By Margarita Vznuzdaeva
May 30th, 2018

Cryptopolicy around the world: current situation

How the cryptopolicy is realized all over the world, which attitude towards cryptocurrencies and ICOs the authorities of different nations and experts have

Asia

In Japan and Philippines crypto exchanges are legally approved, the ICOs are absolutely legal in Taiwan. The crypto business is out of law in China, the initial coin offerings are also banned in South Korea. In Hong Kong and Singapore the crypto exchanges and ICOs are not legalized, but there are no bans for these kinds of activity. Thai central bank bans other banks in the country from being involved into transactions with cryptocurrencies, the Reserve Bank of India has banned the financial organisations dealing with bitcoin and other digital coins.

Japan demonstrates quite a progressive view upon cryptocurrencies. As it was announced on Bitcoin News, in March Japanese representatives wanted to push other countries for adoption of global rules on cryptocurrencies at the G20 Summit. Nonetheless, as a result of the meeting, no concrete measures were introduced to clamp down on the crypto market.

Moreover, Japanese authorities, in particular the Financial Services Agency, issued some punishments to several cryptocurrency exchanges and stopped the business of the other ones to protect consumers. All these measures are a reaction to the $530 million theft of digital money from Coincheck, a bitcoin Tokyo-based exchange. Nevertheless, the Japan policy is favourable for crypto economy, crypto exchanges activity, which is absolutely legal, and ICO business, which is in the gray zone right now.

Philippines have one of the biggest markets for international transfers, because many of citizens of this country transfer money, they earned, to their relatives from abroad. The Securities and Exchange Commission has been actively working on the rules on cryptocurrency trading, as Reuters wrote in January. This bill is expected to be elaborated by the end of this year and it will also likely cover the ICOs regulation.

Emilio Aquino, SEC: We need to act because initial coin offerings are sprouting especially in 2017. We want to come up with our own set of regulations. You have to be extra careful how investors in this new space are protected

As Taiwan’s Minister of Justice, Qiu Taisan, stated, the cryptocurrency regulations would be in place by November to prevent possible money laundering. Most of the worries in this island nation are connected with financial crimes, involving cryptocurrencies, possible evasion of taxes and conflict of digital coins usage with the traditional banks functioning. Its current policy can be characterized as an intermediate position between innovation and protecting consumers from uncertain practices (scams, frauds, etc.).

Jason Hsu, lawyer: There needs to be a whole new set of frameworks and narratives to position crypto and its underlying technology blockchain as the strength that Taiwan can develop. Once that idea is instilled in their minds, I think we will see a quick switch happening

The central bank of Singapore regulates virtual currency activity only if it provokes specific risks. The anti-money laundering requirements on those who provide virtual currency services are imposed there. in March the Monetary Authority of Singapore announced, it is looking forward new regulations on the cryptomarket.

Ong Chong Tee, deputy managing director of Monetary Authority of Singapore: MAS is currently assessing if additional regulations are required in the area of investor protection

The authorities of Thailand review their position on the crypto currencies in the direction of possible restrictions to prevent possible use of digital coins in the criminal sphere. At this moment a royal decree is a kind of legislation in Thailand, which sets rules on emergent situations that may concern public safety. Several documents with new regulating initiatives will be also soon developed: Act on Digital Asset Businesses, Registration requirements for transactions with cryptocurrencies and Revision of the Revenue Code to clarify taxation on digital assets.

Wissanu Krea-ngam, Thailand’s deputy prime minister: The latest legal effort comes amid rising illicit use of cryptocurrencies in money-laundering, crime and tax avoidance.

The answer of Indian authorities to possible financial frauds is issuing 100,000 tax notices to cryptocurrency investors that are suspected of concealing their profits from government.

Arun Jaitley, finance minister: We will take all measures to eliminate the use of these crypto assets in financing illegitimate activities

Sushil Chandra, chairman of the Central Board of Direct Taxes: We found out that there is no clarity on investments made by many people, which means that they have not declared it properly

As it was written before, the ICOs are banned in South Korea. Moreover, the South Korean government has banned its officials from holding any crypto assets. At the same time the finance minister of the country, Kim Dong-yeon, told in January that cryptocurrencies wouldn’t be banned or “suppressed” by authorities and can be used by the citizens.

In Indonesia the attitude towards cryptocurrencies is not friendly at all. The Indonesian central bank warns people from digital currency use and it also doesn’t recognise these coins as a means of payment or a legal medium of exchange.

Agusman, Bank Indonesia’ s spokesman: The ownership of virtual currencies is high risk and prone to speculation because there is no authority who takes responsibility, there is no official administrator and there is no underlying asset to be the basis for the price

(Cryptocurrency) is not a legal medium of exchange. We remind (people of) its risks. When the risks occur, the losses will be borne by the public. We are obliged to protect consumers and protect them from a bubble

China has a restrictive position on all the crypto and ICOs issues and has no plans to change its current position. There is an opinion that the authorities secretly develop their own cryptocurrency, but it more seems to be a conspiracy theory, not a real one.

Americas

In Americas the neutral (“waiting”) position is chosen. Most of cryptopolice is not regulated and not banned. The ICOs are all legal in United States and Canada.

The United States Securities and Exchange Commission (SEC) currently works on the ICOs investigations and the legislation development. The authority has already issued subpoenas and information requests to technology companies and those people who are involved in the crypto activity, as The Wall Street Journal wrote in February. Nevertheless, Coinbase continues to be one of the most influential players on the market.

Jay Clayton, Securities and Exchange Commission chairman: I want to go back to separating ICOs and cryptocurrencies. ICOs that are securities offerings, we should regulate them like we regulate securities offerings. End of story

One of the most biggest banks of Canada, Bank of Montreal, has taken a conservative policy on the new crypto economy, as Cryptoslate reports. Moreover, Scotiabank has blocked all transactions related with cryptocurrencies and Toronto-Dominion Bank also avoids its customers from crypto activity with credit cards. At the same time, the operator of the Toronto Stock Exchange has a plan to launch a cryptocurrency exchange desk and the authorities show their positive attitude towards cryptocurrencies. For example, in January the authorities decided to collaborate with World Economic Forum to show the whole world a new blockchain-based technology called Known Traveller Digital Identity.

Brazil has joined the restrictive policy of China and India on the cryptocurrencies issues in February. In January the Securities and Exchange Commission of Brazil (CVM), according to the Reuters news, prohibited local investment funds from buying cryptocurrencies. Recently in April there was an information that Brazil’s authorities would open the door for indirect investments into cryptocurrencies.

Europe, Middle East

 The “gray” positioning of the crypto market and the ICOs arena takes place in most powerful European countries and in Russia. Legislations are planned to be made, but truly in a long-distance perspective.

The head of UK Central Bank, Mark Carney, says the cryptocurrencies fail as a type of money, because only few people can benefit from holding them and only using it in “in parallel with the traditional currencies of the users”. However, there are many cryptocurrency exchanges and fintech services connected with digital coins in the country, that are still in demand.

Some words of governor about regulations that are needed:

In my view, holding crypto-asset exchanges to the same rigorous standards as those that trade securities would address a major underlap in the regulatory approach

According to the latest March news, the Autorite des Marches Financiers (AMF) in France blacklisted 15 cryptocurrency and crypto-asset investment websites on suspicion of fraud and regulatory violations.

AMF: Don’t invest in that which you don’t understand

In Germany transactions with Bitcoin hasn’t been taxed since 27th of February and its policy is rather loyal in comparison with other countries. This kind of transactions is only taxed in the process of cryptocurrency exchange into fiat money.

The German Federal Ministry of Finances: Virtual currencies (cryptocurrencies, e.g., Bitcoin) become the equivalent to legal means of payment, insofar as these so-called virtual currencies of those involved in the transaction as an alternative contractual and immediate means of payment have been accepted

Among Russian authorities there are many controversial opinions about cryptocurrencies. The legislation for the digital coins usage has been discussed from 2017 and it hasn’t been prepared yet. For example, the head of Russian Central Bank, Elvira Nabiullina, compared cryptocurrencies with financial pyramids and underlined possible danger of bitcoin becoming a legal mean of payment. Anatoliy Aksakov, the head of the Financial Market Committee, claims even if bitcoin gets a really high price, it still remains a financial pyramid. As an opposition the other Russian politician Boris Titov supports an idea of giving legal status to cryptocurrencies and German Gref, the head of Sberbank, also says that cryptocurrencies should be investigated, but not banned at all.

Africa

Nigeria and Zimbabwe plan to create a legislation for cryptocurrencies. Many Nigerians were firstly involved into Mavrodi Mondial Moneybox Ponzi Scheme from 2015, then cryptocurrency scams replaced this fraud. That is the main reason why the regulation and crypto education for population is really needed there. As it was reported by Bloomberg Businessweek, many special informal networks of professional Bitcoin traders has already been doing the verifying transactions work and their number continue to grow. The payments in cryptocurrencies are already banned in Zimbabwe, nevertheless, before Bitcoin was considered as a possible alternative to the formal financial system.