Bitcoin Setback: New Central Bank Warning

India's biggest Bitcoin trading platform has suspended operations after the country's central bank warned of the risks of using virtual money.

Confirmation that BuySellBitCo.in had closed its platform came just over a week after the currency's value more than halved following a similar warning from China's central bank.

That move, on December 18, prompted China's biggest trading platform to ban Bitcoin deposits in yuan.

BuySellBitCo.in said on its website: "We are suspending buy and sell operations until we can outline a clearer framework with which to work," adding that the move was "to protect the interest of our customers".

Bitcoin, which can be stored either virtually or on a user's hard drive and offers a largely anonymous payment system, had begun gaining popularity in India.

The emergence of Bitcoin and other virtual currencies in India has come despite a traditional preference for assets backed by property and other tangible goods.

"There is no underlying or backing of any asset for virtual currencies and as such their value seems to be a matter of speculation," the central bank said in its December 24 advisory.

The "huge volatility in the value of virtual currencies has been noticed", it added.

The central bank stopped short of issuing a ban or any curbs on Bitcoin or other virtual currencies.

However, because the currencies were not authorised by any central bank or monetary authority there was no established recourse for customers in the case of problems, it said.

The People's Bank of China last week ordered financial institutions not to provide Bitcoin-related services and products and cautioned against its potential use in money-laundering.

At the last rate posted by BuySellBitCo.in, which was conducting about 12 million rupees worth of Bitcoin transactions monthly, one Bitcoin was selling for 48,039 rupees ($776), local media said.

The dollar worth of a Bitcoin rocketed to a $1,200 peak in early December but fell back sharply when China issued its guidance.

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Apple Strikes iPhone Deal With China Mobile

Apple has finally secured a deal to bring the iPhone to China Mobile, the world's biggest network, opening the door to a massive sales boost.

The state-owned network has more than 750 million subscribers.

The latest iPhone 5S and 5C will go on sale in the country from January 17, with analysts forecasting a sales surge of anywhere between 10 and 25 million over the next year.

China's granting of 4G licences earlier this month is thought to have helped the deal as the faster network is compatible with the iPhone.

In a statement promoting the deal, Apple and China Mobile said they were "excited" to finally be working together.

Apple CEO Tim Cook said: "Apple has enormous respect for China Mobile and we are excited to begin working together.

"China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world's largest network."

While popular around the world, the iPhone has faced tough competition in China from cheaper Android smartphones made by the likes of Samsung. Collectively, Android phones far outsell iPhone models.

Apple's cheaper 5C model, which was released earlier this year, was widely seen as an attempt to crack the Chinese market.

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Britain's Economy 'Could Overtake Germany'

Britain could overtake Germany to become Europe's largest economy, according to new research by an economic think-tank.

The Centre for Economics and Business Research (CEBR) predicts the UK's GDP will move ahead of France by 2018, then leapfrog Germany by 2030.

Douglas McWilliams, the CEBR's chief executive, told The Daily Telegraph that Britain could become even stronger outside the European Union.

"My instinct is that in the short-term, the impact of leaving the EU would undoubtedly be negative," he said.

"My suspicion is that over a 15-year period, it would probably be positive."

But the report says Britain is also forecast to fall behind the accelerating economies of India and Brazil.

The UK's GDP will grow from more than £1.59 trillion in 2013 to £2.6 trillion in 2028, compared with China, which is predicted to be in top position with a GDP of £20.5 trillion, ahead of the US with an estimated £19.7 trillion

Japan will fall from its steady position in the global league of third to fourth by 2028, overtaken by India and followed by Brazil, Germany and the UK.

A treasury spokesperson said Britain's "hard work is paying off" with positive growth and job creation, but warned there is still work to be done. 

The spokesperson said: "The economy is growing, the deficit is falling and jobs are being created and while this report is encouraging, the job is not yet done. So the government will go on taking the difficult decisions needed to secure a responsible recovery for all."

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Global Rough Diamond Trade Thrives In Antwerp

By Robert Nisbet, Europe Correspondent

In four unprepossessing streets in the centre of Antwerp, a secretive, centuries-old business is conducted behind bulletproof glass where a handshake and the Yiddish word "mazel" seals the deal.

The international diamond trade has been centred in the city since the 15th century. It is estimated that 85% of the global trade in rough diamonds passes through Antwerp, worth €43bn (£36bn) every year, equivalent to the GDP of Slovenia.

You would imagine that the crippling single currency crisis which continues to hold Europe in its grip would have had an icing effect on expensive ice, but business is booming, even as a quarter of Antwerp's young people struggle to find work.

£36m worth of stones bought or sold in Antwerp each year

We went to find out why, gaining access to one of the most secure buildings in the country guided by the entrepreneur Vashi Dominguez, who runs a successful UK-based diamond business from mine to retail.

It was fairly clear from the outset that news cameras aren't welcome in the diamond quarter. A police officer was dispatched to check our credentials after a CCTV camera filmed us on the pavement, while private security guards watched us warily from doorways.

After surrendering our passports, and with a prior appointment, we were allowed inside one 10-storey concrete building, in which trades valued at €1bn (£837,000) take place every month.

In a simple room with a series of substantial tables - and an even larger safe built into the wall - Vashi showed us three cut diamonds with a combined value of £2m as well as a scattering of smaller rough stones.

The four Cs still determine the price of a finished stone: cut, colour, clarity and carat (the weight, with a carat equivalent to one fifth of a gram), but the value of unusual, or "fancy" diamonds has been increasing dramatically at auction since the financial crisis began.

Vashi Dominguez: 'Prices are rising because demand is increasing'

Vashi explains that as government bonds and currencies have become less attractive to investors since the start of the crisis in 2008, they have turned to valuable commodities like gold and gems.

"Prices are rising because demand is increasing. That's due to the slowdown and more interest from buyers in the east like China and India as well as other developing countries such as Brazil," he explains.

"There's another factor too: there has been a lack of major discoveries of new mines and some mines that have been discovered can't be built into viable businesses because the extraction process is so costly."

A massive new mine is being prepared in Canada, and De Beers continues to chip new diamonds out of Jwaneng mine in Botswana, but prospectors are working hard globally to establish new deposits.

The location of the current mines and trade patterns shifting eastwards could threaten Antwerp's pre-eminence as a diamond hub. More business could switch to Dubai, which is closer to southern Africa.

That's reflected in a change in the religion and ethnicity of the traders: the diamond quarter has been conspicuously Jewish, but more Indians are moving into the business, and into the area.

At the moment, Antwerp is still keeping its nose ahead of those rival cities looking to snatch its diamond tiara. It's an irony that the booming gem trade is based in a continent where economies have lost their lustre.

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Cheques: Smartphone Scans Could Ensure Future

People will be able to use their smartphones to make a payment by cheque under new Government proposals.

There were plans to kill of cheques from 2018, but because of a public outcry the plans were scrapped and the Government now describes cheques as a "crucial" part of the British payments landscape.

However, it believes that by bringing them into the modern age, it could cut the length of time it takes to process a cheque payment from up to six days to two at the most.

Barclays plans to pilot technology early in the new year to allow people to scan cheques using a smartphone or tablet.

If successful, the full launch of cheque imaging will be rolled out on its mobile banking app for the second half of 2014. 

The Government wants to introduce legislation to speed up cheque payments and will consider making the process faster by allowing banks to use images rather than paper as they do now. The technology is already widely used in the US.

Using a smartphone would make the process much quicker

"Cheque imaging" does not require a hard copy of the cheque to be present at every stage of the paying-in process. That means that time which would have been spent transferring it between different banks and central clearing depots is cut as well as the overall cost.

Under the proposals, people without smartphones would be able to use similar technology at cashpoints or branches or, if they prefer, to continue paying in paper cheques as they do now.

Despite the increasing popularity of new technologies such as online banking and mobile payments, nearly £840bn of cheques were processed last year - accounting for 10% of all payments made by individuals.

Financial Secretary to the Treasury Sajid Javid said: "This Government is determined to create a banking sector that works for consumers and serves businesses.

"We want to see more innovation so that customers see the benefits of new technologies ... We want to take the very best of the current system and make it better.

"We want cheques to have a crucial role in the ongoing success of the UK."

The plans were welcomed by consumer campaigners and businesses.

John Allan, national chairman of the Federation of Small Businesses, said: "Speeding up cheque payments into business accounts is to be welcomed as many find the current process frustratingly slow.

"Using smartphones is an interesting idea which should allow firms in areas, particularly where bank branches are closing, to be able to accept cheques as a method of payment."

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Obama Signs Budget Deal And Defence Bill

President Barack Obama has signed a bipartisan budget bill and a defence bill, marking a modest end to a challenging year for the White House and Congress.

The president put his signature on both hard-fought bills while on holiday with his family in Hawaii.

The bill signing marks one of Mr Obama's last official acts in a year beset by a partial government shutdown, a near-default by the Treasury, a calamitous health care rollout and near-perpetual congressional gridlock.

The budget bill was not the grand bargain that Mr Obama and congressional Republicans had initially sought.

Mr Obama is in Hawaii with his family for the Christmas holiday

It does, however, end the cycle of fiscal brinkmanship for now and prevents another government shutdown for nearly two years.

The bill reduces automatic across-the-board spending cuts, restores about $63bn over two years and includes a projected $85bn in other savings.

The president also signed a comprehensive defence bill on Thursday that cracks down on sexual assault in the military.

Under the legislation, military commanders no longer will be permitted to overturn jury convictions for sexual assault.

Its signing caps a year-long campaign led by women in the Senate to address the scourge of rape and sexual assault in the US military.

The bill also gives military personnel a 1% pay raise and provides $552.1bn for the regular military budget, plus $80.7bn for the Afghanistan war and other overseas operations.

Mr Obama signed the two bills and several others in private, without reporters present, after an early-morning trip to the gym at the Marine Corps base near his vacation rental in Oahu.

With the last vestiges of 2013's legislative wrangling behind him, the president's attention turns now to major challenges and potential bright spots in the year ahead.

In late January, Mr Obama will give his fifth State of the Union address, setting his agenda for the final stretch before the 2014 midterm elections render him less able to focus Washington's attention on his own priorities.

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Barclays Fined £2.3m For 'Records Failure'

Barclays has been fined $3.75m (£2.3m) by a US regulator over an alleged decade-long failure to properly keep electronic records, emails and instant messages.

The Financial Industry Regulatory Authority (FINRA) said that from 2002 to April 2012, Barclays failed to preserve order data, trade confirmations, account records and other information in a format that prevented their alteration or erasure, known as "Write-Once, Read-Many" or "WORM."

It also said Barclays failed to properly retain attachments to some Bloomberg emails from May 2007 to May 2010, and failed to properly retain about 3.3 million Bloomberg instant messages from October 2008 to May 2010.

FINRA said that once Barclays' system encountered an attachment to an instant message that it had processed earlier on a given day, it would stop accepting instant messages for that day.

"Ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm's ability to meet its compliance obligations," FINRA enforcement chief Brad Bennett said in a statement.

Barclays did not admit or deny wrongdoing but agreed to a censure and the entry of FINRA's findings.

A spokeswoman for the British bank declined to comment.

Barclays - along with its major UK counterparts - has been no stranger to financial penalties over its past behaviour.

It was recently spared a penalty for its role in the widespread rigging of benchmark euro rates because it blew the whistle on what was happening but it was previously fined £290m by regulators following an earlier probe into the Libor rate-rigging scandal.

Barclays has set aside billions of pounds to cover the costs of settling the payment protection insurance mis-selling scandal while it is also subject to a separate probe by the Financial Conduct Authority and other world regulators into the alleged manipulation of foreign currency markets.

In November, the former regulator charged with boosting compliance at Barclays, Sir Hector Sants, quit his post as a result of a stress-related illness.

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Pound Hits Two-Year High Against Dollar

The pound has hit its highest level against the US dollar for nearly two-and-a-half years amid Britain's buoyant economic recovery.

Sterling rose to 1.65 dollars, a level not seen since August 2011, as strong economic figures continue to provide a boost and spur expectations that the Bank of England will move to raise interest rates earlier than expected.

A report from the Centre for Economics and Business Research (CEBR) on Thursday predicted the UK would become Europe's largest economy within two decades, overtaking France and Germany.

The UK recovery has been picking up pace in recent months and official figures saw growth data revised higher last week.

Figures correct at 16:06 GMT Friday December 27

The Office for National Statistics (ONS) said growth in 2012 was 0.3%, up from a previous estimate of 0.1%, while the figure for the first quarter of this year was revised up from 0.4% to 0.5% and for the second quarter from 0.7% to 0.8%.

A stronger pound is good news for tourists, as it boosts their spending power.

UK holidaymakers have up to 28% more spending money for their trips as a result of the pound's recent strength, according to a Post Office Travel Money survey.

It has also helped bring down UK inflation, by making it cheaper for Britain to import goods and services.

But the gains in sterling could provide a headache for manufacturers and exporters, as a stronger pound makes products more expensive for overseas buyers and therefore could dampen demand.

The Bank's Monetary Policy Committee recently warned that a significant increase in the pound's strength could pose risks to the recovery, while it could also dent the Government's aims to rebalance the economy towards manufacturing and exports.

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NatWest 'Hit By Fourth Online Banking Glitch'

NatWest has been hit by a cyberattack, leaving customers unable to access online accounts.

The bank's online banking service was disrupted after it was deliberately bombarded with internet traffic.   

Twitter users tweeted to say they could not access their bank accounts to pay bills or transfer money.

@TomGilchrist wrote: "Do other banks computer systems/services go down as much as NatWest? I assume not. Time to move banks I think."

@AleexReid tweeted: "Just joined Santander. Fed up with NatWest. Another computer failure tonight. #welldone."

A NatWest spokesperson said: "Due to a surge in internet traffic deliberately directed at the NatWest website, some of our customers experienced difficulties accessing our customer web sites this evening.

"This deliberate surge of traffic is commonly known as a distributed denial-of-service (DDoS) attack.

"We have taken the appropriate action to restore the affected web sites. At no time was there any risk to customers. We apologise for the inconvenience caused."

At the beginning of December all of RBS and NatWest's systems went down for three hours on one of the busiest shopping days of the year.

The group chief executive Ross McEwan described that glitch as "unacceptable" and added: "For decades, RBS failed to invest properly in its systems.

"We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on."

RBS and NatWest also came under fire in March after a "hardware fault" meant customers were unable to use their online accounts or withdraw cash for several hours.

A major computer issue in June last year saw payments go awry, wages appear to go missing and home purchases and holidays interrupted for several weeks, costing the group £175m in compensation.

This latest problem is the fourth time in 18 months RBS and NatWest customers have reported problems with the banks' services.

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Millions Stress About Finances 'Every Day'

By Poppy Trowbridge, Consumer Affairs Correspondent

In the UK, 18.1 million people feel stressed about their finances every day, according to new research seen by Sky News.

Financial worries are even greater than concerns over health, or even job security, the data from MoneySuperMarket shows.

In a poll of 2,005 British adults, 19% said it is their current financial situation which is the main cause of stress, and a further 17% say it is their future financial situation.

Only 13% say they are most stressed out by their health, and 11% by their job.

Clare Francis, editor-in-chief at MoneySupermarket, said: "Anxiety about money is on the rise for many adults.

"We've experienced a difficult economic climate in 2013, with the cost of living rising, interest rates remaining low, rents remaining high, and wages remaining the same.

"Unfortunately, I expect that the New Year will be just as tough."

The Organisation for Economic Co-operation and Development's recently upgraded their estimates for UK growth to 1.4% this year and 2.4% next year, higher than its previous 0.8% and 1.5% forecasts.

Despite this, nearly 75% of those surveyed believe their money stress will get worse next year.

According to the research, 52% of adults said they frequently or occasionally worry about the state of their finances, with women worrying more than men.

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