Top 5 Countries On Way To Cryptocurrency Market Regulation
The cryptocurrency sphere is growing faster and faster, and even a long-standing bear market branded “crypto winter” isn't a hindrance to its development. Therefore, the issue of cryptocurrency market regulation becomes more urgent — and not only are we talking about online trading platforms, but also about technological blockchain companies and startups. Here is the list of five countries that are trying to decide how to regulate the cryptocurrency area or are going to do so in 2019.
Until recently, Canada was perceived as a country with a rather soft cryptocurrency regulation policy. But it turned out that such loyalty was nothing but the fault of the government that postponed the release of regulatory rules to the end of 2019. But the incident with the Canadian crypto exchange QuadrigaCX showed that the time to make decisions has already come. In December 2018, the company's clients lost access to their money stored in the cold storage of the exchange. This was due to the sudden death of QuadrigaCX CEO Gerald Cotten. He was allegedly the only person who owned the keys that opened access to customers' wallets.
Thus, investors' accounts turned out to be frozen, and the company was unable to recover $190 million to its clients. While the exchange is trying to comply with the court's order and is searching for money, some active former clients have created a committee to support injured customers.
The situation with QuadrigaCX showed how vulnerable crypto investors are. That's why the local financial regulators, the Canadian Securities Administration CSA and the Investment Industry Regulatory Organization of Canada (IIROC), have already begun working. These organizations have issued a joint communique containing regulatory requirements for cryptocurrency trading platforms. This demonstrates that preparations for the release of regulation rules in Canada have entered an active stage now.
Israel flourishes as a state that is open to technological innovations. Now there are more than 200 blockchain startups registered in the country, and the government is interested in increasing their number. The work on cryptocurrency market regulation in Israel began in 2017. Since then, authorities have formed a special committee to investigate the regulation issue. In the spring of 2019, it presented a full report on this issue.
The report was published on the website of the Israel Securities Authority (ISA). It contains recommendations for ICO regulation, and determines interaction with crypto assets in the country. As the ISA claimed, clear regulation rules have to contribute to the progress and development of fintech companies, not to hinder them.
Local blockchain evangelists were satisfied with the published report and conclusions presented there. Obviously, the recommendations are really aimed at the economical growth of the cryptocurrency sector. This means that Israel will continue to follow the chosen path.
Mexican authorities started talking about the release of crypto regulation rules in the spring of 2018. At that time, the government adopted the Law to Regulate Financial Technology Companies, and the central bank of Mexico (Banxico) received one year to determine which cryptocurrencies would be allowed in the country.
This term expired in March 2019, and as a result, the Banxico issued three circulars defining regulation rules for fintech companies engaged in cryptocurrency trading. The released set of rules has already been called a disaster, because it consists of exceptive propositions.
According to the advanced law derivative, only registered fintech companies can operate in Mexico, but licensing procedure hasn't yet been determined. At the same time, cryptocurrency transactions for these companies are prohibited. The law has already come into force but public discussion will be open until July 5, 2019. As we can conclude, in the coming months we should expect a bit of a break in these rules.
The Indian government hasn't yet decided how to regulate the cryptocurrency sector, but its attitude was more negative than positive last year. In April 2018, the Reserve Bank of India (RBI) banned banks to cooperate with companies and individuals involved in crypto. This was negatively perceived by the society, and as a result an interdepartmental committee was created. The main purpose of this organization is to determine the country's attitude towards cryptocurrency.
A great number of people took the RBI’s decision as a total ban, but later it became clear that the Indian government would rather support strict control over the crypto sphere. As noted in the committee itself, Indian authorities treat cryptocurrency with “an adequate level of caution”. Now the Indian government is having a hard time, because cryptocurrency market regulation policy in the country is still not defined. But we should expect that the issue will be resolved soon.
It might be weird to see China in this list given the fact that the activity of cryptocurrency exchanges is still banned in the country. Nevertheless, the actions taken by the Chinese government since the fall of 2018 demonstrate that its attitude to the crypto sphere is getting less radical.
According to the decision of the Shenzhen Court of International Arbitration, bitcoin is a property, which means that it can be transferred and used as a means of payment in some cases. Such a decision was adopted in the proceedings in which the defendant didn't return crypto assets (20 BTC, 70 BCH and 12.5 BCD) to the plaintiff within the contractual term. The defendant argued that the deal was closed at the time when cryptocurrency transactions were outlawed, thereunder the conclusion is invalid. However, the court held this issue differently, and it was the first precedent of this kind in the country.
Now individuals and enterprises in China can own cryptocurrencies and use them to pay for some purchases. For example, you can buy an annual subscription to the Beijing Sci-Tech Report magazine for 0.01 BTC or pay for accommodation in some hotels with ethers, and get a discount.
Anyway, this one giant leap for China is one small step for the whole world. Let's see how the attitude of Chinese authorities will change and whether it’ll become more loyal this year. 2019 is called the year of cryptocurrency regulation for a reason, and there are still many changes ahead.