Welcome to the third instalment of our Weekly Financial News Digest series. This series aims to inform you about the past week’s financial news with a special emphasis on bitcoin. As always links to the sources are provided for readers who would like a more in depth look at the covered events.
This week’s financial news digest covers the Puerto Rican default, Facebooks new patent and Tokyo’s District Court ruling on bitcoin. Please check out the previous edition of the Weekly Financial News Digest in case you missed it. Before we get going however I would encourage you to have a look at Ian Lee giving a seriously impressive talk on “Why Bitcoin Will Change Everything”
1. Greek bank shares plummet 30% on monday
As markets reopened for the first time since the bailout disaster last month, the stocks of Greece’s biggest lenders, such as Eurobank and Piraeus, plummeted 30%.
The downward trajectory was only halted by the daily limit, a stipulation which aims to regulate the maximum decrease stocks may suffer during one trading day. The red numbers continued throughout the week for the banks.
This is further devastating news for the Greek economy which is labouring under a 25.6% unemployment rate and harsh repayment terms from the European Central Bank, which is currently keeping the country afloat.
Capital controls imposed to ensure a minimum level of liquidity, mean that Greeks are limited to withdrawing a measly $60 from ATMs.
Consequently, Greeks have been desperate to find alternative stores of value, including bitcoin. Bitcoin startups like All4btc, Bitwala and Bitbond have been used to transfer, purchase and invest bitcoins, allowing Greeks to move funds around.
2. Rise of bitcoin trading in China
The reported deterioration of the chinese stock market has strengthened bitcoins’ position in recent weeks. OKCoin, china’s largest exchange, saw bitcoin trading for US$380 throughout the week.
Huobi, another large chinese exchange, saw prices climb as high as US$350. In the wake of golds’ timely collapse, redditors are asking themselves if bitcoin is replacing gold as the new safe haven.
A sentiment echoed by this excellent video
With Goldman Sachs suggesting that 80% of bitcoin trading volume is carried out in renminbi, this latest development is testament to the cryptocurrencies strong standing in China.
Consequently, Cointelegraph’s George Samman has suggested that “this could be the beginning of the return of speculative Chinese money back into the bitcoin market.”
3. Puerto Rico defaults on its debt
In other financial news, this week saw Puerto Rico default on its $72 billion debt.
The unincorporated U.S. territory failed to service its debt on Aug. 1, paying only $628,000 of the $58 million payment which was due.
Standard & Poor, McGraw Hills’ financial division, said the technical default presages other possible defaults as liquidity becomes further constrained impeding the territory’s ability to access vital financing.
Puerto Rico’s unemployment rate is above 12 percent and public services have suffered as the government cuts back.
These latest developments represent the nadir of a 10 year downward spiral which was triggered by the U.S. government weakening the local manufacturing sector.
We will see if this downturn heralds the emergence of bitcoin in the region.
4. Bitcoin not subject to ownership – Tokyo court
In a ruling against a plaintiff, Tokyo’s District Court judged that bitcoins lost in the Mt Gox collapse cannot be claimed.
Judge Kurachi reasoned that “due to their intangible nature and reliance on third parties, bitcoins cannot be covered under existing law.”
5. China home to four of the five worlds biggest banks
In a new ranking of the world’s biggest banks, publsihed by SNL Financial, Chinese institutions have grabbed four out of five of the top positions.
The top spot was secured by Industrial & Commercial Bank of China which holds assets equal in value to Britain’s annual output – $3.5 trillion.
6. Facebook patents tech to enable online credit ratings
Our final financial news involves the social media giant Facebook.
In a move that has the potential to disrupt the world of finance, the Silicon Valley behemoth has patented technology which would enable lenders to determine the creditworthiness of potential borrowers.
Specifically, the new patent aggregates the credit scores of a potential borrowers’ Facebook friends in order ascertain the probable creditworthiness of the borrower.
Opening up to the credit-related opportunities at their disposal is a smart move, as the wealth of data Facebook has amassed is a potent tool to judge creditworthiness.
Bitbond has led the way in using the Social Media giant’s data to analyse a borrowers creditworthiness, utilising it as a significant criteria throughout the loan application.
You’re All Set On Financial News!
Thanks for reading the third edition of the Weekly Financial News Digest. For any neglected topics, financial news stories, or suggestions, please message me @grundy_10. If you have any other questions, would like to find out more about Bitcoin, or want to take out a loan, please visit Bitbond.com
Worth checking out: Techcrunch Bitcoin podcast
and the latest Let’s talk bitcoin podcast
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