After nearly 10 months since their landmark decision to ban all types of ICOs and cryptocurrencies, The Republic of China has come out with a statement which shows signs of a retrace. A public domain working paper, compiled by the China Banking Regulatory Commission (CBRC), has put forth suggestions to banking institutions and financial services to issue licences and permissions for crypto-related activities and trade. This will help them function in compliance with state laws and regulations.
However the working paper also mentioned that its initial set of frameworks will not be limited to wallet and cryptocurrencies, but will rather highlight the regulations for all types of distributed ledgers.
In a Bloomberg exclusive, the CRBC’s comment on the paper was absolute, though still murky. A portion of the statement was:
“Currently, any capital transaction that relates to distributed ledger accounts, blockchain, cryptocurrency and its derivatives, ICOs and exchange operations should all be regarded as financial services. Therefore they must be put under relevant financial regulatory frameworks so that they can operate legally with a license”.
Though in hindsight, it is important to mention that local papers have reported a certain sense of disparity between the members regarding the country’s current stance.
The country’s backtrack came in due to the surge in crypto-activities across the entire Asia Pacific region, over the last one year! The working paper was created with the sole focus on the study of cryptocurrencies and digital wallets, though it was unaligned on that front.
But the legal troubles are far from over for the infant technology!
In a very recent statement from the Federal Bureau of Investigation (FBI – USA), the department of homeland security is currently in pursuit of 130 cases involving cryptocurrencies in the United States. The crimes are various, stemming from activities pertaining to human trafficking, arms & ammunitions, drug trade, extortion and terrorism. These activities use cryptocurrencies and digital wallets to move money across international borders, which further only highlights the centre’s approach to electronic currencies.
The Securities and Exchange Commission (SEC) in the U.S had warned regulators and lawmakers about the irregularities and insecurities of cryptocurrencies. There was nationwide ban on ICOs and investors were cautioned on the risks of ICO investing. They also mentioned that any form digital currency would not, and shouldn’t be, considered as ‘Legal Tender’.
The nation clamped down further! An organised meeting held by the Commodity Futures Trading Commission (CFTC), which was the first regulator in the United States to allow cryptocurrency-institutions to trade publicly, was shut down by the department of justice.
National Treasury Secretary Steve Mnuchin, a press conference, came out to say that he supported fiat-printed currencies over digital currencies ‘Any Day’. On January 25th 2018, at the World Economic Forum, Mnuchin mentioned that cryptocurrencies were a status of ‘Real Concern’, and that all avenues will be explored to make sure they aren’t used for illegal campaigns.
While on a South Asian tour, Deputy Director of the U.S Treasury Sigal Mandelkar, had commended the nations of China, South Korea and Japan for regulating cryptocurrency trade whilst keeping a stern watch over them. She quoted, in a press conference, that “We feel very strongly that we need this kind of regulation all over the world”. The ‘We’ she was referring to is the United States of America.
Though certain nations remain relatively confused and muddled regarding the advent of cryptocurrencies, the rest of the world has begun gearing up for the race. In Singapore alone, the ICO-Blockchain industry is set to touch the 1 Billion USD mark.
Only time and advancement will truly put these notions to rest!