Taiwan and Lebanon Join the Bitcoin Warning Chorus
There is still widespread uncertainty as to how governments across the world will respond to Bitcoin in 2014. While some are supportive of the cryptocurrency or at the very least claim that they will not interfere with it, other nations are not saying much apart from warning about the volatility of Bitcoin. Taiwan and Lebanon are two newcomers to the chorus, warning citizens about using the cryptocurrency.
It seems that there is a general negative sentiment from Asian governments, except for a few like Singapore and Indonesia. Now from both ends of Asia, Taiwan and Lebanon have finally broke their silence about Bitcoin and started the new year with warnings to local Bitcoin users. Their statements have not been significantly different from other nations but could send shock waves through the local Bitcoin community.
Taiwan’s New Year Warning
The Taiwanese stance does not come as a surprise to many. As part of the Republic of China, Taiwan was undoubtedly going to take a similar stand against Bitcoin as China has done in recent weeks. The Financial Supervisory Commission of the Republic of China and the Central Bank of China have issued a joint statement warning against the use of Bitcoin in Taiwan.
These organizations say that Bitcoin has not been issued by any monetary authority and therefore does not have any legal protection. Furthermore the cryptocurrency is volatile which has been seen in recent weeks when it reached an all time high of close to $1,200 and then fell to the $500 range shortly thereafter.
The writing was on the wall for Taiwanese Bitcoiners and while the authorities have not taken a definitive stance on Bitcoin, recent statements do not seem to bode well for its future in the country. However, Bitcoin has proven to be much more resilient than many give it credit, and some of the most pessimistic authorities have in recent times relented and allowed Bitcoiners to continue trading.
Caution About Bitcoin From Lebanon
There has not been much chatter from authorities in the Middle East about Bitcoin but Lebanon has finally broken the silence. The small nation on the East Mediterranean has warned of several risks and it was not surprising to find a terrorism warning included in the statement. Lebanon like many Middle Eastern countries have been plagued with terrorism issues of late.
The Bank of Lebanon issued its statement on December 19, 2013 outlining the risks associated with digital currencies in general and not specifically Bitcoin. Its warnings were not significantly different from that of other countries. The Lebanese authorities have pointed out that:
- Digital currency transactions cannot be reversed and there is no protection for the consumer.
- Transacting through unregulated networks leaves consumers open to losses as there are no guarantees in place.
- The prices of these digital currencies are extremely volatile and largely driven by speculation without any control by a central authority.
- The lack of regulatory framework means that the digital currencies can be used for criminal activities, money-laundering and terrorism.
While many may be quick to pass off the Lebanese warning as insignificant like India’s recent statements, it must be remembered that Lebanon has a vibrant economy with a diaspora extending across the world and with large numbers in the US and Europe. The impact of Lebanon’s statements on private citizens remains uncertain but financial institutions are essentially prohibited from having anything to do with digital currency.