Crypto Regulation Around the Globe

How serious is the world about crypto?  As a new technology rapidly shaping the face of a new era in payments and more, crypto came from an independent source.  That is to say, it was not the brainchild nor the project of any single entity or nation. Thus, countries across the globe are currently in the position of having to decide what they will do with this unprecedented situation.  Some are shying away, making an effort to restrict and control it. Meanwhile, others have embraced it as a new way forward in innovation and enterprise. Yet others still sit on the fence, unsure whether to embrace or fear the change.  Regardless, in many countries, crypto regulation has already progressed significantly.  


In this tiny little country of less than half a million people, the biggest crypto exchange in the world, Binance, makes its home.  This is due to Malta’s early adoption of crypto and their efforts to clarify their regulatory structure from the beginning. Having passed legislation that governs cryptocurrencies, blockchain, and distributed ledger technologies, Malta’s clear framework allows companies that are based there to move faster in making new developments and expanding their businesses.  The influx of new companies setting up headquarters there, as well as some that have relocated to Malta to avoid the drag of uncertain regulation in their home countries, has earned Malta the nickname “Blockchain Island.” In September 2019, Malta announced a new three-year strategic plan in conjunction with their newly minted “Malta Digital Innovation Authority” to further crypto development in the nation.  Malta is already considered by many to be “the crypto capital of the world.” Meanwhile, Maltese Prime Minister Joseph Muscat has stated his belief that crypto is “the inevitable future of money,” envisioning and taking steps toward creating an economy in Malta that is crypto-based.  


Singapore, an island city-state off the coast of Malaysia, is already the fourth-largest financial center in the world.  In addition to being one of the largest logistics hubs and the home of one of the largest marketplaces for wealth management, Singapore has also encouraged crypto innovation.  The blockchain hub of Southeast Asia, it has experienced exponential growth in the cryptocurrency sector. The Monetary Authority of Singapore has released detailed guidelines for digital token offerings and taken a transparent approach to crypto classifications.  Singapore each year is also home to one of the largest cryptocurrency conferences in the world with over eight thousand attendees from across the globe. Like Malta, Singapore’s crypto-friendly reputation has spurred the moves of crypto companies less welcome at home, and the nation is host to giants in the space such as mining company Bitmain and cryptocurrency exchange Huobi.  Singapore and the MAS are working together with the financial industry to create a “Smart Financial Centre,” and, according to the MAS’ Managing Director Ravi Menon, “Building a strong distributed ledger technology ecosystem is part of [our] broader FinTech strategy.”


Japan is one of the largest economies in the world for Bitcoin.  It has a population of only 127 million people, yet it accounts for approximately eleven percent of global Bitcoin trading.  A tech titan historically, Japan has embraced crypto with no less enthusiasm. Japan officially recognized digital currencies as a form of money in 2016.  The same legislation also classified cryptocurrency exchanges as financial services institutions, of which sixteen have banded together to create the Japan Virtual Currency Exchange Association.  The JVCEA is a self-regulating body that agrees to abide by certain shared standards as well as facilitate communication between the crypto industry and the government. Many of Japan’s largest retailers, such as Bic Camera with over seven billion dollars a year in revenue, also already accept cryptocurrency.  Even some utility bills can be paid in Bitcoin. Meanwhile, banks are beginning to explore blockchain technology, and tax revenue estimates from Japan’s burgeoning cryptocurrency industry are estimated to potentially sit at over nine billion dollars. Ken Kawai, partner at one of the “Big Four” law firms in Japan, is a firm supporter of the trend.  “The government wants to facilitate fintech through cryptocurrency and blockchain technology.”


Switzerland, a venerable and vaunted financial hub, is also the home of “Crypto Valley.”  An organization of fintech companies, the Crypto Valley Association’s efforts to support cryptocurrency development in the nation have contributed to the presence over 150 blockchain companies that now reside side by side with some of the world’s most respected financial institutions.  The government’s central bank, Riksbank, has been researching the possibility of issuing their national currency, the Krona, in digital form for years. In the meantime, the Swiss Financial Market Authority is the first in the world to officially license two crypto banks, offering services to institutions such as asset custody as well as trading and product offerings.  Meanwhile, the Swiss stock exchange is one of the few in the world to integrate crypto assets, with seven exchange-traded products listed on the national bourse, in addition to a separate regulated exchange expressly for crypto assets. The crypto ecosystem in Switzerland increased by twenty percent in the last quarter of 2018. Geneva’s willingness to engage in clear communication regarding their stance on crypto has even encouraged entities such as Facebook’s Libra to set up shop locally rather than in the USA.  David Marcus, head of the project, has stated that “Switzerland is trying to become a lighting rod in Europe for companies that want to develop solutions around these new technologies. It shows an openness and progress that we haven’t necessarily seen in the past.”

Malta, Singapore, Japan, and Switzerland are not the only countries in the world getting serious about crypto.  Luxembourg is known for its progressive attitude towards cryptocurrency, and the nation of Belarus offers a regulatory framework as well as tax breaks for companies mining or trading cryptocurrency.  The US, while in the process of developing a framework, has been slower to adopt clear regulations and made moves to restrict development until a framework can be applied. Moving forward with clear communication, an open outlook, and safety as well as innovation in mind, many nations around the globe are making strides to develop their technological capabilities and welcome innovation in the crypto space.

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