Debt worries

Market observers have been pointing to the accumulation of China’s debt for some time now. Rines and Haley also talked about the risks that such a development entails for the country and on a global level:

„Eight years of expansive fiscal policy have pushed China into an enormous mountain of debt. China’s debt ratio is currently 225% (Debt/GDP). China owns corporate bonds with a default risk of 2.4tn US dollars.“

Rines also said „if the Brexit slows down the European economy, trade with China will also stall, which in turn would mean new debt for China“.

„That would be a shock not only to China but to the Bitcoin trader,“ Haley said

Chen Zhao, co-director of Brandywine Bitcoin trader Global says the political reactions were „quick and determined“. While some economists warn against China’s growing debt burden, Zhao says concerns about China’s debt and the risks associated with it are exaggerated and fuelled.

Zhao says that debt in developing countries arises primarily from the need to convert savings into investments. Since China has a very high savings rate, such leverage is inevitable, Zhao says.

Potential shift of the crypto trader

While legitimate efforts to resolve the crypto trader situation can lead to a fundamental change in policy, the Brexit could lead to a fundamental departure from the crypto trader globalization we have been living for 30 years.

If such a change were to occur, it would have a major impact on China, which has benefited enormously from globalisation to date.

Further headwinds in the big economy paired with growing uncertainty and a drift away from globalisation could also provide strong backwinds for the Bitcoin course in the future.


„Economically speaking and in view of the brexit, China has lost a strong supporter in the European free trade zone. Investments in the UK are now becoming less attractive for Chian. They granted the country access to the free trade zone. Probably some investments will now be put on hold.“

PwC senior manager: Bitcoin works as a means of payment

Bitcoin has the potential to shape completely new payment methods and methods. Roland Stadler, Senior Manager and Data & Analytics Specialist at PwC Switzerland, is certain of this. In an article on PwC’s website, he shows how crypto currencies work as means of payment, how utility and security tokens differ from each other and why not only the blockchain but also Bitcoin is relevant for the future.

Crypto currencies are a thorn in the side of many representatives of the traditional economy, whether states, central banks or traditional financial service providers. The technology behind the blockchain, on the other hand, is regarded by all these players as innovative and potentially profitable. It is precisely this argumentation that is often heard: Blockchain good, Bitcoin – goes like this. Apple co-founder Steve Wozniak was one of the few who turned the tables and claimed that the blockchain was developing into a bubble – while he was convinced of the Bitcoin.

Bitcoin news as universal means of payment, the remaining tokens rather not

Even Roland Stadler, Senior Manager of PricewaterhouseCoopers (PwC) in Switzerland, cannot understand why the Old Economy is courting the Blockchain and frowning on the Bitcoin news. In his report „Blockchain, but not Bitcoin. Really? the rhetorical question of whether the Bitcoin news didn’t deserve to be rated better.

It starts with a definition of the terms „crypto currencies“ and „digital assets“ – most crypto assets are not currencies. Only Bitcoin and a few other crypto currencies are actually used as means of payment and as a payment network. Bitcoin has been working without problems for almost 10 years, has never been hacked and – in contrast to many fiat currencies – is deflationary.

Most other digital assets can be divided into utility tokens and security tokens. Stadler describes utility tokens as fuel for a particular blockchain ecosystem. As such, he names, for example, Ether, which would be needed to run an application on the Ethereum platform. Security tokens, on the other hand, represent securities in digital form and are used almost exclusively for crowdfunding. Meanwhile, neither utility nor security tokens were suitable as universal means of payment.

Stadler: Blockchain, but not Bitcoin formula. Really?

So while you can trade and speculate with all listed crypto assets, only the true crypto currencies are suitable for actual use. Utility and security tokens, which he sees as „venture capital,“ Stadler, on the other hand, sees the effects of the blockchain hype. Only Bitcoin formula continues to work as a means of payment – and quite well. Range, speed and transaction costs of the Bitcoin formula are not challenged by any other financial network.

„Small to large amounts can be transferred worldwide within minutes. No other financial network is currently able to do this. A retailer can receive payments directly to his tablet or POS system without the help of a service provider. In international trade, where traditional payment transactions sometimes incur very high transaction fees, Bitcoin can bring a considerable cost advantage with fees in the centime range,“ says Bitcoin, the report says. The Lightning Network’s scaling solution also holds out a lot of hope.

The bottom line is that Stadler criticizes the promise „Blockchain, but not Bitcoin“ because he still does not see a blockchain application that is more suitable as a means of payment than Bitcoin. The development of smart contracts can have many effects in the future, but is still in its infancy. The current ICO hype, on the other hand, should be viewed with caution.

Ebay: Sale of crypto currencies without a license?

The online platform Ebay apparently offers unlicensed crypto currencies for sale, including unambiguous scams and coins whose offer prices are out of proportion to the current market rate. Those responsible seem to be aware of this problem and have taken steps, but it remains to be seen how effective they are.

Ebay, the world’s largest online marketplace, seems to have a massive problem with regulating the products offered on its platform. For example, crypto currencies are set as goods and offered for sale completely unchecked. This is done in various ways, for example by offering paper wallets or vouchers that can subsequently be exchanged for crypto currencies. In total, several such offers are made daily which clearly promise the purchase of crypto currencies via the Ebay platform.

This Bitcoin code is not only cumbersome and confusing, but could also prove problematic

In Germany, it is not permitted to conduct commercial financial services business without being in possession of a corresponding licence. A corresponding licence is issued by the Federal Financial Supervisory Authority (BaFin) and can cost a six-figure euro amount, depending on the scope of the financial services to be offered. If this license is missing, it is not permitted to sell financial products commercially. This constitutes a criminal offence under Section 54 of the German Banking Act (KWG):

Apart from the fact that the pure offering and selling of Bitcoin code crypto currencies is not permitted without a corresponding license, the offered products generally lack any substance. For example, various crypto currencies are offered at a price that far exceeds the current market value of the coin, as can be seen in the image section. The Ebays format also does not allow to take into account the hourly fluctuating price adjustments of the respective crypto currencies. In addition, it also happens that quite obvious scams and non-existent crypto currencies are offered for sale in order to take advantage of the ignorance of potential crypto users in a clearly fraudulent intention.

Finally, the question of Ebay’s role in this Bitcoin code story inevitably arises

Since these illegal and morally highly questionable offers are still left undisturbed, this suggests that the platform is at least finding it difficult to regulate the abuse of its own online marketplace for illegal Bitcoin code purposes. Important basic principles such as the know-your-customer approach (KYC) are violated in this way. It is also possible that the platform may be misused for Bitcoin code money laundering purposes.

Ebay provided evasive answers to the repeated questions of blockchain developer and BTC-ECHO reader Michael Padilla. It could be heard, for example, that the employees would not be able to check everything, that necessary filters had already been installed or that crypto currencies are currently simply very popular. However, Ebay does not seem to have found an effective antidote against the illegal trading of crypto currencies via its platform.