It’s stupid to buy Bitcoin from tobacco stores, says French regulator

The central bank of France and its local financial markets regulator, Autorité des marchés financiers (AMF), are not particularly fond of the prospect of having thousands of tobacco stores sell Bitcoin and Ethereum coupons to citizens.

The government agency has issued a notice to warn citizens against buying cryptocurrency coupons, reminding them that cryptocurrencies are often unregulated and, generally, not well-suited for uninformed investors.

“[In light of recent announcements to offer cryptocurrency coupons in tobacco stores,] the AMF, the Bank of France, and the French Prudential Supervision and Resolution Authority warn that the acts of purchasing, selling, and investing in Bitcoin are currently carried out outside any regulated market,” the statement reads.

The AMF also took a moment to remind consumers that – since cryptocurrencies are digital assets – it makes little sense to use a coupon to purchase Bitcoin or Ethereum.

“ Bitcoin is a type of asset, sometimes referred to as virtual ‘currencies’ or ‘cryptocurrencies,’ which currently exists in the world,” the AMF further wrote. “It is exchanged online, and is not directly linked to a physical coin or a bill. It does not benefit from a legal tender, unlike the currencies issued by central banks.”

The AMF is correct – and indeed, each coupon will also include a 7-percent commission as part of the price. Instead of buying a coupon, anyone can obtain Bitcoin or Ethereum from a specialized cryptocurrency exchange desk. Yes, you will still pay a small fee, but it will be much less than 7 percent.

The AMF also had some reservations about the legitimacy of the company responsible for handling the coupons, KEPLERK.

“[The distribution of the coupons will be handled] by a public limited company – PAYSAFEBIT SASU with a capital of €50,000, using the trade name KEPLERK – which does not have any authorization or approval by a French or foreign authority, and is not likely to provide any guarantee to the customer base,” the statement insists.

Bitcoin in tobacco stores

For those out of the loop, last week the French confederation of tobacconists unveiled plans to offer cryptocurrency coupons in 3,000 to 4,000 tobacco across the country, starting from next year.

Although initial report suggested the deal was sanctioned by the Bank of France, the bank later issued a statement to deny such claims .

With the AMF denouncing the project too, it will be interesting to see whether the French confederation of tobacconists reconsiders its plans.

Former Federal Reserve chair says bank issued digital currencies are pointless

The former chairman of the US Federal Reserve says there’s no point to central bank digital currencies (CBDC).

Speaking at Chinese finance magazine Caijing’s annual conference today in reference to CBDCs, the former chairman Alan Greenspan said: “There’s no point for them to do it,” CNBC reports .

Greenspan said that national currencies are backed by all the financial resources of a nation, also known as sovereign credit, and central bodies won’t ever be able to match that. “The fundamental sovereign credit of the United States is far in excess of anything Facebook can imagine,” Greenspan added.

It’s a little confusing that Greenspan is talking about central bank digital currencies but then referencing Facebook, which is not a central bank.

The bigger issue

There are a few important distinctions to make here.

Firstly, central bank digital currencies could be one of two things. It could be a digital representation of a fiat currency, say the US dollar which is convertible for cash and fiat. Or it could be a bank’s own coin, say ING coin, or ABN Amro tokens for example, which can only be used with that bank.

Secondly, Facebook’s supposed ‘cryptocurrency‘ project Libra is not the same as either of the two previous types of digital currency. Based on current reports, Libra will be a multi-asset fiat backed stablecoin of sorts .

The news comes after Dutch bank ING was joined by IBM in speculating that central bank digital currencies are on their way, and will become a part of our financial future.

In any case, if Greenspan is using the phrase “central bank digital currency” to refer to any centrally backed currency project, then he might have a point.

Online banking has given us the virtualization of our fiat money, and lets us transact and send money to family and friends with ease. Cryptocurrencies, like Bitcoin, give us an alternative censorship resistance exchange of value.

Forgive me, but I’m with Greenspan on this one, I don’t see the point in central bank digital currencies. For the most part, they just seem like a way to end the use of physical cash and monitor our transaction habits more so than they already do.

Japan’s BitFlyer Bitcoin exchange lands in Europe

Tokyo-based Bitcoin exchange BitFlyer has kicked off operations in Europe , after having secured the necessary Payment Institution license to run its service across the EU.

The exchange launched in the US last November , and claims that more than $250 billion in virtual currency was traded on its platform in 2017. According to Financial Times , it facilitates about 20-30 percent of all Bitcoin trades globally.

With that, BitFlyer claims that it’s now the only licensed exchange to allow cross-border Bitcoin trading between Europe and Japan, among the largest markets for the virtual currency in the world.

To start, it’ll only allow trading of Bitcoin/Euro pairs and will initially target professional high-volume traders; plans to support other currencies like Ethereum and Litecoin, as well as more fiat currencies, are in the works for the coming months.

The news follows speculation over whether South Korea will close domestic cryptocurrency exchanges ; at present, the government is having those businesses’ offices raided to investigate alleged tax evasion and is considering shutting down those are aren’t compliant with local laws. Meanwhile, China is said to be planning to block access from within its borders to foreign exchanges , after already having banned domestic exchanges last year. Both moves will likely have drastic effects on the value of Bitcoin, so brace yourself for a flood of FUD over the coming days and weeks.