South Korea prepares to ban crypto-currency trading
The South Korean government has announced plans to ban crypto-currency trading in a move that would outlaw transactions in one of the world’s largest and most exuberant markets. The proposed legislation, which would require approval from parliament and might not take effect for several months, follows recent raids by police and tax officials on Korea’s largest crypto-currency exchanges investigating alleged tax evasion. South Korea has been a driving force in the recent surge in crypto-currency prices and trading activity, accounting for about 5% of bitcoin and 10% of Ethereum global trading volumes.
European Commission proposes pan-EU fintech licences
The European Commission plans to eliminate administrative hurdles to the cross-border operation of crowdfunding sites and online peer-to-peer lending services by providing a form of pan-EU licence for certain fintech firms. The proposed licensing plans, which could be extended across the fintech sector, are part of the Commission’s efforts to bolster the EU’s financial technology industry in the face of competition from US and Asian firms.
US panel rejects Ant Financial acquisition of MoneyGram
China’s Ant Financial has dropped plans to acquire MoneyGram International after a US government panel rejected the $1.2bn deal citing national security risks. The proposed acquisition had been under scrutiny by the Committee on Foreign Investment in the United States, which expressed concern over MoneyGram data on US citizens being placed under the control of Alibaba-backed Ant, whose founder Jack Ma is seen as having close ties to the Beijing government. The deal is the latest in a string of planned Chinese acquisitions of US companies that have failed to clear CFIUS.
Wall Street Journal
China moves to wipe out bitcoin mining industry
Chinese authorities are taking aim at the country’s large crypto-currency mining industry after shutting down bitcoin exchanges and banning initial coin offerings last year. A multi-agency task force has instructed provincial governments to push companies to exit crypto-currency mining amid concern about excessive electricity consumption as well as financial risk. China currently accounts for about 75% of the world’s bitcoin output, with miners taking advantage of cheap electricity in regions rich in coal or hydroelectric power. Apparently pre-empting the move, Bitmain Technologies, a leading Chinese bitcoin mining firm, recently set up a subsidiary in Switzerland.
Wall Street Journal
Banks set to accelerate deployment of AI in 2018
The growing use of artificial intelligence in the financial sector is set to accelerate this year as groups increasingly deploy solutions for both front- and back-office processes. Around $11bn has been invested in AI research worldwide since 2010, a figure set to reach $47bn by 2020. Banks expect the technology to boost revenue by 3.4% and to cut costs by 3.9% on average over the next two years, according to research by UBS.