Cryptocurrency Regulation Is Evolving in Major Financial Countries
Scroll DownDespite a protracted cryptocurrency bear market, financial regulators around the world are keeping tabs on the trading, adoption and development of major tokens. One of the countries that has shown significant interest in coming up with a set of regulatory guidelines is the United Kingdom, where its Financial Conduct Authority recently issued a report about how it intends to manage this emerging technology. Thus far, the British FCA seems to favor a mostly neutral approach to cryptocurrencies. The Bank of England has not signaled an intention to invest in blockchain projects despite a recent increase in Bitcoin demand by people concerned about the future of the pound sterling in relation to Brexit. There is a sense of uncertainty because the FCA mentioned in its report that crypto tokens may in the future be classified as special investments, but for the time being they are considered to be financial instruments that can be used for security, exchange or utility purposes. In China, regulators have not eased from their cryptocurrency trading ban; in fact, they have not granted recognition. What is interesting about China is that this is a country that has introduced major blockchain projects for governmental use. Since the Chinese banking system is tightly connected to the Communist Party, it is unlikely that digital currencies will circulate in that country for the time being. In the United States, a country where cryptocurrency investment takes place to the tune of billion of dollars each year, the Securities and Exchange Commission has stopped short of declaring Bitcoin and other major tokens as investment securities, and this is despite the fact that the Chicago Board Options Exchange and the Chicago Mercantile Exchange both offer competing Bitcoin futures contracts. As of early 2019, American regulators mostly see cryptocurrencies as commodities. The Financial Services Agency of Japan has created a separate category for cryptocurrencies for the purpose of avoiding lumping them together with virtual currencies, which are instruments similar to the electronic yen, which in the future may be issued through a centralized blockchain platform managed by the Bank of Japan. This is a country where cryptocurrency development is bound to thrive becausew regulators have approved digital currencies as valid forms of payment for many goods and services.
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