China Bans Crypto OTCs
China’s war on crypto hit a new high yesterday, sending $BTC and $ETH to new lows. The People’s Bank of China (their version of our BSP) has instructed all Chinese banks and payment institutions to stop supporting crypto-related businesses, and “must not provide account opening, registration, and registration for related activities.” https://decrypt.co/74094/china-central-bank-calls-broader-crypto-crackdown
How is it different from similar bans in 2015 and 2017? It’s the first time China has ever mentioned OTC trading as one of the crypto trading activities they wanted to ban. Unlike a formal exchange business, OTC (“over-the-counter trading”) is a lot more difficult to detect because it can be executed privately between peers, but I imagine the banks would be looking at transaction size and volume as their first indicators of misbehavior.
The gist of the PBoC's stance hasn't changed ofc. But there are some subtle differences this time: 1. The mention of OTC. I'm not aware of the PBoC calling them out exactly in 2013 or 2017. Maybe I missed something. But USDT-to-yuan is now -2% on OTC compared to forex.NEW: PBoC orders Chinese banks to cut off accounts for crypto OTC merchants — reiterating 2017 banking ban (via @WolfieZhao) https://t.co/2MNFRQfJnL
The Block @TheBlock__Predictably, Twitter is now filled with HODL posts and diamond hand emojis. Microstrategy had just announced its latest purchase of 13,005 $BTC at an average price of $37,617, right before the news out of China crashed the price to its current $32,000 level. $MSTR’s new cost average for their entire trove is now $26,080 per bitcoin, meaning that the price has to drop another 20% before Saylor’s convictions will begin to be truly tested.
Over in El Salvador, Jack Mallers announced that their Strike wallet was going to drop support for USDT. Now that they had access to the country’s banking infrastructure, they would simply hold customer balances at the bank level. I have a couple of issues with this. First, it sounds like they’ve looped back around to a bank-dependent payment solution. Once you’ve plugged your wallet platform into the local banks, the need for any kind of cryptocurrency is eliminated because you could just manage your customer balances in a traditional database. Lightning network is fast but it’s not as fast as a PostgreSQL call. Second, there’s the question of whether the Strike team can pull off a nationwide integration that would bring together the country’s “top five banks and two biggest cashpoint distributors.” Presidential backing aside, banking infrastructure and policies are notoriously difficult to work with, in any country. https://www.coindesk.com/strike-usdt-tether-jack-mallers-el-salvador-bitcoin
PROMO TIME! Most of my readers probably only know me through my startup BloomX, and not through my artist alter-ego Cryptopop. I’ve been creating cryptoart for over 4 years now, and this Thursday June 24th at 3pm, I’m dropping my latest piece “T4N6” (pronounced tang) at the brand-new Binance NFT Marketplace. This audio-visual NFT is the craziest piece of art I’ve ever done, and it was painted and animated over a period of two months with musician Ian Magbanua. I liked our collab so much that I don’t think I’m ever going to drop another NFT without an original score. Ian’s music brought T4N6 to life in a way that I didn’t expect, and it inspired my first real experiments in procedural animation and audio visualization. Here’s a tiny sneak peek:
We can’t wait to share the full piece with all of you in just a few days! https://nft.binance.com
The NFTart scene in the Philippines is young but I’m constantly surprised by how many young artists are diving headlong into this new sub-section of the crypto space. The idea that you can create art that you love and offer it to a global audience is genuinely empowering. If you are an artist or a fan of the arts but don’t know anything about NFTs, check out this two-hour Q&A session I did a couple of months ago explaining the concept and how to get started.
Catch you all tomorrow folks! Please sign up at the www.bloomx.app wait list!