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A (short) history of the Winklevoss bitcoin ETF.

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Following a prolonged game of cat and mouse between Chinese bitcoin exchanges and the PBOC, its central bank and financial regulator, some clarity finally seems to be emerging.

Earlier this week, Zhou Xuedong, director of the PBOC's Business Administration unit, was reported by local media as saying the regulator would "adopt a forgiving attitude" toward domestic bitcoin exchanges for now, and establish an "observation period" to give them time to ensure they are compliant with financial regulations. Xuedong also said that eventually the PBOC would begin blacklisting exchanges that fail to correct any infringements.

The PBOC went on to specify the violations that would cause an exchange to be blacklisted. While some of these criteria relate to existing regulations, others are more bitcoin-specific. They include:

• Offering leverage and margin trades
• Artificially inflating trading volumes by not charging fees on bitcoin trades
• Violating anti-money laundering (AML) or foreign exchange laws
• Allowing customers to substitute bitcoin for fiat currency to purchase goods
• Tax evasion
• False advertising and participating in Ponzi schemes
• Offering credit, securities, and futures trading without an appropriate license

That the PBOC has started providing clarity on what constitutes an infringement is a first step toward a clearer regulatory environment. The next likely step will be the implementation of an official regulatory framework for bitcoin exchanges. We might even see the creation of a specific license for these players. 

Blockchain technology, which is best known for powering Bitcoin and other cryptocurrencies, is gaining steam among finance firms because of its potential to streamline processes and increase efficiency. The technology could cut costs by up to $20 billion annually by 2022, according to Santander.

That's because blockchain, which operates as a distributed ledger, has the ability to allow multiple parties to transfer and store sensitive information in a space that’s secure, permanent, anonymous, and easily accessible. That could simplify paper-heavy, expensive, or logistically complicated financial systems, like remittances and cross-border transfer, shareholder management and ownership exchange, and securities trading, to name a few. And outside of finance, governments and the music industry are investigating the technology’s potential to simplify record-keeping.

As a result, venture capital firms and financial institutions alike are pouring investment into finding, developing, and testing blockchain use cases. Over 50 major financial institutions are involved with collaborative blockchain startups, have begun researching the technology in-house, or have helped fund startups with products rooted in blockchain. 

Jaime Toplin, research associate for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on blockchain technology that explains how blockchain works, why it has the potential to provide a watershed moment for the financial industry, and the different ways it could be put into practice in the coming years.

Here are some key takeaways from the report:

• Spending on capital markets applications of blockchain is expected to grow at a 52% compound annual growth rate (CAGR) through 2019, according to Aite Group, to reach $400 million that year.
• Banks and major financial institutions are working both collaboratively and independently to develop blockchain tech. Over 50 major financial institutions are involved with collaborative blockchain startups, like R3 CEV or Chain. And many are investing in the technology on their own as well.
• Putting blockchain to use for real-world transactions is likely not that far off. If working groups' tests are successful, firms could be using it to transact real value as early as the end of this year and we could see widespread industry application within the next few years. 

In full, the report:

• Examines the funding increases that are pouring into blockchain
• Assesses why blockchain is becoming so popular and what factors are driving up increased research and development
• Explains in full how blockchain technology work and what assets make it valuable and vulnerable
• Identifies pain points in the financial industry and profiles how various firms are using blockchain to solve them
• Demonstrates the challenges to mainstream adoption and their potential solutions

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
2. Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of blockchain technology.

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Lawmakers in New Hampshire have advanced a measure that would exempt bitcoin traders in the state from money transmitter requirements.

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Bitcoin is making a big comeback. Early selling pushed the cryptocurrency down nearly 4% to $1120 a coin, but buying over the course of the morning has it on session highs, up 2.5% at $1194 as of 11:08 a.m. ET. 

Trade has been volatile over the past couple of sessions amid speculation surrounding the upcoming ETF ruling by the US Securities and Exchange Commission and more regulation out of China.  

Bitcoin rallied more than 30% from February 9 to March 3 as traders speculated the SEC will approve at least one of the three proposed bitcoin-focused exchange-traded funds by a March 11 deadline. Because that deadline falls on a Saturday, a decision could come on Monday, March 13. 

However, bitcoin has come under pressure the last few days.

On Tuesday, the cryptocurrency plunged $100 in a matter of minutes after a Bloomberg headline cited a People's Bank of China official as suggesting the recent bitcoin regulation wasn't temporary. It ended up retracing most of those losses before resuming its slide on Wednesday, plunging more than 5% after China's three largest exchanges said they would continue blocking withdrawals until granted approval to let them resume by regulators.

Bitcoin is up 25% so far in 2017 after gaining 120% in 2016. It has been the top performing currency in each of the last two years. 

SEE ALSO: We bought and sold bitcoin — here's how it works

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For the first time, a bitcoin mining pool has integrated a process called 'merge-mining' – a move aimed to bring smart contracts to the bitcoin blockchain.

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China's bitcoin users may face a further wait for services to be restored at the country's major exchange services.

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LONDON — The UK's economy is well-shaped to deal with Brexit and the real threats to economic stability come from elsewhere in the EU, according to prominent pro-Brexit economist Roger Bootle.

Bootle is managing director of economic research consultancy Capital Economics and known for his bullish stance on Brexit, describing himself as a "mega-optimist" with regards Britain's after leaving the EU.

"The economy is not that bad, but pessimism sells better than optimism," he told an audience at the Retail Week Live conference on Wednesday.

"You could be forgiven for thinking that the UK is going to hell in a handcart — well, it isn't. Things are actually looking pretty good," he said, adding that a raft of negative forecasts about Britain's prospects after the June vote had already been proven wrong and revised upwards.

The EU is "fading" in importance

The EU Single Market is the UK's largest export market, with around 44% of British exports in goods and services heading other countries in the EU in 2015.

However, Bootle said that trading figure has fallen consistently as trade with other countries has increased at a faster rate. That trend is set to continue as part of what he called Europe's "fading" influence. The European Commission itself predicts that "over the next ten to 15 years, 90% of world demand will be generated outside Europe."

He said that the single market was, in fact, a "disaster" for member countries' trading prospects.

"The EU is appallingly bad at doing trade deals — it has 28 member countries which all have to agree trade deals."

He said an incident last year in which the Belgian province of Wallonia almost derailed a major EU-Canada trade deal demonstrated that the inherent problems of arranging multi-lateral trade deals.

"I'm very confident the City will do well"

Bootle said he was confident that the City of London — which contains the bulk of Britain's vital financial services sector — would continue to thrive after Brexit, and said numerous threats from banks to relocate to continental Europe were overblown.

"I'm very confident that the City will do well," he said. "Various people — City bigwigs — trying to get some sort of handout suggested that they were all going to decamp to Paris or Frankfurt."

He said that moving to either destination — the two most commonly-touted post-Brexit alternatives for banks and financial services firms — was unfeasible.

"Decamp to Paris and pay François Hollande's taxes or face a [Marine Le Pen] National Front government? Or Frankfurt? More people work in financial services in London than live in Frankfurt," he said.

The pound

The value of the pound crashed after the Brexit vote and remains historically low against the dollar and Euro, which has begun to driven up inflation and squeeze British income levels.

Bootle said, however, that the pound's drop in value would make it competitive and boost exports.

"The pound is now at a competitive level. This is tremendously important. It is going to help Britain absorb the Brexit shock and it's going to help correct the balance of payments," he said.

The argument for the benefits of a weakening pound is that it would help shrink Britain's current account deficit as a result of strengthening exports, and because cheaper goods and services will be swapped for more expensive imports.

Bootle said that the biggest risks to British businesses come from the unpredictable leadership of US President Donald Trump and from problems in other European countries, including the potential election of far-right leaders Geert Wilders and Marine Le Pen in Holland and France respectively, as well as the debt-ridden economies of Italy and Greece.

"Should you all be worried? It’s going to be bumpy, but this is the Great Escape — we’re going to do extremely well," he said.

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