France calls for G20 bitcoin debate

France calls for G20 bitcoin debate

Bruno Le Maire, the French financial minister, wants the G20 to look at the risk of speculation in the cryptocurrency as it continues to make inroads into the mainstream financial system Bitcoin could be on the agenda of the next meeting of the world’s 20 largest economies after France’s finance minister said the explosive growth of the crypto-currency should be discussed.

Bruno Le Maire told French media that he would ask for the April G20 meeting in Argentina to look at the “risk of speculation” in bitcoin as it continues to make inroads into the mainstream financial system. “We need to consider and examine this and see how . . . with all the other G20 members we can regulate bitcoin,” Mr Le Maire said.

The French minister’s warning was echoed by Axel Weber, chairman of UBS bank and former head of the Bundesbank, who said during an interview that “bitcoin is not money”. He urged regulators to respond to the increased interest in digital currencies. Bitcoin has been heralded by its supporters as an innovation allowing users to transact without using the established banking system. The total stock of the virtual currency is valued at more than $300 billion from less than $20 billion earlier this year after a rapid rise in its price in recent months. The calls for examination of its dangers came as bitcoin futures began trading on Sunday evening on a second of the world’s largest financial futures exchanges.

Futures contracts enable investors to speculate on the price of an asset in the future, most often over one, two and three-month periods. Bitcoin futures launched on the Chicago Mercantile Exchange (CME), the world’s largest, to a muted reaction, with contracts opening at $20,650 only to drop 6 per cent within half an hour. By yesterday afternoon, only 751 January futures contracts worth a notional $70 million had traded in more than 12 hours of trading, compared with about 4,000 contracts worth just over $50 million during last week’s launch on the Chicago Board Options Exchange. CME bitcoin futures began trading at 11pm London time on Sunday evening.

They are settled based on a daily reference rate that is calculated from several digital currency exchanges and published daily at 4pm London time. The bitcoin futures price for the January contract on the CME settled yesterday at $18,500, down $600

Harry Wilson y Martin Strydom

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