CENTRAL BANK OF FIJI CLAIMS CRYPTO IS ILLEGAL
The central bank of Fiji, a Pacific island state, has issued a public notice informing that cryptocurrencies and virtual assets like Bitcoin, Ethereum, and Tether are not considered as legal tender in the country. The Reserve Bank of Fiji said in a statement that it is illegal for anyone to buy or invest in cryptocurrency using funds held in Fiji.
Fiji’s crypto policy
The bank informed the public that as the RBF Act (1983) provides, the legal tender in Fiji is currency notes and coins issued or deemed to have been issued by the Reserve Bank of Fiji. The currency of Fiji has been the Fijian Dollar since 1969, and also from 1867 to 1873.
A violation of the central bank position on cryptocurrencies may be punishable under the RBF Act (1983) and the Exchange Control Act (1950). Not all Pacific Island countries officially use private cryptocurrencies or stablecoins, but Fiji, Palau, Solomon Islands and Vanuatu have been toying with the idea of central bank digital currencies (CBDCs). Cash is the main payment instrument for almost all Fijians in their daily transactions.
Central Bank Digital Currency (CBDC) exploration
According to the Reserve Bank of Fiji Governor Ariff Ali, some businesses promote cryptocurrency investment schemes in Fiji through different platforms, including social media. Ali emphasized that the central bank has not licensed or authorized anyone to provide cryptocurrency investments or trade in virtual assets in Fiji. The bank claims that this is why the public of Fiji is counseled not to get involved in cryptocurrency investing or trading schemes.
In 2023, it was revealed that over 40 countries had made substantial progress in the development of regulation and legislation for the crypto sector, therefore showing that the trend for wider cryptocurrency adoption was growing at the global level. According to PwC’s report for 2023, many countries have adopted new regulations and laws aimed at the cryptocurrency sector.
BLOOMBERG ANALYST MAKES SHOCKING PREDICTION ABOUT HONG KONG’S ETFS
Hong Kong’s Securities and Futures Commission (SFC) announced the issuance of conditional approvals to three asset managers to begin issuing spot Bitcoin and Ethereum exchange-traded funds (ETFs). However, Bloomberg ETF analyst Eric Balchunas has played down the excitement surrounding the recent approval of the spot BTC and ETH ETFs in Hong Kong.
Bloomberg analyst discusses the Hong Kong ETF market
According to Bloomberg analyst, the recent approval may not be as big of a deal as people are making it out to seem. In one of his recent posts on microblogging platform X, he discussed the idea flying around that the ETFs could enjoy about $25 billion in inflows. He also mentioned four reasons why crypto investors would want to limit what they are expecting from the recently approved investment vehicles.
He noted that he saw an estimation saying the ETFs could see $25 billion inflows but he thinks the case is otherwise. In his opinion, Balchunas said that the funds would be lucky to get $500 million in inflows.
Explaining the reasons behind his prediction, he noted that the ETF market is very small in Hong Kong compared to the United States. Balchunas also opined that the ETFs will not allow regular retail investors in China to access the products.
Limitations and challenges in the Hong Kong ETF market
The Bloomberg analyst explained that the Hong Kong ETF firms are smaller than the asset management firms in the United States. He cited BlackRock as an example, with the firm boasting about $10 trillion in assets under management. He explained that the United States spot Bitcoin ETFs boasts more assets than the entire Hong Kong ETF market.
The analyst also discussed the fees, noting that they would likely be set around the 1-2% mark compared to the US the charges are cheaper. Balchunas explained that the ecosystem in Hong Kong is fairly liquid, which will lead to the ETFs seeing wide spreads and premium discounts. In his takeaway, he pointed out that other countries cannot be compared to the United States market.
