Bats are a known harbor to a large variety of viruses. Humans rarely interact with bats directly (they are not a common delicacy or pet in China), but other wild animals, such as civets and pangolins, do. Seventeen years before the outbreak of COVID-19, a coronavirus already made the jump to humans, likely starting with a farmer in Guangdong province in Southern China.
In the case of SARS, it remained locally contained until a fishmonger from the Guangdong region was checked into a hospital in the province’s capital of Guangzhou on January 31, 2003. There, he infected 30 nurses and doctors.
Ten days later, China notified the WHO, but another ten days later, one of the infected doctors traveled to Hong Kong to attend a wedding ceremony. Within a day of his arrival, he felt sick and checked himself into a local hospital, where he died two weeks later.
Shortly after, other hotel guests checked themselves into hospitals in Vietnam, Canada and Singapore. Throughout March and April, SARS spread quickly in Hong Kong, infecting 1,700 people (80 percent of whom were infected directly or indirectly through the Guangzhou doctor), killing 300.
By May, Hong Kong’s number of newly infected cases dropped to the single digits, and by June the area was declared free of any infections. While some researchers infected themselves months later while handling the virus, the outbreak was declared contained in July 2003.
The SARS outbreak shaped Hong Kong forever. The two-week school closures remain vivid in the memory of all students; street markets were dramatically altered in its aftermath; bathrooms were remodelled and plumbing remade (over 300 people were infected in a single block of an apartment building as the virus spread through the pipes). Temperature scanners were installed at border crossings and fever clinics were set up, usually via a separate entrance to a hospital. Many employers, especially those servicing large numbers of customers, made masks available to employees.
2019: A New Virus
When Wuhan doctor Li Wenliang posted in a WeChat group for doctors on December 30, 2019, about SARS having returned, people in Hong Kong opened their ears wide and local media began reporting on it. When the Chinese CDC and the WHO declared in mid-January that there is no evidence this new virus could be transmitted from human to human, Hong Kong did not believe them. The local authorities confirmed their first case by January 23, 2020. On the same day, Wuhan was put under complete lockdown and the over 7 million people of Hong Kong knew the drill. They stocked up on masks, soap and hand sanitizer, cancelled their travel plans or returned from their trips to China. Blockchain meetups began to cancel their gatherings and venues closed their doors to talks and seminars.
Remembering the cover up by Chinese authorities around SARS in early 2003, residents assumed the worst. They were convinced the virus was already among them and every returnee from China was a potential carrier. With its unusually long incubation time and the possibilities of asymptomatic carriers, the “Wuhan Pneumonia,” as it was then referred to in Chinese and Hong Kongese media, was taken seriously.
Having only recently unionized themselves in response to the 2019 Hong Kong protests, concerned doctors and hospital staff began to strike for border closures. While the government initially rebuked such demands as “discriminatory,” the pressure from losing 40 percent of their medical staff during an emergency became too high; major land and sea crossings were closed and all those arriving had to put themselves into 14-day mandatory quarantine.
Even without any official orders and while authorities at the WHO and China CDC were still playing down the threat, local restaurants and streets became deserted and events were cancelled. The feared epidemic, however, did not materialize. One month after the first case was reported, and as the first cases were officially recovered, only 73 cases were known, most of which had been imported from China.
Moving Toward Greater Surveillance
As the disease began to spread in Europe, Hong Kongers let their guard down. They reappeared in malls and restaurants, congregated under the unusually clear skies in Hong Kong’s country parks and returned to their desks. Europe seemed far away.
Another month later, by March 25, the number of total cases had increased to 350; over 60 percent of cases were recorded just in the past ten days. Throughout March, Hong Kong authorities began to significantly restrict International travel. First, only arrivals from Italy, Korea and Hokkaido were instructed to be quarantined, then arrivals from parts of France and Germany, then the entire Schengen area, then U.S., Ireland and the U.K., finally the entire world.
As of now, non-residents are not allowed to enter or even transfer through Hong Kong airport. All ferry and cruise ship terminals have been shut. Those arriving from northern Italy are put into a supervised quarantine complex run by the government at a cost of about $25 per day, including board. They are not allowed to leave their room or receive visitors for 14 days.
Everyone else has to put themselves under quarantine at home or in a hotel. Other members of their household are advised not to leave their unit either. Those under quarantine have to wear a simple PVC armband, like the kind you receive at a festival or club. It is sealed and has a printed QR code.
The QR code contains a simple case number. It can be scanned using an app available on the Google Play and Apple App stores and connected to a phone number. It scans nearby Wi-Fi signals and uses their relative strength to determine if an individual has left their home. The “Stay Home Safe” app has been criticized for not working properly and is likely not very functional.
Most of the quarantined travellers are returning students and those who have been on short-term employment in Europe. Unlike in neighboring Taiwan, where those under a quarantine order are strictly surveilled and receive regular visits from the authorities. Hong Kong’s police are unable to follow up with everyone under quarantine. Instead, they are asking the public for help. Telegram channels exist where people can dox anyone violating their quarantine orders. A recently announced version of the wristband will connect to its holder’s smartphone via Bluetooth. If the connection is cut (for example, because the phone is left at home while the holder ventures out) the authorities are alerted.
Consequences of Isolation
Hong Kongers take SARS-CoV-2 seriously, and unlike authorities in Europe and America, the Hong Kong administration will work hard to completely eradicate the disease from the city, as it did during the SARS outbreak in 2003. They believe society cannot “coexist” with shutdowns for too long, and allowing COVID-19 to spread through society threatens modern civilization.
So far, chances seem good that the virus can be eradicated in the city without bringing the economy to a dangerous halt, with frequent temperature checks, voluntary self confinement at home, zero tolerance for leaving home while feeling unwell and facemasks for everyone. Other neighboring countries, such as Korea, Japan, Taiwan and Singapore seem to be on a similar trajectory.
More worrying for now remains the medium-term future. Will travel to Europe and the United States resume this year? With outbreaks so massive, lack of testing and no political will to entirely contain this, it seems unlikely Hong Kong authorities will want to risk a third or fourth wave of imported cases.
It’s entirely conceivable we will see an “Asia Free Health Zone,” a loose union of places that are COVID free, and have policies in places to keep it that way. Tourists and business travelers are able to freely move between these areas, while everyone outside is required to quarantine for 14 days. With testing becoming more reliable and available, maybe this period can be shortened to just five days, in which no daily test is allowed to return positive.
The disruptions of daily life have already far exceeded those of the traumatic SARS outbreak 17 years ago. School closures are scheduled to be six times longer and might be extended beyond that. Even when Hong Kong was hardest hit by SARS, flights remained scheduled.
Cryptocurrency conferences such as Blockchain Week, Token2047 and SPOT are cancelled throughout July, and there is significant uncertainty around whether they can be held in the fall or even in 2021. Hong Kong lives off its massive financial services, accounting and logistics industries. It relies on food and pharmaceutical imports and has close to no domestic industry of its own.
It has a highly skilled and young workforce, but political considerations have made it difficult in the past to reinvent the economy on a more sustainable path. While “virtual commodities” like bitcoin and ether remain unregulated and freely convertible, the cryptocurrency industry is straight-up unwelcome among the multinational banks and local regulators.
Being highly internationally connected, Hong Kong’s fate depends on the economies around it. The efforts to contain COVID-19 cannot be locally isolated but have to be internationally coordinated. Authorities have to produce reliable data and look beyond their own population when implementing policies. Given the rise of isolationist nationalism and tense cross-Pacific relations, all of this seems more difficult than ever.
This is an op ed contribution by Leo Weese. Opinions expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.
The post From SARS to COVID-19: Hong Kong’s Path to an Asia Free Health Zone appeared first on Bitcoin Magazine.
What does a positive Coinbase premium mean for Bitcoin’s price?
Bitcoin’s price action on Coinbase has stood the test of time, especially since the crypto-exchange’s user statistics have often highlighted institutional participation in the market. The current Bitcoin bull run is largely influenced by institutional demand and buying. By extension, price action on Coinbase and other metrics can be deemed to signal traders’ sentiment too.
In that regard, one key metric is the Coinbase premium. With Bitcoin’s price strictly rangebound under $50,000 at press time, the Coinbase premium has turned positive, based on data from CryptoQuant.
Since the Coinbase premium turned positive, a positive change in Bitcoin’s price in the short run can be projected. Here, it is worth mentioning that for a while, the same metric was in the negative.
Further, another metric that was looking extremely bullish at the time of writing was the Spent Output Profit Ratio.
Based on the SOPR chart from Glassnode, the bull run may make a comeback in phases. The highlighted regions in the attached chart signal the points where the bottom and top were reset. This happened in mid-January, the last week of January, and on 26 February 2021. For the same, there are a few signs to look out for and each would further support the Bitcoin narrative.
One of the top signs is consistently positive Coinbase premium. Other signs from miners include increased inflows from miners on top exchanges, with the same fueling selling pressure on Bitcoin. When selling pressure hits a peak, the price drops as it did from the $58,640- level.
The complete reset of the Bitcoin Futures funding rates is yet another sign. The funding rate was reset, based on the SOPR chart from CryptoQuant, with the same underlining that Bitcoin lows and tops had been reset too. It is common for traders to bet high on leverage, long credit, and consequently, short volume. However, the cycle is complete when the volume increases and the price of Bitcoin pushes the leverage even higher.
Finally, there are other metrics like the Grayscale Bitcoin premium that has turned negative and signaled a drop in institutional demand. What does this entail? That’s a tricky question to answer. What’s evident, however, is that the two metrics are offering contrasting views on Bitcoin’s price performance.
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While Washington dithers, Wyoming and other US states mine for crypto gold
The United States is divided politically these days into red states and blue states, and increasingly, it seems to be fracturing into cryptocurrency-friendly and crypto-wary locales, too. On Feb. 21, it was revealed that San Francisco-based Ripple Labs had registered as a Wyoming business. Wyoming is arguably the most blockchain and cryptocurrency-welcoming state in the United States.
Meanwhile, several days later, New York State’s attorney general announced a settlement of the office’s long-standing investigation into crypto trading platform Bitfinex for illegal activities. As a result, Bitfinex and affiliated Tether must pay $18.5 million for damages to the state of New York and submit to periodic reporting of their reserves.
Wyoming and New York — poles apart on the crypto regulatory spectrum — were both making industry headlines in the same week in other words. The irony wasn’t lost on Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission and now a senior fellow at Harvard University at Kennedy School, who told Cointelegraph:
“Federal regulation of crypto assets is like swiss cheese — full of holes — and that has meant a smorgasbord at the state level, with Wyoming actively luring crypto businesses and the New York attorney general bringing aggressive enforcement actions as we saw this week with Tether and Bitfinex.”
Whether this “smorgasbord” is a good thing is a matter of some debate. Crypto havens like Wyoming can be centers of innovation, pushing a potentially revolutionary technology further forward, as Wyoming’s recently elected U.S. Senator Cynthia Lummis emphasized this week in a Chamber of Digital Commerce panel discussion with Miami’s Mayor Francis Suarez, another crypto enthusiast.
A complex fabric
But it also leads to regulatory uncertainty that gives entrepreneurs a case of hypertension. As Stephen McKeon, an associate professor of finance at the University of Oregon, told Cointelegraph: “Our regulatory system is a complex fabric of multiple agencies at both the state and federal level.” He further emphasized that “they need to coordinate on the topic of crypto assets because this asset class doesn’t map cleanly to the existing regulatory structure.”
Asked if, from a business standpoint, Ripple and others were making a smart business move registering in crypto-warm states like Wyoming with a higher degree of regulatory certainty and freedom — as well as lower taxes — McKeon added: “Businesses strive to reduce regulatory uncertainty. If moving to Wyoming helps to achieve that objective, then it’s a smart move.”
Others could follow Ripple. Zachary Kelman, managing partner at Kelman Law, told Cointelegraph: “Many crypto projects fled New York after the introduction of the onerous BitLicense back in 2015. I expect more projects to relocate in Wyoming, as well as other crypto-friendly states like New Hampshire.”
Wyoming created a stir in 2019 when its legislature authorized the chartering of special purpose depository institutions, or SPDIs, that can receive both deposits and custody assets, including cryptocurrency. The state’s banking division itself acknowledged that “it is likely that many SPDIs will focus heavily on digital assets, such as virtual currencies, digital securities and utility tokens,” though they could also deal with traditional assets. SPDIs can’t make loans like traditional banks, however.
Kraken Bank was the first business to receive a Wyoming SPDI bank charter in September 2020, followed by Avanti Bank and Trust in October, and there are “three more [SPDIs] in the pipeline” said Lummis at the Chamber of Digital Commerce’s Feb. 25 event. Avanti founder and CEO Caitlin Long had earlier suggested that Wyoming’s SPDIs potentially were “a solution to the #BitLicense problem” faced by crypto companies because “New York law exempts national banks from the BitLicense.”
But even though the Wyoming SPDI’s are state-chartered institutions, not national banks, “federal law protects parity of national banks and state-chartered banks,” continued Long, and following that logic, she concluded that SPDIs represented “a passport into some 42 U.S. states without the need for additional state [crypto] licenses.”
An accident waiting to happen?
Not all are enthralled by Wyoming’s new special-purpose banks, though. The Bank Policy Institute suggested that Wyoming’s SPDIs could be an “accident waiting to happen.” The BPI noted in September that Kraken was “the first digital asset company in U.S. history to receive a bank charter recognized under federal and state law” but warned that its business model “is inherently unstable under stress” because the new bank is funded by uninsured, demandable retail deposits “and relies on a pool of assets such as corporate bonds, munis and longer-term Treasuries to fund redemptions under stress.”
David Kinitsky, CEO of Kraken Bank, in a conversation with Cointelegraph, said that he believes the BPI blog post “comes from a lobbyist group funded by, and working on behalf of, the world’s biggest banks” and rests “on a slew of faulty assumptions,” adding further:
“[It’s] comical and hypocritical that they think their fractional reserve model along with its total reliance on asset exposure and interest rate environment is somehow less risky than a full reserve custodian bank that won’t do any lending and has a diverse set of adjacent revenue streams.”
Others have opined that innovation centers like Wyoming were merely filling the void left by the federal government, which has yet to take a coherent stance vis-a-vis the burgeoning crypto market. Benjamin Sauter, a lawyer at Kobre & Kim LLP, told Cointelegraph: “Wyoming is showing that individual states can play a meaningful role in crafting a coherent legal framework for the crypto/blockchain industry — particularly when it comes to state taxation as well as commercial and some banking issues.”
By comparison, according to him, the U.S. federal government “hasn’t really made an effort to create such a framework, and this has led to a lot of regulatory inefficiencies and general confusion.”
Innovator or loophole?
So, what about the notion that Wyoming merely created a means for its new banks to lure firms and investors based in more regulated states like New York? Kelman told Cointelegraph on the matter: “Many institutions operate entities all over the world, not just the United States. New York has jurisdiction over New Yorkers — but not any company related to a company that has had operations there.”
“Wyoming can and is becoming a center for crypto business and innovation,” Kinitsky told Cointelegraph, adding: “Certainly, there are ready similar examples within financial services like the credit card industry in South Dakota and ILC banks in Utah….SPDI banks have similar frameworks for being able to operate across the country and indeed internationally.”
McKeon agreed that Wyoming was following the South Dakota playbook: “South Dakota created favorable legislation for banks around interest rates and fees in the 1980s and now has one of the highest concentrations of bank assets in the U.S.,” adding further:
“By creating an environment that allows crypto projects to operate with a higher degree of regulatory certainty and freedom, Wyoming is likely to attract similar relocation within crypto.”
Will others join in?
Of course, other states could follow Wyoming’s lead. Kelman said: “I also expect larger states, like Florida, to follow suit with more crypto-friendly guidance, especially after Miami Mayor Francis Suarez’s overtures to the crypto community.” However, he further stressed that “given Wyoming’s small size and relative obscurity, I don’t know if it will remain a haven for an entire industry in the way Delaware has been for incorporations and corporate governance.”
As reported, Mayor Suarez is looking to develop some of “the most progressive crypto laws” and proposing within his jurisdiction innovations like paying city workers’ wages in Bitcoin (BTC) and purchasing BTC for the municipality’s treasury. Senator Lummis applauded the mayor’s initiatives at the Chamber of Digital Commerce’s panel, inviting him to “look at Wyoming’s legislative framework as a template and then build on it” by developing new Bitcoin “components,” including a pension plan for Miami workers that includes Bitcoin — something Suarez is looking into.
Multiple innovative centers like Miami and Wyoming, among others, could advance technological progress generally, she suggested. Suarez, for his part, said: “One of the things that we want to do is imitate Wyoming’s very successful integration of crypto into their community.”
Meanwhile, Avanti’s Long remains an ardent booster for her state: “Why should crypto companies redomicile to Wyoming?” she asked rhetorically on Feb. 21 following the news that Ripple Labs had registered as a Wyoming limited liability company, adding:
“No state corp tax, no franchise tax, crypto exempt from property & sales tax, our commercial laws clarify crypto legal status, crypto-friendly banks opening soon, access to crypto-open gov/legislators/US senator — all laws open-source.”
Is Wyoming good for BTC adoption?
What exactly do these tech-friendly states and cities mean for cryptocurrency adoption? Sauter was cautiously optimistic: “It’s possible that Wyoming’s efforts will have some trickle-up effects, should the federal government ever get its act together.” He stated further that there is also a major risk as businesses may be “lulled into a false sense of security and potentially conflating Wyoming’s regime for compliance at the federal level.”
Kinitsky told Cointelegraph that the convergence between crypto and banking, as is happening in Wyoming, “portends an important step toward mainstream adoption,” while McKeon added that crypto users “are primarily concerned with access to products and features. Better products translate to increased adoption.” Therefore, if Wyoming-type legislation enables crypto projects “to provide new and desirable features by mitigating regulatory risk for the providers, then it will be a positive force for general public adoption.”
Many, though, still seem to be treading water until the federal government acts to provide some legislative/regulatory structure to the nascent blockchain and cryptocurrency industry. According to Sauter, “as great and encouraging Wyoming’s recent actions are, there is only so much one state can do.” Massad also told Cointelegraph:
“This regulatory confusion creates higher costs and uncertainty. There’s still plenty of money and talent in this country flowing into crypto innovation, but we need greater regulatory clarity to ensure investor protection, financial stability and responsible innovation.”
India: Are authorities really seizing crypto hardware wallets?
While the lack of regulations for cryptocurrencies has evolved into a problem in India, crypto-users in the country have not been discouraged yet, with many seeking ways to get on the same page as lawmakers. However, there is a very problematic lack of clarity among users, especially since such regulations (Or lack thereof) make compliance a very difficult job.
According to a recent post by Crypto Kanoon, a legal information portal for the country’s crypto-users on Twitter, Indian authorities have now turned their attention to crypto hardware wallets by making very deliberate attempts to seize them. The tweet in question read,
“Breaking: News of Crypto Hardware Wallets being ciezed by the Flag of India customs department is coming.”
While avenues to use cryptos have not been fully shut yet, their use has become increasingly difficult thanks to muddy rules. Given the fact that the bull run is in progress, India is seeing greater interest in crypto-investments. In light of the need to be in charge of one’s own cryptos, many new entrants to the crypto-market have been turning to crypto hardware wallets.
However, along with Crypto Kanoon, several prominent Indian crypto-influencers are also claiming that such purchases are being flagged by the Customs department of the country. For instance, Naimish Sanghvi, Founder of CoinCrunchIndia, shared the screenshot of a message shared by a “verified source.” It read,
Custom officials are not allowing imports of Crypto hardware wallets!
This was shared by a verified source! pic.twitter.com/fM0lh3shUO
— Naimish Sanghvi (@ThatNaimish) February 27, 2021
Here, it must be stressed that the veracity of this claim was still in question at press time, especially since no customers had actually come forward to claim anything of this sort. In fact, no official notification or circular from any government agency asserting a ban on Bitcoin wallet imports had been found either.
It is also worth noting that crypto hardware wallets continue to be available online, on Amazon, as well as on Etherbit. The latter, a popular reseller that has Ledger, Trezos, SafePal wallets in stock, has lately been noting shipping delays on account of a “sudden spike” in global demand for wallets and “rumors of crypto-ban in India.”
While everything is up in smoke right now, what is evident is that reactions from the crypto-community have been furious. Despite the fact that such reports are yet to be confirmed, many in the crypto-community believe that this once again highlights the antagonistic attitude of the government towards digital assets. With rumors of a crypto-ban in India swirling about, speculations such as these are unlikely to win the government any crypto-fans.
AMBCrypto has reached out to Crypto Kanoon, Etherbit, officials of the RBI, and some users for clarity on the issue and will update the story accordingly.
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