In this week edition of ActuRegulation, the focus is on Japan, Australia, and Uzbekistan
Blockchain related regulations are already in full effect in many countries within the continent of Asia. Japan is among the latest to have taken regulatory steps. Just recently, the Japanese government made some considerable changes in terms of the crypto field. During a cabinet meeting, the Japanese government decided to introduce new amendments to the Financial Instruments and Exchange Law, and the Fund Settlement Act. Targeting digital currencies, the newly introduced amendments have for goal to intensify crypto trading restrictions in Japan.
More importantly, since the adoption of cryptocurrencies in Japan along with the anticipated opening of more than 260,000 stores accepting bitcoin as a legal tender, the Financial Instruments, and Exchange law now has a crucial role in enforcing securities law and regulating securities companies in Japan. As well as encouraging transparency, Financial Instrument and Exchange Law provides security for investors.
In addition to setting new strict rules for stocks and shares, bonds, and financial derivative transactions, the newly introduced amendments also:
- Clarified issuance of tokens to be regulated by the Financial Instruments and Exchange Act
- Maintain an information disclosure system for investors and sales restrictions for token intermediaries
- Prohibition of advertising and solicitation that encourages speculation
- Maintained a provision to preferentially return to customers the virtual currency they had deposited at the time of bankruptcy of the exchange company
- Name of virtual currency as “cryptographic asset”
- Manage customer’s virtual currency with cold wallet etc.
- Mandatory financial resources for virtual currency managed by customers on the net
- Make margin transactions as regulated as foreign exchange evidence (FX) transactions
- Submit in advance when changing the virtual currency handled by the exchange company
- Prohibition of unfair trade such as popularization of reputation and price manipulation
In the case of Bitcoin and Crypto in general, Australia is one of the many countries to have outlawed the use of digital currencies as legal tenders in any monetary transactions. Even though Australia had and still has no plans to make Bitcoin a legal tender, its government removed the “double taxation” law on Bitcoin. On September 14, 2017, the Australian government officially announced the removal of double taxation which previously had people paying the Australian goods and services tax (GST) when purchasing the cryptocurrency in the first place, and then again when making a purchase.
Although the future of the blockchain technology is uncertain in Australia, it’s obvious that the government is taking the necessary steps for the full adoption of Distributed Ledger Technologies in the country. On a similar note, It has been reported that independent companies and state-run companies are using blockchain for solar energy rights, travel needs, supply chain management and banking in Australia.
Back in 2018, Uzbekistan’s president Shavkat Mirziyoyev signed a law legalizing the activities of crypto exchanges. Furthermore, the law obliged foreigners to trade digital currencies in the Central Asian nation by means of creating “a subsidiary in the country”. Also, the approved law requires a minimum capital of $710,000 to register a crypto exchange.
Additionally, under the regulation, crypto exchanges also have to abide by counterterrorism and AML laws.
In regards to blockchain has a whole, back in September 2018, the Uzbekistan government initiated state blockchain development fund or Digital Trust, which will be used to merge blockchain into governmental projects such as healthcare and education.
In the case of Australia, the removal of the double taxation law for cryptos is a positive sign for the development of Fintech firms within the country. Australia embracing blockchain technology will only have positive effects on its economy.