Following China's ban on Initial Coin Offerings back in September, South Korea (which was previously seen as one of the markets that could benefit the most after the Chinese chose to forbid ICOs) took the exact same path, and hence banned ICOsas well.
The exact opposite position was recently adopted by Taiwan, and a bit earlier - by Japan. Despite of the collapse of Mt.Gox, one of the biggest Bitcoin exchanges at the time, Japan has chosen to embrace cryptocurrency, and thus has recognized Bitcoin as a legal tender.
Despite harsh lessons in the past, Japan has chosen to embrace cryptocurrency.
In addition to this, the Japanese regulators (The Financial Services Agency) have approved 11 companies to operate cryptocurrency exchanges. Due to favorable regulation, Japan is now emerging to being the leading Bitcoin trading hub.
Looking at the Bitcoin trade volume , we see that Japan is an obvious leader -- JPY now accounts for more than 60% of the market share in Bitcoin trading. This is more than 2.5 times bigger share that USD holds.
While neighbors China & South Korea are banning ICOs & cryptos, Japan is emerging as the global superpower when it comes to the cryptonomics.
The Global ScaleLooking from the perspective, one can fairly say that more and more countries are pouring resources so that they could properly understand Bitcoin and its possible implications. Yet, when it comes to regulation, much is still needed to be done.
The graph below (source: BitLegal) is a very illustrative map of Bitcoin regulation around the globe. The GREEN color resembles permissive regulation, YELLOW denotes contentious, GREEN is for hostile, and DARK GREY is for the unknown.
Although majority of the European states have a favorable regulation towards Bitcoin, I find it really funny (and sad at the same time) that European Central Bank (ECB) has no clear guidance and position regarding cryptocurrencies yet (yet because I still hopefully believe that that day will come).
Proper regulatory framework is still very much needed globally with regards to Bitcoin.
Last week Mario Draghi, head of the ECB, has said that the agency does not have the authority to regulate Bitcoin and other cryptocurrencies.
Really? Bitcoin is present for more than 8 years, and this is all what you have figured out? Well done!
What do Regulators Think?However, Mario Draghi is not the only one in this context. In fact, many central bankers possess the exact same or very similar views.
So, what do they actually think? The below pretty well
summarises their current ideas:- Bitcoin is too small today to affect our current monetary policy. Therefore, it's not an issue yet. If it becomes one - we'll start protecting the dollar and the euro.
- There already are formalised institutions for different Bitcoin markets to regulate - such as banks, exchanges, payments etc. (for Bitcoin banks, exchanges etc.).
- We don't think people want centralized institutions to be taken out of their lives.
- The whole idea of peer-to-peer commerce is flawed. People need central authorities to ensure trust.
This list can be easily extended, but for the simplicity sake, let's leave it like this. You got the idea.
Bringing it all togetherSo, where does this all leave us? Essentially, with the same conclusion as with any regulatory approach - regulation is re-active rather than pro-active, and there is very little we can do about it.
In absolute majority of the cases, regulation is re-active rather than pro-active. And there's very little we can do about it.
Of course, there are countries (and thus regulators) that are examples to follow. One obvious case is previously mentioned Japan. Due to pro-cryptostance, it is now the leading player in the cryptoeconomy. Other innovators will hopefully follow soon.
However, majority of the regulators still don't get the underlying idea of Bitcoin. They still believe that centralised authorities are essential to build trust.
But the decentralised trust lies in the technology and code.You most definitely might not like it. But there is very little you can do about it.
Because decentralised systems cannot be controlled by centralised powers.---
Linas is a business developer and FinTech strategist who strives to make an impact and change the World. At the moment, Linas holds a strategic position at Contis, the leading service provider of alternative banking. In addition to that, Linas also advises TokenDesk & MicroMoney, one of the most promising ICOs to be launched very soon.
Read article : https://medium.com/@TokenDesk/our-adviser-linas-beliūnas-examines-how-regulators-see-bitcoin-bb396a8dd5fb
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