The year 2017 is surely going to be remembered as the time when investors investing hundreds or thousands of dollars earned millions. However, it all changed with the crypto regulators stepping foot into the cryptocurrency space. We are just three months into 2018, and already, many crypto regulators worldwide are coming up with all kinds of suggestions on how to monitor the cryptocurrency market.
Notably, the banking and financial industry has been taken by storm because of cryptocurrencies' ability to transfer funds. Given the complex nature of digital currencies and their underlying technology, central banks and governments are finding it to be quite challenging to develop a regulatory framework for cryptocurrencies. That's because crypto transactions often take place between entities located in all corners of the world. This makes it difficult to create regulations that would be applicable everywhere, or be mutually agreed upon.
Take the example of Japan’s effort to persuade G20 members to regulate cryptocurrencies. Although Japanese regulators want tighter controls on crypto activity, particularly on its use in money laundering, not all G20 members agree on the same type of regulations. Some of them want to go hard, while others demand a more lenient approach.
US Regulators Struggle To "Legally Define" Cryptocurrencies
One can least expect from countries like the US failing to legally define cryptocurrencies. One of the federal judges in the US gave a ruling that these digital currencies are commodities. On the contrary, SEC in the US defines them as tokenized securities, and thus wants them to be regulated accordingly. Meanwhile, FinCen (Financial Crimes Enforcement Network) considers cryptocurrencies as a substitute to fiat money. Thus, pointing to the fact that FinCen wants to classify them as money.
Moreover, regulators are struggling in many other countries as well on how to set up a legal framework around digital currencies. However, the situation in the US seems to be more concerning, because a lot of confusion exists about the various aspects of managing cryptocurrencies.
Israel's Approach To Crypto Regulations
While US regulators appear to be uncertain as to how police cryptocurrencies, Israel recently appointed Anat Guetta, a new Head of their Securities Authority. This new crypto regulator is taking a more stringent approach against cryptocurrencies. The new head wants to allow limited sandboxing of ICOs taking place in Israel.
Sandboxing, as it pertains to regulating cryptocurrencies, is providing an "environment in which authorities can temporarily relax certain regulatory requirements while the organization is testing and scaling its business model". Presumably, this new restriction was recommended because of the large number of scams that have been orchestrated under the guise of ICOs. Similarly, other regulatory bodies in nations such as Thailand have moved to regulate ICOs and all transactions involving cryptocurrencies.
Industry Experts See Opportunity in Disguise
The wiser investors do not see crypto regulators as a threat; instead, they view it as an opportunity. The interest in buying cryptocurrencies or investing in them is not dying down, unlike what some crypto regulators would have wished.
There are several reasons why a number of investors believe the future belongs to the crypto space.
- Cryptocurrencies provide innovation that is non-existent in the old payment systems. This delivers speed, efficiency and gives power to individuals to send & receive money.
- They believe the fast changing technological landscape of cryptocurrencies would be too difficult for the crypto regulators to catch.
- Many industries need to revolutionize through trust and decentralization. Cryptocurrency is based on blockchain technology. Blockchain technology offers so many other promising use cases, making it difficult to find something else which can provide the same kind of benefits.
- Financial regulators lack the essential know-how to keep pace with the changing speed of technology in the cryptocurrency space.
Argentina – The crypto regulators in Argentina are, for the most part, going easy on cryptocurrencies, as it is one of the fastest Bitcoin adopting countries in the world.
Australia – There are different regulations set, but the focus remains on ensuring more transparency in the recording of cryptocurrency transactions.
Brazil – Initially, the crypto regulators in Brazil took a hard line approach, but now they are trying to work things out in a manner which won't stifle innovation.
Canada – Canada is currently at the forefront of blockchain innovation, welcoming miners and also considering launching state-backed cryptocurrency.
China - China has been known to drive technological innovation yet it deals with the crypto markets in a strict manner.
EU – The crypto regulation discussions vary from one country to the other within the EU.
France – France is with Germany to gather support for international cooperation for implementing international crypto regulations.
Germany – Germany also holds similar crypto regulation views as that of France.
India – India did not welcome cryptocurrencies, and at this point, wants to ban them altogether.
Indonesia – Indonesia’s central bank issued yet another warning not to buy cryptocurrencies and the potential risk of losses to the general public.
Italy – Ministry of Economics in Italy is working on a decree for classifying the use of cryptocurrencies.
Japan – It leads development of blockchain technology besides working on regulations.
Mexico – The lawmakers in Mexico did pass a cryptocurrency regulation bill, with the framework stating they are not legal tender and cryptocurrencies like Bitcoin need to be classified as commodities.
Russia – Crypto regulators in Russia are finalizing laws related to cryptocurrencies & ICOs, while considering regulation instead of a complete ban.
Saudi Arabia – Saudi Arabia is taking a lenient view, but also working on regulations.
South Africa – South Africans want to regulate cryptocurrencies, and their central bank published a whitepaper about virtual currencies, which reflected the nation's approach on how to manage digital currencies, back in 2014.
South Korea – Initially, the South Korean government tried to clamp down on cryptocurrencies, but later had to take a more lenient approach, because of the severe backlash from its crypto-obsessed citizens. As most crypto watches are aware, a lot of trading of cryptocurrencies takes place in South Korea.
Turkey – The country does not currently have regulations for cryptocurrencies and may even launch a national cryptocurrency.
United Kingdom – The governor of the Bank of England did call for a crackdown. However, the UK is currently following a "wait and see" approach.
Posted from my blog with SteemPress : https://cryptocoremedia.com/crypto-regulators-hyper-active-mode-during-2018/