Best Examples Of Crypto Regulation
With the multi-million dollar crypto-heists occuring multiple times a year, it is no surprise that governments would crack down to prevent illicit activities. Many ICO’s have come out as fraudulent, eroding the public’s faith in cryptocurrencies.
Bitcoin’s burgeoning cultural and market influence has many wondering about how the crypto industry may affect monetary policy.
Some view it as a threat to central banks existence. On the other end of the spectrum, some believe that central banks may actually benefit from issuing their own national cryptocurrency.
Despite the fact that these scenarios are years away from seeing the light of day, governments all over the world are in a frenzy to curb illicit activities, mitigate damage to current monetary policy and to discover new ways blockchain technology can be utilized.
However, these governments are taking vastly different approaches. Cultural, political, economic and technological factors heavily influence national policy.
The following countries have taken major steps in providing clarity with innovative policies that simultaneously foster an environment for new cryptocurrency businesses and protect investors.
JAPAN
Leading the way in mainstream usage
After the Mt. Gox $450 million bitcoin heist of February 2014, regulation and theft prevention in the crypto-space was hot-button topic amongst world leaders and their governing bodies. The biggest questions were ‘How to prevent future hacks’ and ‘How does cryptocurrency affect monetary policy?’
While some countries like China, Russia and Vietnam have outright banned cryptocurrency usage, Japan’s government have been a pioneer in cryptocurrency adoption.
In April 2017, the Japanese government amended banking law to define cryptocurrency as a legitimate means of payment.
Bitcoin usage is steadily becoming the norm where everyday services like restaurants, airlines can be paid for with crypto. Even one of Japan’s major railway companies plans to adopt crypto as payment.
ESTONIA
Leading the way in government implementation
Estonia, the birthplace of the popular Skype service has built a reputation for itself as a prosperous and economically advanced country.
The government has a welcoming stance on cryptocurrency in general. The cost of establishing a cryptocurrency business in Estonia is low, reportedly around 8,000 euros making Estonia one of the easiest European countries to operate in.
Furthermore, Estonia is the first country to apply blockchain technology within their government’s infrastructure on a national scale. The initiative will help secure heatlh records for its 1.3 million residents.
Artur Novek, the Implementation Manager and Architect of the Estonian E Health Foundation remarks:
“We are using blockchain as an additional layer of security to help us ensure the integrity of health records. Privacy and integrity of healthcare information are a top priority for the government and we are happy to work with innovative technologies like the Blockchain to make sure our records are kept safe,”
If successful, financial and government institutions all over the world will follow suit, therefore increasing faith and participation in cryptocurrency.
Malta
Leading the way in effective regulation
Malta, a Southern European island nation, part of the Eurozone and uses Euros (EUR) as their currency. The island nation is known for its supportive legislation for cryptocurrency exchanges. A Maltese economic minister stated that Malta wants to be known as “The Blockchain Island.” Bloomberg business has dubbed Malta as the “hub of the cryptocurrency world.”
“At a time when countries around the world are expressing ambivalence about cryptocurrencies, if not cracking down on them, Malta is writing rules that should give exchange owners and users certainty about the future. The rules will cover how brokerages, exchanges, asset managers and traders operate, making them among the broadest set of regulations for the industry. “The proposed framework will offer legal certainty in a space that is currently unregulated,” the government said in a consultation paper. A national tax policy that permits international companies on the island to pay a rate of as little as 5 percent doesn’t hurt, either.” — Bloomberg Businessweek
In a world of reluctance and distrust in cryptocurrency, Malta has been a haven of certainty and growth.
Binance, one the largest crypto exchanges, is planning to relocate its headquarters to Malta, due to its favourable and detailed legislation.
The Maltese government is took a steps in providing a comprehensive regulatory framework for crypto businesses by establishing Malta Digital Innovation Authority.
The MDIA will certify blockchain platforms used by companies and will improve the verification processes for crypto platform users. This unprecedented legislative support gives the opportunity for new exchanges to grow and also protects its consumers.
Malta’s courageous steps to embrace crypto-technology is showing the world how its done.
Without clear regulations, cryptocurrency innovation stagnates. Fraudulent activity will push out the good and decrease participation, and uncertainty will drive away entrepreneurs and investors. Immediate implementation of policies that increase transparency and security is necessary for crypto to go worldwide.
