Russia has decided to officially regulate cryptocurrency following high level talks between President Vladimir Putin, government officials and business leaders. The move came shortly after a central bank official confirmed that online bitcoin exchanges will be banned.
Russia Opts for Regulation
Instead of a blanket ban on cryptocurrency trading, Russian officials have decided to control the mining and circulation of digital assets. Officials reached the decision following a meeting earlier this week between Putin, Finance Minister Anton Siluanov, central bank chief Elvira Nabiullina and the CEO of Qiwi payment system Sergey Solonin among others.
“We have agreed on the following: the state should regulate the process of issuing cryptocurrencies, the process of mining, the process of circulation,” said Finance Minister Anton Siluanov, as quoted by RT.
Russian authorities announced earlier this week they would join a global crackdown on cryptocurrency. President Putin said bitcoin and other cryptocurrencies pose “serious risks” from the perspective of fraud and money laundering. He later clarified that Moscow intends to supervise the market rather than impose an all-out ban on digital currency use.
“We need, based on international experience, to build a regulatory environment that will systematize relations in this area, to protect, of course, the interests of citizens, business, and the state, to provide legal guarantees for working with innovative financial instruments,” he said.
According to the Proecutor General’s Office, cryptocurrencies are considered money surrogates, which makes their turnover a criminal offense. It is not yet clear how authorities will proceed with regulating the market.
Hopes of Renewed China Trade Boost Bitcoin
The value of bitcoin surged to new highs on Thursday amid hopes that China will lift trading restrictions on cryptocurrency. The world’s second-largest economy became the center of digital currency trading prior to last month’s blanket ban on the asset class.
News reports out of Xinhua suggest Beijing is looking to reinstate cryptocurrency trading under a new regulatory framework. Such a move would work in bitcoin’s favor, possibly leading to further price increases.
Kazakhstan Is About to See Its First Cryptocurrency Backed by Fiat Money
Cryptocurrency is coming to the Republic of Kazakhstan, according to a recent press release from the Astana International Financial Centre (AIFC), a developmental body established by President Nursultan Nazarbayev.
Kazakhstan Gets Its First Cryptocurrency
Astana is teaming up with Exante Investment Company to develop the Eurasian country’s cryptocurrency market. The announcement came by way of memorandum, where Exante agreed to cooperate in spearheading AIFC regulation pertaining to digital assets.
Exante is an investment services company specializing in Direct Market Access (DMA), an electronic trading facility that gives investors entry into order books. The company has offices in at least seven jurisdictions, including Moscow, Dubai, Riga and Cyprus. Exante has several blockchain projects under its portfolio.
A public-private partnership to streamline cryptocurrency regulation is certainly a unique proposal. Governments around the world have taken a more adversarial approach to digital assets, with some issuing outright bans and others seeking to limit the spread of blockchain-powered currency.
According to the AIFC press release, “leading financial regulators are actively working to create favourable conditions for the development of financial companies” in hopes of transforming Astana into a global fin-tech hub.
Kazakhstan isn’t the first country to express interest in launching its own digital currency. This past summer, Estonia proposed its own state-backed cryptocurrency. Japan has also signaled interest in launching its government-backed digital asset, called J-Coin. It also appears that Russia is set to move forward with the CryptoRuble, according to the TASS news agency.
Kazakhstan’s entry into the cryptocurrency market will be backed by Stasis, Exante’s new blockchain platform. Unlike other digital ledger projects, Stasis is backed by fiat money. This setup is intended to facilitate transactions between cryptocurrency and traditional finance.
Antoly Knyazev, co-founder of Exante, has joined several working groups on cryptocurrencies, having held meetings with the governments of Malta, Cyprus and Kazakhstan. This suggests that the Stasis project, or others like it, could become more common in the future.
Stasis has been described as a transparent cryptocurrency because it is tied to physical assets and backed by fiat money and bonds. The cryptocurrency enables instant payments at lower fees and increased transaction speed. The platform has also been audited by the government of Kazakhstan.
Knyazev expects the market cap for Stasis to reach 2-3 billion euros or their equivalent.
With assistance from Anastasiya Ernays.
Featured image courtesy of Shutterstock.
Japan’s Mainstream Acceptance of Cryptocurrency Might Not Apply to ICOs
Japan has quickly become the model for early adoption after regulators officially recognized bitcoin and other cryptocurrencies as legal tender. However, the same leeway may not apply to initial coin offerings (ICOs), the controversial but insanely popular crowdfunding model that has raised over $2.3 billion this year.
Koji Higashi, cofounder of IndieSquare and prominent figure in Japan’s cryptocurrency scene, believes a ban on ICOs is within the realm of possibility. Several news outlets, including Forbes, have quoted Higashi as saying that a ban on on ICOs is a “definite possibility.”
Japan, which now trades nearly two-thirds of bitcoin, still faces a tentative regulatory climate, says Higashi. In a country known for conservative bureaucracy, regulators could start cracking down on new coin offerings as soon as problems arise.
The ICO market has already had its fair share of scams, with fraudsters copying other public raises and presenting them as their own. Earlier this month, Hacked.com reported extensively about ToTheMoon, an ICO that ripped off Giga Watt right down to its whitepaper.
Investors looking to cash in on the next big thing are especially vulnerable, says Higashi. While not all ICOs are scams, many of them are clearly looking to capitalize on the hype.
The State of the ICO Industry
Token raises have generated billions of dollars in 2017. In the absence of regulation, the blockchain community to create a standard legal agreement for the ICO market. This effort led to the creation of the Simple Agreement for Future Tokens (SAFT) project, which attempts to standardize public raises by vetting ICOs and investors.
The open source movement is uniting technology companies, legal experts and members of the blockchain community to converge on a framework that gives rise to a self-regulated cryptocurrency market. – Hacked.com (Sept. 21, 2017).
It remains to be seen whether SAFTs can step in to fill the void, or whether governments will move in to control the market. Blanket bans on ICOs have already been issued in China and South Korea.
Featured image courtesy of Shutterstock.
Information on Russia’s Regulation of Cryptocurrency Surfaces
The Russian Federation has officially decided to regulate the circulation and mining of cryptocurrency, CCN reported Tuesday.
Russia Outlines Scope of Crypto Regulation
A meeting of Russian officials that included President Vladimir Putin concluded that both the supply and mining of digital assets will come under the purview of central regulators. According to TASS news agency, finance minister Anton Siluanov stated that the government should “control the process of cryptocurrency emissopm and its circulation.”
According to reports, Russians will not be allowed to mine cryptocurrency, a process that will be maintained by a central authority. Holders of the digital asset will be allowed to exchange it for Russian rubles at any time.
Last week, Russian authorities said they would move to block cryptocurrency exchanges. It later emerged that the Kremlin decided to pursue a regulatory clampdown on the digital asset class rather than a blanket ban.
Several nations have already chimed in on the cryptocurrency debate, each arriving at different conclusions. For example, cryptocurrency is a recognized payment method in Japan, but has been blocked outright (at least for now) in China. South Korea’s approach is somewhere in the middle: it has banned initial coin offerings (ICOs), but not cryptocurrency trading. The regukatory environment will further evolve as nations come to grips with the digital currency phenomenon.
Rise of the ‘CryptoRuble’
Earlier this week, Russian communications minister Nikolay Nikiforov said that a state-issued ‘CryptoRuble’ is set to be unveiled. Several news outlets, including CCN and Investopedia, reported the matter.
Nikiforov pointed to neighboring Kyrgyzstan as a chief motivator for moving swiftly on this matter. The Eurasian Economic Commission member is planning to launch its own gold-backed national cryptocurrency.
Despite all the regulatory concerns surrounding digital currency, Russia views it as a potential opportunity to diversify its economy away from oil.
Featured image courtesy of Shutterstock
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