Governments appear to be embracing Cryptos

The attitude to Cryptocurrencies has been hostile as there had been concerns that Crypto currencies were potentially being used for nefarious activities, such as terrorism and money laundering, by ‘bad actors. Bitcoin was often the payment of choice on the Silk Road, enabling cross boarder payments outside the traditional banking systems.

Countries where Bitcoin is legal, illegal or restricted

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Source: Coin Dance

According to Coin Dance, although Bitcoin is only illegal in relatively few countries world-wide, in 2020 we have, however, seen various jurisdictions looking to clarify and update their stance towards Cryptos.

In Europe, as of 10th January 2020, any organisation dealing in Cryptos will now need to comply with the 5th AMLD (Anti Money Laundering Directive and will need to ensure that, although Cryptos are not themselves regulated (like expensive items such as works of art or classic cars) the organisations themselves will need to comply with 5th AMLD when buying or selling of these types of assets.

In 2018 in India, The Reserve Bank of India (RBI) banned companies in the financial sector from dealing in Crypto currencies. This ban has now been overturned by India’s Supreme Court (in early March 2020) and this has led to a slew of Indian exchanges and platforms offering access to Cryptos paid for in Rupees (according to Coincrunch). Coincrunch actually stated, “Don’t worry, it is not illegal to trade crypto-assets in India”, with CoinDCX co-founder and Chief Executive, Sumit Gupta, adding, “With renewed accessibility and convenience in purchasing cryptocurrencies, we believe that this change will have a dramatic effect in accelerating crypto adoption in India”. Time will tell if allowing 1.3+ billion people to be able to buy Cryptos will mean there is a significant increase in demand for this asset class!

The News Asia has reported that South Korea is also warming to Cryptos, as its National Assembly is making the trading and holding of crypto currencies a legal activity. Those involved with dealing in cryptos will be legally required to ensure they have carried out thorough AML/KYC checks to prevent money laundering, thus guaranteeing that the clients they deal with are linked to a verifiable single bank account (with which they may withdraw and deposit fiat currency from and to an exchange). Also, companies engaged on offering Crypto trading services must obtain an information security management system (ISMS) certification by September 2021. At its peak in December 2017, in South Korea, a third of its working population had a crypto accounts. Therefore, will we see a surge of interest for Cryptos again now the legality of buying and selling Cryptos has been clarified?

In the USA, Trump is less than positive about Cryptos, although maybe this stance will soften as the elections in November 2020 approach; on many issues Trump has been known to change his mind!

Irrespective of Trump and despite what would appear to be a softening stance towards Cryptos, in many parts of the world it is still difficult for companies to find a bank that will offer them full banking services. Although, hot on the heels of Coinbase and Baanx there is another company, Crypterium, a crypto fintech firm led by Visa’s former General Manager for Central Europe. Crypterium is now offering a Visa debit card that will allow its clients to buy and sell cryptos and then use the Visa global network to spend and use their cryptos.

All this will be interesting to observe as we start to see Central Bank Digital Currencies being issued and regulators gaining a better understanding about Digital Assets. Providing Cryptos holders and traders are subject to full KYC and AML scrutiny, will this new asset class be more fully embraced?

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