Regulation of the crypto market is expected to be one of the huge influencing factors of the medium-term future of cryptocurrencies. This article will draw upon the research from 1H 2018 Global Blockchain Industry Strategic Overview by Huobi Pro to discuss the response towards cryptocurrencies by various governments and centralized authorities around the world. For a deeper discussion, the comprehensive report of the 1H 2018 Global Blockchain Industry Strategic Overview will be availed to attendees of Blockchain Festival Vietnam. You can visit the official website here for more information www.blockchainfestival.com
Overview of crypto assets and crowd funding policies in major countries and regions
Three trends to pay attention to regarding regulation
The United States may set a positive precedent for regulation
The United States highly televised SEC hearing on cryptocurrencies regulation has been positive so far and leaning to recognizing cryptocurrencies as securities, setting the tone for similar hearings in Germany and the Netherlands.
A combined effort of centralized and self-regulatory organziations will play a large role
After the Coincheck break out, 16 registered crypto currency exchanges formed Japan Cryptocurrency Business Association (JCBA) and announced to set investor safety standards of crypto market
Korean Blockchain Association (KBA)comprises 23 exchanges and they are dedicated to setup market standards
Efforts to improve regulation systems by leading countries and regions will speed up the formation of global joint regulation among country unions
Most countries proposed independent legislations of cryptocurrencies at the G20 summit held in March.
Before the G20 summit held in March, Germany and France proposed regulation of cryptocurrencies at the EU level.
Crypto Market Regulations of Major Countries and Regions in the World
Huobi Research evaluated cryptocurrency regulation along four parameters:
· Whether crypto assets are permitted to be used as payment tool
· Whether crypto assets exchanges are permitted to operate
· Whether crypto assets crowdfunding is permitted
· Whether investments in crypto assets are permitted
‘Supervision Strictness Index’ is a grade of the evaluation above, varying from one to four stars. The more stars, the tighter the policies, and the more conservative and unacceptable attitude toward crypto assets is
NORTH AMERICA(***)
· Whether crypto assets are permitted to be used as payment tool
The US government doesn’t recognize the monetary attributes of cryptocurrencies, but it doesn’t prohibit merchants from accepting cryptocurrencies as payment tool.
· Whether crypto assets exchanges are permitted to operate
State governments permit licenses eg. Coinbase licensed in New York State.
Exchanges with tokens defined as securities must be listed with the SEC
· Whether crypto assets crowdfunding is permitted
Crypto asset crowdfunding is permitted, but funding under the name of “Utility Token” is not in compliance any more according to the Chairman of the US SEC, in Feb 2018.
· Whether investments in crypto assets are permitted
Allowed
Taxation regulations are tightening
JAPAN(**)
· Whether crypto assets are permitted to be used as payment tool
Recognized legally according to the “Payment Service Amendment Act”
· Whether crypto assets exchanges are permitted to operate
Allowed as stipulated in the “Payment Service Amendment Act”
16 exchanges to date
· Whether crypto assets crowdfunding is permitted
Relevant laws and regulations are expected to come out soon.
· Whether investments in crypto assets are permitted
Relatively open to cryptocurrency investments
Different tax levels apply
SOUTH KOREA(***)
· Whether crypto assets are permitted to be used as payment tool
No legislative prohibition
Bitcoin is accepted as payment
· Whether crypto assets exchanges are permitted to operate
Domestic exchanges in compliance with e-commerce law can operate
Taxation applies
· Whether crypto assets crowdfunding is permitted
Prohibited
· Whether investments in crypto assets are permitted
Allowed
No tax
SINGAPORE(*)
· Whether crypto assets are permitted to be used as payment tool
In the future, crypto assets such as Bitcoin are expected to be considered as payment tool, and will be issued corresponding licenses according to Monetary Authority of Singapore(MAS)
· Whether crypto assets exchanges are permitted to operate
Licensed exchanges can operate
Taxation on profit applies
· Whether crypto assets crowdfunding is permitted
Tokens belonging to capital markets as defined by “A Guide to Digital Token Offerings”, issued by MAS, fall under the regulation of MAS
· Whether investments in crypto assets are permitted
Allowed, open attitude
Not taxed
HONG KONG(*)
· Whether crypto assets are permitted to be used as payment tool
Not legally recognized as payment
Cryptocurrencies are permitted as payment
· Whether crypto assets exchanges are permitted to operate
Allowed
Exchanges including security tokens have to seek license or register on HKSFC
· Whether crypto assets crowdfunding is permitted
Allowed
‘Security’ tokens have to be licensed by HKSFC or register with HKSFC.
· Whether investments in crypto assets are permitted
Allowed
No taxation
RUSSIA(***)
· Whether crypto assets are permitted to be used as payment tool
Bitcoin was banned in 2014 but stance has softened since
Several amendments proposed by the draft “On Digital Financial Assets” issued in 2018, the first step to legalization. Changes include the cryptoassets can be used but not as payment, recognizing digital signatures as valid among others.
· Whether crypto assets exchanges are permitted to operate
Not allowed, since Bitcoin was banned in 2014
The proposed draft “On Digital Financial Assets” 2018, softens this stance
· Whether crypto assets crowdfunding is permitted
According to a draft ‘On Digital Financial Assets’ introduced by the Russian Minister of Finance in 2018, outlined that individuals or legal entities can issue tokens as long as they have a number of documents and signatures
· Whether investments in crypto assets are permitted
In 2018, the Russian Ministry of Finance submitted the draft “ On Digital Financial Assets” delineating accredited and non-accredited investors
UNITED KINGDOM(*)
· Whether crypto assets are permitted to be used as payment tool
No legislation
Using crypto for payment is not prohibited
· Whether crypto assets exchanges are permitted to operate
Crypto-to-crypto exchanges are allowed. Registered examples are Bitstamp and HitBTC
Crypto-to-fiat exchanges or crypto asset related derivatives are regulated by the Financial Conduct Authority (FCA)
· Whether crypto assets crowdfunding is permitted
Allowed but investors asked to exercise caution
· Whether investments in crypto assets are permitted
Allowed
Not taxable yet.
SWITZERLAND (*)
· Whether crypto assets are permitted to be used as payment tool
Legislatively are not yet defined whether they are assets or currencies
Using cryptocurrencies as payment is not forbidden, and is not taxable
· Whether crypto assets exchanges are permitted to operate
Allowed.
The Swiss Financial Market Supervisory Authority (FINMA) grants regulatory compliance license to exchanges that meet requirements eg SBEX.
· Whether crypto assets crowdfunding is permitted
Positive. A lot of ICOs are issued in Switzerland
Regulation is still under construction.
Feburary 2018, FINMA categories tokens into three types: payment tokens, utility tokens and asset tokens
· Whether investments in crypto assets are permitted
no limit on crypto asset investment
Cryptocurrency investments are not taxable yet
GERMANY(**)
· Whether crypto assets are permitted to be used as payment tool
Supportive
August 19, 2013, the Federal Ministry of Finance in German announced that Bitcoin was categorized as a “accounting unit” and could be used for payment
· Whether crypto assets exchanges are permitted to operate
No clear regulations regarding cryptocurrency exchanges but relevant supervision might fall under the German Federal Financial Supervisory Authority (BaFin).
· Whether crypto assets crowdfunding is permitted
Conservative but no ban.
On March 28, 2018, BaFin clarified that tokens issued would fall under securities regulation.
· Whether investments in crypto assets are permitted
Allowed but investors are asked to conduct their due diligence before investing.
No clear policies for taxation for digital assets’ income.
Blockchain Festival Vietnam
The comprehensive report will be revealed at the Blockchain Festival Vietnam held in Ho Chi Minh City. Use the code WRITE50 to get a 50% discount when purchasing tickets. Don’t miss.
Website: www.blockchainfestival.com
