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Cryptocurrency regulation

Cryptocurrency regulation, Holytransaction

The cryptocurrency wave has destroyed the traditional schemes which used to regulate money and financial assets. Furthermore this new trending market has created great opportunities for participants, but it also carries significant risk.

Countries and government are trying to understand how they work and how they could be regulated in order to make this market safer. Generally we say “cryptocurrency”, but this market offers different kind of crypto which have been divided in coins, token security and token utility.

Government agencies made this division, but in some cases coins/tokens show several qualities which make labeling them difficult. In other cases, like in muslim countries, also religion can help make regulation and acceptance difficult.

This article was originally published on UpCounsel.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Jack

Bitcoin regulation: EU to oversee digital currencies

Bitcoin regulation in Europe is moving forward after the decision of EU to fund a new tool.
This initiative about digital currencies surveillance is backed by $5m in funding from the EU and it involves a few government agencies and academic researchers including Interpol, Interior Ministries from Spain and Austria, Finland’s National Bureau of Investigation, and University College London.

In an official statement, members explained that the idea came because of the recent events of ransomware attacks all arount the world.

At the same time, those involved in the project argue not to violate user privacy rights.

“The consortium will analyse legal and ethical requirements and define guidelines for storing and processing data, information, and knowledge involved in criminal investigations without compromising citizen privacy,” said Ross King, senior scientist for the Austrian Institute of Technology (AIT) that is one of the research institutions involved in this project.

That the EU would take this approach is not surprising as they previously pushed aggressively for greater control on cryptocurrency users back in 2016, with the European Parliament following suit earlier this year.

Read more about bitcoin regulation in Europe by clicking here.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Bitcoin Regulation might be pushed by Apple and PayPal

When the digital currency industry has Apple and PayPal as competitors, those two firms might be the reason for a Bitcoin regulation in the US.

Apple and PayPal joined a group together with Google, Amazon and Intuit in Washington in order to push for more reforms related to the financial system innovation. As we know, in fact, a core subject on their agenda is the creation of a federal money transmission license that would supplant the current state-by-state regime.

Also, last month Financial Innovation Now (FIN), the group that represents these five companies, sent a letter to the Senate Banking Committee proposing new recommendations that ask for the creation of a national money transmission requirement that would be managed by the Treasury Department.

“Consumer protection is a critical part of payments regulation, but it makes no sense for different states to regulate digital money differently from one state to another,” they explained.

The executive director of FIN, Brian Peters, said to CoinDesk the group is taking the money transmission problem very seriously and is looking for a legislative solution.

“This is a top priority for us. We’re proactive pushing for it and we are serious about legislating this.”

Bitcoin regulation benefits

FIN argues that it has no interest in supporting Bitcoin regulation or its industry, but it knows that the development of a transmitter issue is a common benefit.

“None of our priorities really actually delve into bitcoin or the other cryptocurrencies specifically. However, a lot of what we are pushing for does connect to the work many in that community are doing. The main reason we are pursuing it is because our companies have encountered a significant amount of friction and delay in the state-by-state money transmission licensing process. It’s the delay and the friction that’s really a hindrance to the ability to deliver products and services to the market in a way that is consistent with the pace of innovation in the modern economy.”

In addition to the costs to comply regulations, there are a few issues in states where government hasn’t still decide whether digital currencies should be considered as money or be exempted from regulation itself.

A federal licensing system would allow digital currency- related companies to elude state regimes and this could have an exponential growth effect on Bitcoin industry, as explained by the director of research at Coin Center, Peter Van Valkenburgh.

“For people in the US who want to build a business using these technologies, by far the biggest impediment they face is state-by-state transmission regulations. There’s pretty much no question about that. Anything that [FIN] is going to ask for – assuming it’s in line with a federal money transmission license – is exactly what our industry needs.”

So, having a federal option would provide a few benefits related, for example, to the cut of compliance costs for companies and new startups.

“For startups, it’s the biggest thing,” he said. “Right now, you can’t start your business unless you have millions to spend on compliance. And to get venture capital financing, you need to convince your venture capitalists that it’s OK that the majority of their funding is going to lawyers.”

While there have been a lot of efforts with the aim of creating a federal money transmission framework, they have fallen due to a lack of money, leadership, political clout, etc.

But, FIN shouldn’t face these problems, commented Carol Van Cleef, a digital currency attorney with BakerHostetler in Washington.

“I have long said that we’ll get a national money transmitter license when these companies come together. They’re the ones that have the resources necessary to launch the kind of legislative campaign that’s essential to get this through Congress. This kind of initiative requires money and lots of it, solid executive branch and congressional relationships and experience working legislative issues.”

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Bitcoin regulation in Europe: “it’s too early”

bitcoin regulation

During a recent event held by the European Parliament, members talked about new technologies including the Blockchain and Ethereum and Bitcoin Regulation.

According to them, the European Parliament will have to regulate and monitor the new tech but “it’s too early to intervene at this stage, because we as legislators don’t yet see sufficiently clearly to know what the main issues are going to be – so in order to not to stifle innovation, we don’t want it to be now.””, said MEP Jakob von Weizsäcker.

So, the EU wants just to monitor blockchain and smart contracts in order to allow developers doing their job.

Also, MEP Eva Kaili from Greece explained that regulation is necessary to protect citizens, but EU doesn’t want to suffocate innovations.

“[In] 2008 when the crisis started in the European Union, especially in my country [Greece], people lost trust in banks and in the politicians. I woundn’t blame them because we didn’t protect them and the reaction was that some young people that we don’t really know discover this technology that actually makes unnecessary to have banks, politicians and intermediaries. So the potential is there, but it is still under progress”.

Also, she continues by saying the following:

“Blockchain is not just bitcoin and bitcoin is not just blockckhain. We need to understand how to protect citizens because if we help them trust this technology, they will actually start to using it. I do believe that banks will outsource a lot of their services,” she said.

Bitcoin regulation to regain trust by citizens

“We’ll have to educate citizens on how to use it […] Hopefully, [bitcoin regulation] will come and we’re going to try to protect the technology and not to stop it. I know that usually politicians and banks don’t want to change and they want to keep control, but I think this technology is unstoppable and we have to give control back to the citizens and maybe this way we can regain some trust,” Kaili argues.

Watch the full conference video here.

 

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Bitcoin in Russia: regulation will take place in 2019

Russia’s Ministry of Communications (Minkomsvyaz) has revealed it is looking for legalizing Bitcoin in Russia and the blockchain technology by 2019.

The local news agency called TASS talks about a document about the Russia’s Digital Economy of the Russian Federation project, which lays out a timeframe for creating and passing the blockchain regulation.

The document quoted the following:

“bringing into effect regulatory acts governing the possible use of technology for decentralized registers and legal certificates.”

Back in March, prime minister Dmitry Medvedev instructed Minkomsvyaz and its counterpart Ministry of Economic Growth (Minekonomrazvitie) to “study to what extent Blockchain would be applicable to our system of government.”

During the last year, Bitcoin in Russia has solidified from a rhetoric point of view also because the Russian Central Bank decided not to ban digital currencies including Bitcoin and this news was useful to calm businesses and users’ after a few years of uncertainty when Russia stated it would ban cryptocurrencies within the country.

Then, back in April, 2017, Russia announced it would recognize Bitcoin by 2018, but monitoring each transaction.

Read more about Bitcoin in Russia here.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Bitcoin Japan Regulation: official recognized as method of payment

On April 1st, 2017, Bitcoin Japan regulation was officially announced as the digital currency is finally recognized as a method of payment.

This Bitcoin legal classification will set a boom in its adoption as retailers will be able to accept the most popular digital currency.

In 2016, Japanese officials ended the 8% consumption tax rate imposed on bitcoin purchasing on the digital currency exchanges.

This tax relief and the Bitcoin Japan regulation might help to foster confidence in the digital currency industry, where there are 4,200 merchants that accept bitcoin. This growth – merchants are quadrupled from 2015 – occurred in two years when Japan’s cabinet decided to recognize bitcoin and digital currencies as the equivalent of money, in March 2016.

Payment processor Coincheck estimated that 20,000 merchants will be started to accept bitcoin this year.

260,000 Bitcoin-accepting Retail Stores

According to the Asian magazine Nikkei, two Japanese retailing giants have started a few partnerships with bitcoin companies in order to accept bitcoin as a method of payment.

One of these is Recruit Lifestyle, the retail arm of conglomerate Recruit Holdings, that is partnering with Coincheck in order to introduce bitcoin payments.

Also, bitcoin will be soon included in AirRegi, a recruit-developed point-of-sale application that is used at 260,000 retail locations across the whole Japan.

Customers will be able to use tablets and smartphones for paying bills with their bitcoin wallet and Coincheck will convert the digital currency into yen in order to transfer the fiat funds to the shop.

Also, AirRegi is compatible with Alibaba’s Alipay app for payments. Bitcoin’s inclusion will be attractive for tourists who will be able to make payments in other countries without the burdens of foreign exchange.

Click here to more about Bitcoin in Japan. 

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Bitcoin Sweden regulation: the blockchain to record property deals

A new project for Bitcoin Sweden regulation has moved to its second phase. In fact, the Sweden’s land registry authority, the so- called Lantmäteriet, wants to use the distributed ledger tech with the main goal of recording property deals.

This project was conducted by the blockchain startup called ChromaWay and the consultancy group Kairos Future, that are also working in partnership with two banks: SBAB and Landshypotek.

Talking about the project’s potential, ChromaWay CEO Henrik Hjelte commented:

“It could be a great benefit for economic growth”.

Also, he said that Sweden is the ideal country to test a distributed ledger system for land titles, because trust in public authorities is higher than elsewhere and it could influence other countries to do the same in the next future.

Thanks to this system, a buyer and seller would open a contract where banks and the land registry can view the workflow of the deal, such as due dates for payments.

“In the blockchain confirmation of each step in the workflow is made with a hash, like the blockchain normally. Everyone has the same information and you can check it yourself,” said Magnus Kempe of Kairos Future.

Another use case for this project is the potential verification of an IOU issued by the bank to its property buyer.

“That part is going to be hidden for the others in the contract. You will only have the hash confirming from the bank that the IOU has been signed,” commented Kempe.

That said, SBAB Bank explaind it has no imminent plans to implement the blockchain:

“Our reason to participate in the project has not been to actually implement the solution in our current processes. But rather an opportunity for us to get a better understanding of the blockchain technology and how it might possibly fit in our future products/offerings.”

Bitcoin Sweden regulation: what is the EU doing?

Recently, the EU passed a directive that puts more weight behind digital signatures; a similar bill has been proposed in Arizona too.

Click here to read more about EU regulation related to bitcoin and blockchain.

A the moment, this land registry project is looking at new ways for working at this issue.

“Actually, the land registry today, they don’t receive much physical paper, they get PDFs of the contracts which are signed electronically so they don’t store the physical contracts. What we are thinking of is, you can actually sign the contract digitally in the blockchain to the land registry, they can award the land titles and then you can throw away the paper so you’re not dependent on the physical archive.”

 

According to ChromaWay’s Henrik Hjelte, the use of blockchain could be disruprive in order to manage ownership of property and improving transparency in real estate sales.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Blockchain regulation: Arizona recognizes it under state law

Another move has been made in Arizona in order to make Blockchain regulation more effective.

In fact, a legislature has creared a bill that would recognize the distributed ledger signature and smart contracts under state law.

At the moment the bill has been sent to the governor’s desk for a final approval.

As previously reported, this bill would make data tied to a blockchain “considered to be in an electronic format and to be an electronic record” in the US State of Arizona.

Also, the bill quotes specifically the Ethereum smart contracts, so there is a specific effort with the main goal of capturing new kinds of delivering information – the distributed ledger– under existing laws.

The bill explains:

“‘Smart contract’ means an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger.”

This bill was sent to sent to Governator Doug Ducey’s office on March 27th,  after clearing the Senate by a 28-1 vote on the 23rd.

Even if it’s not so clear if or when the governor will sign the bill, its support suggests that this measure will see the light soon.

A few members of the legislature’s lower chamber, in fact, approved this bill unanimously previously this year.

This Arizona bill is similar to a legislation passed and signed in Vermont last year. There, lawmakers proposed to allow data embedded on a blockchain to be used in a court of law.

Click here to read more about Blockchain regulation worldwide.

 

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Bitcoin exchange regulation in China

Soon a new bitcoin exchange regulation in China may be required to ensure know-your-customers (KYC) verifications.

According to an article published by Caixin, the People’s Bank of China issued a new paper for the Chinese exchanges on which it is looking for comments for the proposed regulation.

This move is part of a effort by the Chinese central bank in order to have a bitcoin exchange regulation and avoid money laundering and other financial crimes.

According to the official press release, this paper explains both a regulation related to the anti-money laundering (AML) issues and the creation of a customer identification system.

Bitcoin users will have to own an on-site certification if they want to deposit funds. To do se, they will have to present identification at the time of registration. Also, for clients who hold more than ¥50,000 (over $7,200) in volume, a remote video certification will be required to authenticate their own identity.

The document also contemplates that there must be a senior management team who controls AML procedures and reports dubious transactions.

This news come after the PBoC’s decision made back in January that indicates to intervene in the Chinese bitcoin market during this period of heavy bitcoin price volatility.

Since then, bitcoin exchanges started to implement several new policies, ending margin trading and freezing withdrawals for a few cryptocurrencies.

At the moment, while I’m writing this article, bitcoin Chinese exchange withdrawals are still frozen.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio

Bitcoin regulation is necessary for its success, said Bank of Canada

According to a recent paper published by Bank of Canada, researches explain that Bitcoin regulation is necessary for it to reach worldwide success.

A paper published this week, in fact, suggests that digital currencies like bitcoin won’t succeed in the long-term without any government support.

To write this research, experts examinated the viability of virtual currency, looking to previous examples of Canadian currency such as the so-called “Dominion” as a guide.

This is not the first time Bank of Canada is involved in blockchain and bitcoin-related projects.

A few months ago, in fact, we saw Bank of Canada involved in the so-called “Project Jasper” to develop a prototype system for issuing a bank-backed digital currency and a payment system using the technology.

While we are still waiting to know more details about Project Jasper, the just released paper explains a common thinking among central banks on the topic of cryptocurrencies: bitcoin and other private digital currencies need goverment support to succeed.

“We conclude that well designed and managed private digital currencies could circulate widely but only with appropriate government regulation to ensure their safety, soundness, and uniformity.”

Bank of Canada has already expressed its concern about digital currency, saying a few years ago that digital money popularity could reduce the effectiveness of monetary policy.

“A central bank can always get its digital currency into circulation, but its digital currency will not necessarily drive out existing private digital currencies,” wrote the authors of the paper.

Bitcoin regulation worldwide

From Poland to Denmark, from Switzerland and Japan, several countries all around the world are working on Bitcoin regulation projects.

Recently European Commission created also a task force to study and regulate digital currencies and the blockchain within the whole country.

Click here to read more about Bitcoin regulation in Europe and beyond.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Amelia Tomasicchio