So far, the year of 2019 has brought upon a huge list of blockchain and crypto related developments. As major firms worldwide are finding ways to adopt distributed ledger technologies, there is a need for governments to control and regulate to what extent blockchain technologies can be used.
Since the beginning of the year, a number of crypto regulatory actions were taken, predominately in Venezuela, the United Kingdom, the United States, and the European Union.
The financial crisis in Venezuela has opened the door for cryptocurrency usage in the country. This has led its government to adopt numerous measures and regulations to manage the usage of crypto in the struggling nation. The country’s National Superintendency of Crypto Assets and Related activities (Sunacrip) recently began regulating cryptocurrency remittances. The government announced that it will take 15% of any crypto transactions as a commission fee by stating:
“The sender of the remittances referred to in this ruling is obliged to pay a financial commission in favor of Sunacrip up to a maximum amount of 15% calculated on the total of the remittance.”
According to reports, the minimum commission will be around 0.25 euro (~$0.28) per transactions. Additionally, Sunacrip will establish and regulate remittance limits, set values of cryptos in sovereign bolivars, and tariffs.
As of now, It’s unclear what role could crypto play in terms of solving the financial crisis in Venezuela. However, let’s hope that the Venezuelan government is able to utilize its potential to answer to the country’s needs.
In the UK, the Financial Conduct Authority (FCA) has developed and proposed numerous guidelines on crypto assets. The FCA has provided a consultation paper highlighting its guidance on the subject of crypto assets. As of now, the document containing proposed guidelines is just a draft, as the FCA is waiting for stakeholders’ feedback by April 2019. When finalized, the guidelines will “help firms understand whether their crypto asset activities fall under FCA regulation” as per an FCA official statement. Furthermore, according to reports, the guidance has for objective to determine within which areas the already existing UK laws or adopted directives from the EU will apply to crypto-assets, all based on the traditional categorization of exchange, security and Utility tokens.
Additionally, the proposed guidance clarifies when crypto-assets should be labeled as “ specified investments” under the UK’s law. Overall, the FCA proposal targets 4 major areas being: Utility Tokens, Exchange Tokens, Security Tokens, and E-Money.
The U.S. state of Wyoming was presented with two new legislative bills at the beginning of the year. The first bill has for aim to classify digital assets within the already existing laws and applicable Uniform Commercial Code. additionally, the bill introduces an “opt-in framework for banks to provide custodial services for digital asset property”.
As for the second one, it implies to allow Wyoming’s corporations to issue “certificate tokens” and to recognize them equivalent to normal stock certificates. Both legislations have yet to be enacted as they are still in the process to become laws.
Lately, the EU has seen a lot of movement in terms of crypto regulation.
In Germany, a prospectus was approved by the German Bafin for the implementation of a Security Token by German-based financial institution Bitbond GmbH. Once implemented, the token will be used as a mean of paying debts, with an annual interest of 4% year, plus a variable interest of 60%.
As for Luxembourg and Italy, they have seen important movements towards the regulation of the technology behind cryptocurrencies. Recently the Italian Senate unveiled a proposal to recognize the legal enforceability of Smart contracts and time stamping for Distributed ledger technologies (any systems or technologies supported by the blockchain). In Luxembourg, a proposal to legalize the use of blockchains and DLTs as a way to hold and transfer “financial instruments” was revealed. When finalized, the new bill will recognize the circulation of financial instruments via DLTs.