Global Lawmakers Struggle with Cryptocurrency Regulation

As more nations come forward with their plans for cryptocurrency regulation, lawmakers’ varied approaches to the issue highlight the many challenges and difficulties presented by such a revolutionary new asset. Around 13 countries have now imposed their own rules or announced intention to do so. Amongst them is considerable diversity. These range from outright bans in Bolivia and Ecuador to fully legal status in Japan.

The latest nation to hit the headlines in relation to digital assets is Russia. Their executive have long been sceptical of cryptocurrency but now it appears they’re ready to act upon it. On Tuesday on this week, President Vladimir Putin called for regulation of the space, expressing the “serious risks” they pose to the state through money laundering and tax evasion. The announcement was coupled with central bank officials declaring their cooperation with prosecutors to block cryptocurrency exchanges from the public. The first governor of the Russian central bank went even further with his damnation declaring Bitcoin “a pyramid scheme.”

China too has appeared equally hostile to cryptocurrency, although as per tradition, their cards have been kept much closer to their chest. Early September saw the pseudo-communist power ban fund-raising via initial coin offerings. This was followed by several exchanges announcing they would cease operation there. Lately, rumours have been circulating that China will soon embrace Bitcoin once more, only this time with much tougher regulation around the space.

However, ever-resilient to attack, Bitcoin found a way. Thanks to trading platforms like LocalBitcoins, and encrypted chat platforms like Telegram, the Chinese public are still able to buy and sell cryptocurrency. Judging by the swells in activity on both the aforementioned platforms, the people aren’t going to give up crypto lightly.

Nor is it possible to completely wipe out crypto. Thanks to the peer-to-peer, distributed network upon which the currency runs, users can interact with blockchains as long as they have access to the internet. The system requires no nod from either bank or government. In an amusing analogy, Alex Tapscott, of NextBlock Global Ltd., likened attempting controlling digital assets to “trying to catch water.”

Such sentiment hasn’t stopped the likes of Russia, Bolivia, Ecuador, South Korea, and China from attempting to limit access to all or some aspects of cryptocurrencies. It’s hardly surprising that nations with large governments would fear such a radical, seemingly chaotic commodity. Roger Ver, Bitcoin proponent and entrepreneur outlines some of their fears:

As cryptocurrencies gain wider acceptance, their ability to undermine politicians increases… The invention of bitcoin is one of the most liberating technologies in all of human history. It is on par with the importance of the invention of the printing press, or the internet itself.

Elsewhere, things are much less fatalistic. Rather than talking of bans, a European Central Bank worker last week claimed that the institution were talking about “concrete legal restrictions” on digital coin sales.

The United States have taken tentative steps formulating their stance on cryptocurrency regulation. The US Commodities Futures Trading Commission legally classified Bitcoin as a commodity, and this year approved the first options trading, clearing, and settlement firm. The SEC have also offered some preliminary words regarding initial coin offerings. In July, they said that ICOs are to be classified as securities and therefore must fall under the same legal requirements. However, they did offer a proviso if “a valid exemption applies”.

Meanwhile in the UK, Bitcoin is treated in exactly the same way that foreign currency is. It’s therefore exempt from value added taxes. The British legislature were one of the first to publish clear regulation, and directives. They did so in 2014 stating: “bitcoin may be held as an investment or used to pay for goods or services at merchants where it is accepted.”

Going one step further is Japan. Earlier this year, the country recognised Bitcoin as legal tender, and legislated on cryptocurrency exchanges. This essential green-light from the Japanese government is helping to cultivate a rich hive of entrepreneurial activity, and it’s no surprise that Japan are now trading volume leaders in the digital currency space. There are also strong indicators that Vietnam are preparing to do the same.

As more countries attempt to draft their own cryptocurrency regulation for themselves, it’s likely that this diversification of legislative approaches will continue. With some of the largest economies on the planet having already made their feelings about crypto known, and the price still creeping towards that illustrious $5,000 psychological barrier, it’s hard to imagine the value of the network depreciating in any catastrophic fashion any time soon. That said, this is crypto and after a while in the space, nothing really comes as a surprise anymore.

 

 

 

 

 

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Cryptocurrencies may soon rule the United States – Mexico remittance market. As President Donald Trump reiterates his vision to build a wall between the two countries, United States may look for ways to recover a portion of expenses from Mexico either through increased taxes or remittance blockades.

Mexico may not willingly bear its fair share of costs as it is not comfortable with the wall separating both countries. It might lead to the United States making good on the promise made by its president-elect during the election campaign and after assuming office.

However, such a move by the United States will not only sour the relationship between both the countries but also puts the United States in a bad light. But for those who have been regularly sending money back home to Mexico from the United States, it can be disastrous. They will be left with no other option but to opt for alternatives.

Bitcoin and other cryptocurrencies are the most viable alternative methods of remittance that one can adopt in case these fund transfer restrictions become a reality.

Mexico receives a considerable sum of revenue in the form of remittance. In 2016, total remittance received by Mexico stood at around $24.6 billion which is more than the $23.2 billion revenue it generated through oil exports in 2015.

Earlier this month, Donald Trump was quoted by a news outlet saying,

“They [Mexico] will reimburse us for the cost of the wall. That will happen, whether it’s a tax or a payment — probably less likely that it’s a payment, but it will happen.”

Following Trump’s statement, the President of Mexico Enrique Pena Nieto countered saying

“We must assure the free flow of remittances, an invaluable contribution to national development and indispensable for millions of Mexican families.”

President Donald Trump’s recent executive order permitting the wall construction has heated up the atmosphere in both countries. The potential blockade on remittance combined with weakening Mexican economy can end up creating an economic emergency in the country. The use of cryptocurrencies at this crucial moment for both remittance and day-to-day use can help Mexicans successfully overcome the repercussions of US blockade and economic slowdown.

The use of cryptocurrencies for remittance is not a new thing. It remains the most efficient and economical mode of fund transfer between people in different countries. Its implementation during troubled times will not come as a surprise to many. If things were to go south for the country, demand for Bitcoin would soon grow in the Mexican market, which may further push the price of Bitcoin. Under the circumstances, the coming days seem bright for Bitcoin.

Ref: CNN Money | Image: NewsBTC

Bitcoin, since its introduction in 2009 has come a long way to compete against US dollar and other prominent fiat currencies of the past. Banks and financial institutions who were the gatekeepers of everyone’s wealth now feel threatened as they find themselves powerless in front of the new digital currency. Bitcoin is completely independent and pseudonymous, taking central bank and other government organizations out of the picture. As if that is not enough, there is no single entity that controls bitcoin.

The decentralized nature combined with security, speed and low costs of transaction has helped bitcoin attain the status of alternate currency in the global economy. Bitcoin has become the symbol of financial liberation and independence where the trusted third party for transactions are individuals and not banks or governments with their own agendas. Bitcoin is making the concept of one world- one currency true rendering the whole foreign exchange structure obsolete. It is only a matter of time for the bitcoin network to gain the required threshold of users to attain mainstream status where it can operate completely independent from fiat currencies or exchanges.

If that day arrives, governments will lose complete control over economy and taxes, banks will be left obsolete, conventional payment processor who depend on huge transaction fees for making profits will be forced to shut shop as transaction fees over bitcoin network is negligible compared to them. In a nutshell, bitcoin’s ascent threatens to diminish the influence of all powerful entities with self-serving interests. By doing so, it hopes to give the power back into the hands of individuals.

The governments and banks wouldn’t want that to happen and they would do anything to stop bitcoin from becoming popular. Hence, there are always waiting to jump in and interfere with the operation of digital currency transactions whenever they get a chance. Some of the best examples can be the recent crackdown by Australian banks on the country’s bitcoin exchanges where they closed their accounts without offering any explanation, United States introducing strict regulations on bitcoin businesses, introduction of multiple taxation regimes, Russia imposing jail term for up to four years for exchanging bitcoin to ruble and the latest attempts of European Union to impose strict regulations on bitcoin and other alternative payment methods without having any evidence of its use by terrorists.

Most of these decisions are taken in haste, and the due process is often ignored by both institutions and authorities, as long as these governments, banking and financial entities perceive bitcoin has a threat to their existing way of operation, the digital currency will always have a bulls-eye on its back.

Reference:
United States Bitcoin Regulated by CFTC, IRS, FinCEN, SEC and What Next?
Russia’s Ministry of Finance Drafts Law to Penalize Bitcoin Users and Businesses 
EU Taking The Reins Over Bitcoin & Digital Currencies To Combat ISIL 
Australian Banks Discontinue Services to Bitcoin Companies
We must regulate Bitcoin because...?

Genesis Mining, a leading cryptocurrency cloud mining provider, has launched a nationwide outdoor advertising campaign in the United States with the aim of raising awareness on the potential of digital currency Bitcoin, and what it is capable of providing to the world.

The campaign was launched in Southern Florida, San Francisco, Washington DC, Chicago, and Boston and in the next three months, it is expected to cover over 40 cities across the United States.

Founded in the year 2013, Genesis Mining is a leading advocate of the Bitcoin and was one of the earliest companies which offered cloud mining services.

The company claims that all its solutions are designed to help large-scale investors besides cryptocurrency experts and others.

As part of its goal, it also states that it is out to provide the most efficient and reliable mining rigs for rent.

What the campaign sets out to achieve is good news for the virtual currency market at large, as an increased awareness is needed to counter apprehensions that people have over the Bitcoin.

Genesis Mining co-founder and CEO Marco Streng also felt that people get “caught up in what the experts have to say about innovations.”

Terming the Bitcoin as one of the “most exciting innovations the world has ever seen,” Marco said that, it was only just beginning.

He further stated that “we launched this campaign to remind people that if you look through history, so-called “experts” are not always right about the future. The goal is to open people’s minds and let them decide for themselves what to think.”

This Bitcoin advocacy campaign would involve taxi advertising, billboards, and guerilla street marketing.

But what perhaps makes the campaign interesting is that it will features quotes from experts who had made egregiously false predictions about disruptive innovations.

These predictions were made by former leaders of major international corporations who spoke their minds on innovations such as the telephone, film, and the automobile.

 

The past two weeks have been good for bitcoin. Thanks to various factors the price has been keeping its head above the $260 mark and fluctuating in the $270s until today. Today the price has broken the $280 ceiling to reach over $281.

The considerably stable bitcoin price combined with the not so significant improvement in the world economy over the week has led to increased trading activity. On Thursday Huobi, the largest Chinese bitcoin trading platform reached a record trading volume of over 770000 bitcoins, states the exchange in an interview on CoinTelegraph. Bitcoin exchanges are reporting an increased number of users on their platforms as well. The increased trading, especially in China comes around the time the Chinese government has further cut its interest rate by 0.25 percentage points. The rate cut is fueled by weakening of the economy with the country’s economic growth hitting a 6 year low of 6.9%. (As reported by The Guardian).

Meanwhile the other economic driving force, United States has its economy ranked at D+ at the moment (according to CNBC’s analysis). The outlook remains at an 18 month low among the people, however the dollar is showing signs of a slow recovery. With the US economy being considered as one of the key drivers of the global economy, loss of confidence in USD will drive investors to alternate commodities like bitcoin which incidentally happens to be the best performing commodity at the moment.

While this trend may continue for some more time, the fate of the Chinese economy will depend upon the reaction of the people to the Chinese Communist Party Meeting that is scheduled to be held on the 26th of this month to present and discuss a 5 year plan for the economy (CNN Money report). The main purpose of this meeting is to assure the world about Chinese economic stability and growth potential in the near future. Currently China is being the biggest driving force behind the strong bitcoin price and will continue to be as long the investment spree among the Chinese continues.

However, with China cutting interest rates, the European Stock Market has gotten strong and a further trend will strengthen the European Market. It may have a small impact on the bitcoin price trend. As we have earlier mentioned, bitcoin price has a pretty good chance of reaching the $300 mark and provided the trading spree on Chinese exchanges continues.

The US presidential candidate Rick Perry seems to have won the votes of Bitcoin community by declaring his softer stance towards Bitcoin. In an interview with The New York Observer, he declared that he is in favor of relaxing regulations on bitcoin to an extent that it doesn’t hamper innovation and allows smooth operation of legitimate digital currency based businesses.

READ MORE: US Presidential Candidate Rick Perry Shows Support for Bitcoin

Rand Paul, the Kentucky senator and one of the contender for presidential elections in the United States first made waves in Bitcoin community after he announced that he will be accepting Bitcoin for campaign donations. Following Rand Paul, few other presidential candidates also started accepting Bitcoin donations for campaign funds.

READ MORE: Presidential Candidate Rand Paul Impresses at the NY Bitcoin Event

The increasing acceptance of cryptocurrencies as a form of financial instrument by US presidential candidates has helped the well-known digital currency gain some credibility among the masses in United States and beyond.

The Bitcoin scenario in different countries across the world shares one common challenge and that is increased mass adoption among people. While there are groups of people who live, breathe Bitcoin and are prepared to vouch for it at any time, they are very few in number. Majority of the population are still skeptical about Bitcoin, some have doubts about its credibility, few about legitimacy, some can’t warp their head around the fact that Bitcoin doesn’t have any central governing body like a central bank to take care of it and some think it is too much of a risk to take a hands on approach on Bitcoin.

The fact that elected representatives of the government are using the cryptocurrency as an option to receive donations and speaking publicly about it on television, news media etc., has increased the confidence on the digital currency among the masses in the United States. Those who have been skeptical about Bitcoin will now be convinced to explore further and start using it, especially after hearing to the potential president of the country speaking about it.

Even the community has something to be happy about, especially after the New York BitLicense fiasco. With people who understand Bitcoin or at least have used it either directly or indirectly running the government, the Bitcoin community can expect more realistic and reasonable regulations.

Bitcoin is the digital currency of the people, irrespective of region, religion, sex or politics. The recent bitcoin transaction between the United States and Cuba has proven that bitcoin, true to its essence is indeed a global currency.

The aforementioned transaction happened earlier this month after considerable improvements in the diplomatic relations between both the countries took place. Republic of Cuba, the largest island in the Caribbean was subject to economic sanctions by the United States for over 50 years before showing signs of thawing. There has been few developments in the relations between the United States and Cuba which may soon result in the former lifting the economic embargo against the latter.

While the overall outlook looks positive, it will still take a few months before Washington takes the final call on the Cuban embargo. At present, the diplomatic relations have resumed with both countries opening their respective consulates in the Republic of Cuba and United States. These developments have encouraged Cuban emigrants in the US to visit their families and friends back home. Even the first legal bitcoin transfer from the United States to Cuba was made during one such visit.

Fernando Villar, the founder of BitcoinCuba came up with this idea to transfer bitcoin from the United States when he was about to visit Cuba. According to Fernando (as told to one of the cryptocurrency news sitess), he thought that it will be cool if someone can transfer bitcoin from the US to Cuba using public Wi-Fi. The transaction happened between Chris Groshong, the CEO of CoinStructive and Fernando Villar. The bitcoin appears to be sent by Chris from San Diego using Airbitz wallet while Fernando was travelling in Cuba. Fernando received the bitcoin over Cuban state run Wi-Fi network called Nauta. The transaction goes down into the history books as the first documented legal bitcoin transaction between the United States and Cuba.

The occasion is also a special one for Airbitz. It can be compared to the best ever publicity stunt any company can have. Airbitz a relatively new bitcoin wallet startup which won the Bitcoin Expo hackathon in Canada last year. Airbitz has recently raised $450,000 in funding from Block26, a relatively new blockchain venture fund.

United States Patent and Trademark Office (PTO) recently rejected a patent application (Reg 86135516) for the trademark ‘Bitcoin’ filed by Urban Trend LLC, a Californian household product company.

Bitcoin trademark

The motion came to rest as a part of default judgment, when Urban Trend failed to submit an answer to the patent’s opposer Russ Smith, the owner of Atlantic City Bitcoin, LLC and HELP.ORG LLC. In his application, the opposer had described himself as the registered owner of the trademark ‘MILLY BITCOIN’ (Reg 4435599) and had accused Urban Trend of committing a fraud during the application for registration.

“Defendant [Urban Trend LLC] replied to an office action requesting the significance of BITCOIN to the application,” the motion read. “Defendant replied that BITCOIN had no significance. Defendant failed to describe that “BITCOIN” merely describes a characteristic of applicant’s goods. Namely “BITCOIN” referred to the fact that the items would be labeled as logos referring to the Bitcoin currency.”

Russ Smith’s motion further pointed the similarities between his and defendant’s business profiles that will end up creating confusion among customers.

Upon the successful notice of opposition, the PTO office sent directives to both Smith and Urban Trends, attached with a time schedule that asked the latter to submit its response by January 26th, 2015. The defendant however failed to answer any of the accusations mentioned in the lawsuit, despite being aware about it. Smith thereby entered a legal position to request for default judgment, a step that took the case to his desired conclusion.

The trademarking of Bitcoin and related products is not a new thing in the industry. The Bitcoin Foundation has previously reported that there are at least 35 marks alone in the US that contains the word Bitcoin in it. At the same time, the non-official Bitcoin advocacy group also opposed the idea of trademarking the digital currency.

“It is a generic term like the terms used for other currencies such as “dollar”, “euro,” “yen,” etc,” it had stated. “The Foundation is committed to doing what it can to protect the term “BITCOIN” for public use.”