Bitcoin has been consistently in headlines for months now. As such, governments have been making statements and trying to make sense of how they should regulate bitcoin and other cryptocurrencies. It is not an easy legal definition. Regulation of cryptocurrencies will only be made harder by national approaches and divides.
According to Reuters, the Israel Securities Authority (ISA) is considering banning companies with major involvement in bitcoin trading from the Tel Aviv Stock Exchange (TASE). The head of the ISA, Shmuel Hauser, said in a business conference on Dec. 26: ‘If we have a company [and] their main business is digital currencies, we would not allow it. If already listed, its trading will be suspended.’ This shows major distrust of the currency.
In South Korea, the government has announced new legislation prohibiting anonymous accounts and increasing surveillance of cryptocurrency exchanges. South Korea is the world’s third largest crypto market, after the US and Japan. The effect this announcement had on trading value - a 12% in bitcoin - shows how uncertain the cryptocurrency can be.In contrast, EU official Pierre Moscovici has stated the Commission is not looking into regulating bitcoin at this point. ‘At this stage, we do not consider [bitcoin] as an alternative currency,’ Moscovici said.
Globally, bitcoin is still not uniformly defined. This makes regulation difficult to apply and has allowed cryptocurrencies to exist largely outside financial regulation. However, if cryptocurrencies seek legitimacy and respect alongside fiat currencies, it will be necessary to comply with regulation.
The last quarter of 2017 saw many governments make statements as to the regulation of cryptocurrencies. Yet, a more global approach might be more practical given its decentralization by blockchain and the increasingly international nature of trading markets.
Grace Appleford, Research Analyst for Holland FinTech.
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