bank of China issued a notice on the public comment on the "Law of the People's Republic of China on the People's Bank of China (Revised Draft for Solicitation of Comments)". The "Draft for Comments" stipulates that the Renminbi includes physical and digital forms to provide a legal basis for the issuance of digital currency; to prevent risks related to virtual assets, no entities or individual may produce or distribute digital notes and digital tokens to take the place of the renminbi in circulation.
Driven by a mixture of the above, Bitcoin saw a very strong 13% price increase over the past week which allowed it to break above the $13,000 handle. At the start of October, Bitcoin once again managed to penetrate above a symmetrical triangle pattern which is the first signs that a bull run is about to form.
Looking ahead, once the buyers break $13,000, the first level of resistance lies at $13,200. Above this, resistance lies at $13,500, $13,815, and $14,000. If the resistance levels hold past these, the story will be totally different.
One of the reasons why we are willing to discuss more theoretical questions such as whether, digital asset/technology really promotes inclusive finance, as digital assets enter mainstream? According to BIS, in the past hundreds of years, the output of the financial industry, namely credit, has expanded significantly, but the price of output, the interests, has not fallen. The core of asset digitization is the transparency, traceability, and penetrability of information, as well as the wide and complete information sources, rather than structured derivatives. Big data reduces information asymmetry and does not rely on real estate as collateral. However, information that is too transparent may also lead to procyclicality and enhance banking moral hazards. So, will the development of Digitalisation reduce procyclicality? Or has it changed the mechanism that drives procyclicality? A more reasonable design may be to allow everyone to use currency at a reasonable price-a wider range of digital assets are used as qualified collateral, decentralized banks, and currency creation to curb asset speculation.
Of course, an improved supervising and indicator systems are indispensable. Special attention should be paid to their distinctive business models, which allows itself to provide an industry standard and calculation basis for the incentive mechanism.
Another noteworthy event in last week we want to mention is, a working group composed of 25 virtual asset service providers (VASP) headquartered in the United States jointly released a white paper on compliance with the "Travel Rule" of the Financial Action Task Force (FATF). According to the white paper, a solution was building up to identify customer information and use peer-to-peer communication channels to transmit data. Specifically, it will be launched in phases with first phase of only US-based VASP being allowed to enter its network and extended to regions outside the United States in later phases.