China Strikes Bitcoin, Drops Its Value 12%

A Bitcoin paper wallet with QR codes and a coin are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier/File Photo
A Bitcoin paper wallet with QR codes and a coin are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier/File Photo
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China Strikes Bitcoin, Drops Its Value 12%

A Bitcoin paper wallet with QR codes and a coin are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier/File Photo
A Bitcoin paper wallet with QR codes and a coin are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier/File Photo

China is heading towards banning the centralized trade of virtual currencies as well as venues and applications that use these currencies, namely Bitcoin. Following the leaked statements, Bitcoin plunged to a six-week low, below $12,000, before the price exceeded again the $12,000 by a little.

Bitcoin was traded at a rate above $14,000 on Monday before reports circulated that the Chinese government is planning to limit its trade. It lost between $16,000 and $18,000 on trade venues dropping more than 12 percent to a low of $10,969.15 on Tuesday, its lowest since early December

Both China and South Korea are considered one of the biggest trade markets for virtual currencies, and thus leaks and statements from these countries affect the currencies.

On Tuesday, Bloomberg reported unnamed sources saying that the Chinese government is planning to ban local access to platforms that trade with virtual currencies.

In the memo outlining details of discussions at a meeting of internet regulators and other policymakers last week, PBOC Vice Governor Pan Gongsheng said the government would continue to apply pressure to the virtual currency trade and prevent the buildup of risks in that market.

"Pseudo-financial innovations that have no relationship with the real economy should not be supported," he said.

National and local authorities should ban venues that provide centralized trading of virtual currencies, of which bitcoin is the biggest, Pan said. They also need to ban individuals or institutions that provide market-making activities, guarantees, or settlement services for centralized trading of the currencies, such as online "wallet" service providers, according to Bloomberg.

Authorities should also block domestic and foreign websites and close mobile apps that provide centralized virtual currency trading services to Chinese users, and sanction platforms that provide virtual currency payment services, according to Pan.

He proposed local governments use regulations around electricity prices, land use, tax and environmental protection to guide businesses involved in such activities "toward an orderly exit".

South Korea’s Justice Minister Park Sang-ki recently proposed a trading ban and the government has put other controls into place in the face of what some see as a “cryptocurrency mania” in the country.

However, many authorities are aiming to regulate these currencies rather than fully terminating its trade.

Member of the board of Germany's Bundesbank, Joachim Wuermeling suggested that any attempt to regulate cryptocurrencies would require international cooperation.

European Union states and legislators agreed in December 2017, on stricter rules to prevent money laundering and terrorism financing on exchange platforms for bitcoin and other virtual currencies.

But Wuermeling said national rules may struggle to contain a global phenomenon.

"Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation, because the regulatory power of nation-states is obviously limited," he concluded.



Qatar Threatened to Cut Gas Supplies to Europe

An LNG tanker passes boats along the coast of Singapore February 3, 2017. Picture taken February 3, 2017. REUTERS/Gloystein Henning/File Photo 
An LNG tanker passes boats along the coast of Singapore February 3, 2017. Picture taken February 3, 2017. REUTERS/Gloystein Henning/File Photo 
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Qatar Threatened to Cut Gas Supplies to Europe

An LNG tanker passes boats along the coast of Singapore February 3, 2017. Picture taken February 3, 2017. REUTERS/Gloystein Henning/File Photo 
An LNG tanker passes boats along the coast of Singapore February 3, 2017. Picture taken February 3, 2017. REUTERS/Gloystein Henning/File Photo 

Qatar has threatened to cut gas supplies to the European Union in response to the bloc's due diligence law on forced labor and environmental damage, a letter from Qatar to the Belgian government, seen by Reuters, showed.

Qatar is the world's third-largest exporter of liquefied natural gas (LNG), after the United States and Australia. It has provided between 12% and 14% of Europe's LNG since Russia's 2022 invasion of Ukraine.

In a letter to the Belgian government dated May 21, Qatari Energy Minister Saad al-Kaabi said the country was reacting to the EU's corporate sustainability due diligence directive (CSDDD), which requires larger companies operating in the EU to find and fix human rights and environmental issues in their supply chains.

“Put simply, if further changes are not made to CSDDD, the State of Qatar and QatarEnergy will have no choice but to seriously consider alternative markets outside of the EU for our LNG and other products, which offer a more stable and welcoming business environment,” said the letter.

A spokesperson for Belgium's representation to the EU declined to comment on the letter, which was first reported by German newspaper Welt am Sonntag.

The European Commission also received a letter from Qatar, dated May 13, a Commission spokesperson told Reuters, noting that EU lawmakers and countries are currently negotiating changes to the CSDDD.

“It is now for them to negotiate and adopt the substantive simplification changes proposed by the Commission,” the spokesperson said.

Brussels proposed changes to the CSDDD earlier this year to reduce its requirements - including by delaying its launch by a year, to mid-2028, and limiting the checks companies will have to make down their supply chains.

Companies that fail to comply could face fines of up to 5% of global turnover.

Qatar said the EU's changes had not gone far enough.

In the letter, Kaabi said Qatar was particularly concerned about the CSDDD's requirement for companies have a climate change transition plan aligned with preventing global warming exceeding 1.5 Celsius - the goal of the Paris Agreement.

“Neither the State of Qatar nor QatarEnergy have any plans to achieve net zero in the near future,” said the letter, which said the CSDDD undermined countries' right to set their own national contributions towards the Paris Agreement goals.

In an annex to the letter, also seen by Reuters, Qatar proposed removing the section of CSDDD which includes the requirement for climate transition plans.

Qatar is seeking to play a larger role in Asia and Europe as competition from the world's biggest supplier the United Sates increases.

Last December, Qatar’s Energy Minister told the Financial Times, “If the case is that I lose 5% of my generated revenue by going to Europe, I will not go to Europe. I’m not bluffing.”

Al-Kaabi said, “Five percent of generated revenue of QatarEnergy means 5% of generated revenue of the Qatar state. This is the people's money, so I cannot lose that kind of money - and nobody would accept losing that kind of money.”