Cryptocurrency (Bitcoin)

As per Wikipedia A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.^[1][2][3] Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. Cryptocurrencies use decentralized control^[4] as opposed to centralized electronic money and central banking systems.^[5] The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.^[6]Also, there are several types of cryptocurrencies that generates in a different way and distributing them to the peers over network.^[7]

It can be understood in following in simple way by following statements

1.    It is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

2.    As of January 2018, there were over 1384 and growing digital currencies in existence. The most popular crypto currency is Bitcoin.

3.    "decentralized cryptocurrencies such as bitcoin now provide an outlet for personal wealth that is beyond restriction and confiscation

4.    Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network.

5.    Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part.

6.    The first Bitcoin specification and proof of concept was published in 2009 by an unknown individual under the pseudonym Satoshi Nakamoto who revealed little about himself and left the project in late 2010.

 The Bitcoin community has since grown exponentially. Satoshi's anonymity often raises unjustified concerns because of a misunderstanding of the open-source nature of Bitcoin. From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and enables a user to send and receive bitcoins.Behind the scenes, the Bitcoin network is sharing a massive public ledger called the "block chain".This ledger contains every transaction ever processed which enables a user's computer to verify the validity of each traBitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money.  Unlike bank accounts, bitcoin wallets are not insured by the FDIC. Many people new to Bitcoin are curious about how to get some.Bitcoin faucets, places where bitcoins are given away for free, have been a part of spreading Bitcoin since the earliest days. But one problem is running out of bitcoins to give! That is why we have figured out a sustainable way to give away free bitcoins with sponsors

Following exchanges are engaged in dealing with Bitcoin

Coinbase

Local bitcoin

Bitquick

Bit bargain

Coin corner

Bittylicious

Mobile Payments

Like with many online payment systems, Bitcoin users can pay for their coins anywhere they have Internet access. This means that purchasers never have to travel to a bank or a store to buy a product. However, unlike online payments made with U.S. bank accounts or credit cards, personal information is not necessary to complete any transaction.No one knows what will become of bitcoin. It is mostly unregulated, but that could change. Governments are concerned about taxation and their lack of control over the currency.

Indian scenario

Our finance minister has termed the bitcoin as illegal tender on 01-02-2018 budget speech

Blockchain and cryptocurrency committee of mobile and internet association in India headed by Ajeet Khurana is planning to submit a draft to create central repository of users that will help to maintain real time data of cryptocurrency transactions to identify users through Adhar card and PAN CARD.It will be submitted to Govt of India through economic affairs wing which is expected to submit its recommendations in march 2018.

BACC is also planning to develop a code of conduct for dealing in crypocurrency.

International scenario.

Virtual currencies such as bitcoins have shown a clear pricing bubble in recent days as per EU. CONSUMERS CAN LOOSE ALL THEIR MONEY said the EU. These currencies are highly risky and subject to extreme volatile in nature. This warning was published by European commission vice president Valdis Dombrovskis recently. They are arranging meeting of key persons soon in this regard.

Last week germony and france also requested G20 economic authorities to work out possible regulations for crypto currencies.

Bitcoin the well known cryptocurrency has shown rise of 1000% in 2017 but lost its half value so far in 2018.

My superannuation

Dear Readers
I am approaching 60 years. On 30th Jan 2018 I will celebrate 60th birth day. On the very next day I will be retiring from the post of chief Manager from Bank of Baroda.
I could not spare much time for blogging in recent days due to engagements as required by my employer.
I will get enough time for blogs now.

(V P Mishra)

“Frame The Basel-III liquidity standards -RBI

The Reserve Bank of India has mandated banks to frame a liquidity risk management policy and put in place funding strategies, prudential limits and assessment of liquidity risks under Basel-III to ensure there is no disruption in daily operations of banks.

In the final guidelines on liquidity risk management issued on Wednesday, RBI asked banks to monitor liquidity frequently and set a liquidity risk tolerance level.

RBI had issued draft guidelines of liquidity risk management in February and had asked for feedback. “The Basel-III liquidity standards are currently subject to an observation period/revision by the BCBS with a view to addressing any unintended consequences that the standard may have for financial market, credit extension and economic growth. Therefore, the final guidelines on Basel-III liquidity framework will be issued once BCBS revises the framework,” RBI said.

RBI has asked banks to disclose their liquidity information on a regular basis to enable market participants make sound judgements. RBI has also prescribed method to calculate liquidity indicators and monitor liquidity position but banks can use their own calculations as well. “Banks should endeavor to develop a process to quantify liquidity costs and benefits so that these same may be incorporated in the internal product pricing, performance measurement and new product approval process for all material business lines,” RBI said.

"CHINA'S ECONOMIC GROWTH" A BIRD'S EYEVIEW

Since the initiation of economic reforms and trade liberalization 30 years ago, China has been one of the world’s fastest-growing economies and has emerged as a major economic and trade power. China’s rapid economic growth has sharply improved Chinese living standards and helped raise hundreds of millions of people out of extreme poverty. Trade and foreign investment flows have been major factors in China’s booming economy. In 2008 China, was the world’s second largest
merchandise exporter and third largest importer. Over half of China’s trade is conducted by foreign-invested firms in China. In 2008, foreign direct investment (FDI) in China totaled $92 billion, making it the destination for FDI among developing economies. The combination of large trade surpluses, FDI flows, and large-scale purchases of foreign currency (especially dollars) has helped make

China the world’s largest holder of foreign exchange reserves at $2.3 trillion.
The global economic crisis began to impact China’s economy in late 2008. After growing by 13% in 2007, China’s real GDP slowed to 9.0% in 2008 and to 7.1% in the first half of 2009 (year-onyear basis). China’s trade and inflows of FDI diminished sharply, and millions of workers reportedly lost their jobs. The Chinese government has sought to boost the economy by implementing a $586 billion economic stimulus package (largely aimed at infrastructure projects), establishing easy money policies to boost banking lending, and providing assistance to various industries. Such policies have helped stabilize China’s economy; real GDP is expected to
grow by over 8% in 2009—far higher than the expected growth of any other major economy.

BASEL- III ON BANKING SUPERVISION

The Basel Committee for Banking Supervision and the Financial Stability Board released two reports on the economic impact of BASEL 3, a new set
of more stringent rules for banks' capital and liquidity. Fending off
complaints from the banks that tighter standards will stifle lending,
the reports suggested that the long-term effects of the measures will
be clearly positive, since they will make financial crises less likely.
The final measures will be presented in November at the G20 summit in
South Korea
The Institute of International Finance, a lobbying group, reckons the proposed “Basel 3” rules might knock 3% off the absolute level of rich-world GDP by 2015, a scary result. A study by the French Banking Federation concluded that the long-term level of GDP would be 6% lower in the euro area.
Basel club of bank regulators, which released detailed new analysis on August 18th. It reckons its new rules will boost the economy in the long run and only slightly dent it in the short run. Stephen Cecchetti, its chief economic adviser, says there were “scores” of economists working on the project. The aim, he says, was “to do a thorough job, with the best technology and using the best people in the world at t

Bank of England says Britain seeing signs of improving credit conditions

There are tentative signs that credit conditions for some British businesses and households may be starting to improve, a Bank of England report suggested yesterday.
latest credit conditions survey found that lending to the corporate sector had increased in the second quarter and lenders expected levels to rise again in the coming three months.
The availability of secured credit to households over the same period also increased, and was expected to rise further in the third quarter. The Bank said the increase in lending in both areas was driven by the improved cost and availability of funds.

"While concerns about the economic outlook had continued to bear down on credit availability, the impact had been smaller than in previous surveys," the report added.
However, despite the rise in credit available to the corporate sector, it did not increase as much as lenders had expected and the commercial property sector in particular experienced a "significant reduction" in credit availability.

US Federal Reserve says increased banking competition has led to more lending

The latest lending survey from the US Federal Reserve has shown the first slackening in lending conditions for smaller American companies since late 2006 as competition between banks increases.
While small and medium-sized British business still complain of a lack of new credit from UK banks, US lenders have begun easing standards and reducing pricing for the first time in nearly four years.
According to the Fed's report, which surveys loan officers at 80 banks, the main reason for the change has been an increase in competition for business this year. Related Articles
The findings add weight to the argument that increasing competition in the banking industry would help improve the flow of credit to British businesses.