Why 2019 might be the year of the cryptocurrency regulation
Last year was not the best time for crypto businesses and investors, with values bouncing from roughly 20,000 USD to around 3,400 USD per one bitcoin, as of now. However, despite the bear market and its consequences we have to deal with, another thing is also also abundantly clear — cryptocurrencies are here to stay.
In fact, 2018 was also marked as a year of a mass regulation of crypto. Let’s take a look at how crypto regulation currently looks across the world.
The United States
There has been a lot of buzz from the U.S. government about crypto. It’s currently recognized as a security there, and therefore falls under the Securities and Exchange Commission (SEC) jurisdiction. Cryptocurrencies are also recognized as securities under the federal tax law by the Internal Revenue Service.
Having regulatory clarity allows crypto businesses to operate in clear conditions. However, that also means they have to adhere to a sometimes rigorous set of rules to comply with the regulations. Two U.S. Representatives, Warren Davidson (R-Ohio) and Darren Soto (D-Fla.), have recently introduced the “Token Taxonomy Act” which would exclude crypto from the U.S. definition of a security, therefore also excluding it from the aforementioned laws. The bill is currently under review.
At the same time, earlier in January the SEC released their newest report, which stated one of their priorities is to examine crypto closely in 2019, which was a clear message that the existing regulations are most likely not going away anytime soon.
Currently, Canadian provinces have inconsistent regulations when it comes to cryptocurrency; however, the federal government is a different story. Same as the U.S., the Canadian government views cryptocurrency as a security. The government is currently looking into ways to regulate cryptocurrency even further by writing up amendment drafts which involve their anti-crime and anti-money-laundering sectors.
Ironically, some of the regulatory enforcements come to Canadian crypto companies from the U.S. For instance, the SEC has even begun to try to regulate cryptocurrency companies outside of the U.S. For example, a popular messaging app turned cryptocurrency developer, Kik Interactive Inc. is fighting back against the SEC taking “action” over their cryptocurrency, KIN.
Cryptocurrency regulations are happening across the globe, and Latin America is not an exception. However, due to the number of countries in the region the regulations also differ. For example, citizens from Chile, Brazil, Venezuela and Mexico can use cryptocurrency to pay for goods and services in retail stores. When it comes to taxes, the governments classify cryptocurrency as digital assets, therefore making the cryptocurrency investors disclose them on their taxes.
At the same time, Bolivia banned all forms of cryptocurrency in the country, including exchanges and wallets. Ecuador also has a ban in place, with the exception of their government’s own cryptocurrency, SDE.
In early January, Chile’s court forced banks to keep local crypto exchange accounts open. Additionally, as of last week, all Chilean crypto users learned that they now have to declare all of their crypto earnings for the Chilean Internal Revenue Service (IRS).
Being among the most welcoming areas for the cryptocurrency, on January 19 Saudi Arabia and the United Arab Emirates announced they’re launching their own new cryptocurrency. The goal of the newly formed crypto is to simplify and streamline transactions between the two countries, and experiment with cryptocurrency more for its further development on a governmental level and within their banking systems.
- Algeria banned any purchase, sale, possession or use of cryptocurrency in 2018.
- The Central Bank of Egypt warns their patrons from trading or using cryptocurrency
- The Iraqi Central Bank goes further and punishes their patrons for using or storing cryptocurrency because it’s prohibited
Last month, after the long ban and time of uncertainty, Iran’s Central Bank has released the county’s first official regulation legalizing all cryptocurrencies, both national and international ones.
The United Kingdom Financial Conduct Authority (FCA) published their preliminary consultation paper earlier this month about their findings and evaluation of cryptocurrency, also highlighting the possible regulations that can be implemented using existing UK laws. The FCA has also established a Cryptoassets Taskforce, which has been working on the cryptocurrency consultations and will continue working on finding out how the crypto would be best defined under the specified investments.
On January 9, the European Banking Authority published a report with their advice on crypto-assets, which defined what exactly crypto-assets are and are not, stating that they’re considered a private asset created with the help of a cryptographic technology and located on a ledger.
The report also states that crypto-assets and the activity related to crypto-assets do not implicate that there will be an increase in financial stability. The EU Banking Authority decided that based on the research conducted for their report, crypto-assets are out of the realm of what the EU can financially regulate and therefore are not covered under the law. The report states crypto-assets aren’t recognized as fiat money; however, crypto-assets can lie within the scopes of “electronic money” if they meet certain requirements, as outlined on page 12 of the report.
Recently, the Eurasian Economic Union announced that their Economic Commission sector is releasing a report on cryptocurrency and goals of creating a financially regulated market with a common ground by 2025. TASS, a Russian news outlet, reported this announcement was given at a press conference by Tatyana Volovaya, a Eurasian Economic Union Minister, in Moscow, Russia. The report hasn’t been released just yet, but according to Volovaya, it’s coming very soon.
Officially being among the first countries in the world to come out with clear and straightforward regulations for blockchain and cryptocurrencies, Belarus continues to be on the forefront in development of both technologies.
Earlier in January, the country welcomed a new blockchain-based platform, Currency.com, a regulated securities exchange for “tokenized currency” with open arms. The world’s first platform of this kind, Currency.com was created by Ventures and VP Capital and allows its users to purchase and trade traditional assets, such as gold and stocks, with cryptocurrency. Additionally, the platform boasts its users to be able to buy shares in huge conglomerates, including major worldwide companies, for example, Apple. Within two hours of Currency.com’s launch, the exchange received more than 2,000 applications of users ready to register.
Also joining the ranks of Belarusian businesses using more advanced technology, Board Chairman of Belarusbank, Viktar Ananich, spoke to Belarusian media outlets announcing the bank’s research into cryptocurrencies to possibly implement them in the future and even to launch a cryptocurrency exchange under Belarusbank’s guidance.
You can read more about the Belarusian crypto and blockchain laws here.
2019 to become a historic year?
The list of countries looking into the official cryptocurrency regulations goes on and on. Experts predict 2019 could become a historic year for cryptocurrencies, which would bring regulations and further mass adoption worldwide.