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From China to Singapore, Asian countries are increasingly uneasy with the rise of bitcoin

  • Regulators in Asia Pacific, including those in China, Australia and Singapore have become increasingly uneasy with the rise of cryptocurrencies
  • Japan, South Korea and Vietnam together accounted for 80 percent of bitcoin trading activity at the end of November, the Wall Street Journal reported
  • Bitcoin has surged this year, prompting worries of a bubble that could threaten financial stability in the region

Regulators in Asia Pacific have become increasingly uneasy with the rise of cryptocurrencies such as bitcoin.

The latest to sound a warning was the Bank of Japan Governor Haruhiko Kuroda, who called the surge in bitcoin prices "abnormal" at a media conference on Thursday. His comments echoed warnings made by his counterparts in major economies in the region, including Australia, South Korea and Singapore.

Their worries are not unfounded as Asia accounts for the bulk of trading in bitcoin, the largest cryptocurrency by value.

At the end of November, Japan, South Korea and Vietnam contributed 80 percent of bitcoin trading activity globally, the Wall Street Journal reported, citing data from research firm CryptoCompare.

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Sharp volatility in the price of cryptocurrencies is a particular area of concern for regulators.

Bitcoin's price has risen by more than 1,500 percent this year. Prices have declined from their peak, and there are fears that a deeper plunge may reverberate around financial markets.

Despite that, the race to introduce financial products linked to cryptocurrencies has intensified with the likes of Goldman Sachs planning to set up a digital currency trading desk, and CME Group and CBOE launching bitcoin futures contracts.

In contrast, Asia Pacific economies have been less welcoming of cryptocurrencies, with many authorities issuing some of the strongest warnings. CNBC provides an overview of what some regulators have said:

China — Wants full control

China was quick to clamp down on cryptocurrencies, with authorities banning bitcoin trading and initial coin offerings (ICO) in September. Its central bank, the People's Bank of China, said the unregulated market could pose major financial risks to the world's second-largest economy.

Despite the country's tough stance on privately-issued, decentralized virtual currencies, Beijing is actually in favor of the use of digital currencies. The PBOC said it was looking into issuing China's own sovereign digital currency and has set up a team to develop one.

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