The eyes of the crypto world will be on the upcoming G20 meeting of finance ministers and central canap governors, taking place ter Buenos Aires on the Nineteen and 20 March 2018. Governments and regulators around the world are battling to keep up with the latest surge ter rente ter blockchain and cryptocurrencies. Approaches range from those that are supportive, those taking a wait and see treatment and those that want to shut things down.
A big week ahead for the crypto markets
Spil wij ramp up to next week’s meeting we’re eyeing a number of statements te the press from G20 governments. Japan is reportedly programma to use a G20 meeting next week to call for combined regulatory efforts to combat the use of cryptocurrencies te money laundering. Meantime the financial authorities of Korea are potentially preparing a project to permit initial coin offerings (ICOs), for domestic investors, to advance blockchain-based technologies, according to sources familiar with the kwestie.
With the uitzicht of blockchain and crypto tech and regulation taking centre stage at an significant G20 meeting it is clear that the industry is going mainstream. And spil the outcomes of the meeting may reverberate through the crypto space (either positively or negatively) wij thought it would be a good chance to review the current state of regulations for each of the G20 member states:
Argentina is hosting the G20 meeting and interestingly is one of the fastest nations to adopt Bitcoin. Presently the Argentinian regulators have taken a mitts off treatment and encouraged innovation. Indeed, Argentina’s fattest futures market has plans to suggest Bitcoin futures.
Current status: No government regulation
Australia has no specific, broad ranging regulations but is investigating the most suitable treatment. However, the Australian Transaction and Analysis Centre (AUSTRAC) has recently updated its AML laws to require greater transparency and recording of cryptocurrencies. Through the implementation of a fresh Digital Currency Exchange registry, exchanges dealing with digital currencies will be required to disclose specific details of all transactions made on its platforms.
Current status: No overarching government regulation but concentrate on creating greater transparency re AML and digital currency exchanges.
Brazil emerges to have taken an initial hardline, banning investments ter cryptocurrencies whilst attempting to work out the onberispelijk treatment to broader regulation.
Current status: Financial assets not recognized, onmiddellijk investment prohibited
Canada is another country that is positioning itself spil a hub of blockchain innovation. Miners have flooded into Canada and the Central Bankgebouw of Canada is even considering the possibility of launching a state backed cryptocurrency. However, they remain vigilant about regulating illegal activities.
Current status: Cryptocurrency earnings liable for taxation
China has an interesting relationships with blockchain and cryptocurrencies. On the one palm it’s a hub of innovation, yet on the other arm it is one of the most rigorously regulated and managed markets. It will be very interesting to see the long term play from China unfolds.
Current status: Coin trading is prohibited and ICOs are prohibited
Presently, regulation is being discussed by individual member states on a country by country onderstel, but EU regulators have met to discuss the possibility of coordinating regulatory efforts across the European Union.
Current status: Agreed to more stringent rules to prevent money laundering and terrorist financing ter Bitcoin and other virtual currency exchanges
France joined Germany ter calling for international cooperation on crypto regulation. They have also developed a working group for cryptocurrency regulation with a particular concentrate on fighting tax evasion.
Current status: So far no regulation, but warnings about regulatory readiness (not disclosed ter detail), and risk of speculation and manipulation.
Germany (along with France) are one of the key members pushing for crypto regulatory discussions at the G20 meeting. They emerge to have a desire to help position Europe spil a leading hub of blockchain and crypto development, but believe that regulation will have to be a coordinate international effort.
Current status: It is a legitimate financial muziekinstrument and may be taxable, but requires extra licenses and permits.
India is another country that has taken a rather negative view of cryptocurrencies, now going spil far spil suggesting that cryptocurrencies should be banned spil they are potentially too hard to regulate. However, there is a lotsbestemming of innovation ter the space ter India and the latest successful fundraise by Zebi and the partnership they have secured with state government shows that there is presently slagroom to manoeuvre.
Current status: Not accepted spil a means of payment, regulation of money laundering and illegal activities
Indonesia’s central bankgebouw has issued a fresh warning about trading ter cryptocurrencies like Bitcoin, because of the risk of losses to the public and even a potential threat to the stability of the financial system. However, there is presently no formal regulation, albeit it is prohibited
Current status: No government regulation, but there is a geobsedeerd on financial technology companies using cryptocurrencies for transactions
The Italian Ministry of Economics is working on a decree that aims to classify the use of cryptocurrencies ter the country and to list service providers related to digital currencies. However, they have also noted that some central banks have / are considering launching cryptocurencies.
Current status: No government regulation [see article comments for more details from Alessandro Olivo]
Te 2018 Japan recognised Bitcoin spil legal tender, and is a country generally regarded spil taking a leading position te the development of blockchain and crypto technology and regulation. Spil noted above they are keen to guard against the negative and criminal elements such spil money laundering.
Current status: liable for taxation, payment muziekinstrument recognition
Mexican lawmakers have passed a cryptocurrency regulation bill. The framework states that cryptocurrencies are not legal tender and that cryptocurrencies such spil Bitcoin should be considered a commodity, not a currency. Te addition, the bill also seeks to waterput the operation of cryptocurrency exchanges under oversight of the country’s central bankgebouw.
Current status: Bill passed stating cryptocurrencies are not legal tender and should be treated spil commodities and related taxes. Central bankgebouw oversight of exchanges.
Russia is finalising federal law surrounding cryptocurrencies and ICOs and is taking a view that regulation is the response, rather than an outright kerkban. The law covers regulation of the creation, issuance, storage, and circulation of cryptocurrencies.
Current status: Cryptocurrency and ICO regulation legislation ter place, confinements on ICO investments and advertising, slagroom for regulated exchanges.
Saudi Arabia is taking a fairly relaxed view on cryptocurrency regulation, suggesting that they are working on regulation but that an outright kerkban is very unlikely. Ter fact, Saudi Arabia and Dubai are working on a pilot program to test how a fresh digital currency could be used to facilitate cross-border payments suggesting a positive treatment to the potential of blockchain and cryptocurrencies. Meantime a company wielded by a member the Dubai Royal Family has just partnered with Jibrel Network on their jCash cryptocurrency displaying further signs of top-down support te the Persian Gulf region.
Current status: Potential for some general regulations to be introduced, kerkban / prohibition unlikely
South Africa is looking at regulating cryptocurrencies and the central handelsbank even published a white paper on digital currencies spil far back spil 2014. Whilst presently looking into regulation, the use of cryptocurrencies ter South Africa is presently “not illegal” and are subject to taxation law.
Current status: No government regulation but regulation is planned
South Korea is a major market for cryptocurrencies, and te January accounted for up to 15% of Bitcoin trading. Due to major rente from their citizens, the government wasgoed compelled to act and originally pinned down on anonymous cryptocurrency trading. Anonymous trading is now banned but they are opening up regulations for KYC based trading and spil noted previously they are are considering reintroducing ICOs under fresh, regulated conditions.
Current status: No anonymous account transactions (real name system), tax prep ter progress, potentially introducing ICO regulation.
There is presently no government regulation. Ter fact, politicians te Turkey are reportedly looking to launch a national cryptocurrency. Ahmet Kenan Tanrikulu, the deputy chair of Turkey’s Nationalist Movement Party and the country’s former Industry Minister, has drafted a report to propose a state-backed cryptocurrency dubbed “Turkcoin.”
Current status: No government regulation
So far the UK has taken a wait and see treatment to cryptocurrency regulation. However, wij have recently seen the governor of the Handelsbank of England, Mark Carney, calling for a crack down. He noted that cryptocurrencies do not yet pose a risk to current financial systems, but essentially wants “to hold the crypto-asset ecosystem to the same standards spil the surplus of the financial system” to protect businesses and individuals and guard against illegal activities.
Current status: No government regulation
The CFTC and SEC senate hearing on 7 February 2018 wasgoed largely received ter a positive light with CFTC Chairman, Christopher Giancarlo appearing particularly supportive, and becoming somewhat of a cult hero ter crypto Twitter circles. The market is still digesting today’s US House Capital Markets, Securities, and Investment Subcommittee hearing, albeit there is a sense that no major strides forward were made ter the debate.
Current status: ICO prohibited, money laundering and illegal act regulations enacted, cryptographic exchange tradition license scheme ter force
Our view on the current regulatory landscape
It wasgoed unavoidable that the rapid growth of the blockchain and cryptocurrency would bring it to the attention of governments and regulators. How thesis regulators react will have an significant influence on where the industry goes from here. However, wij believe that a concentrate on regulation is a very significant step te the evolution and development of the industry.
Regulators are gaining more and more practice of regulating rapidly evolving tech markets and generally show up to be learning from the successes and failures of the past. Too mitts off and the market runs wild and scares off institutional money. Too stringent and you risk killing the market and hampering growth. It shows up that most regulators are taking a sensible treatment of attempting to remain arms off whilst working with the industry to foster development, form the most adequate set of regulations to protect businesses and individuals and permit the market to flourish.
It is vital that all businesses and individuals are aware of current regulations te their own country and any markets te which they operate and wij advise paying close attention to the G20 meeting next week spil well spil reading into and taking suitable legal advice to make sure that you and / or your business remain fully compliant te a rapidly evolving landscape.
Disclaimer: Torque Capital Vrouwen and its affiliates do not provide investment, legal or accounting advice. This material and opinion above has bot ready for informational purposes only, and is not intended to provide, and should not be relied on for, investment, legal or accounting advice.