‘A Framework’: UK Issues Cryptocurrency Guidance

The regulatory framework for Bitcoin and other digital assets continues to … as much regulatory pushback as Facebook’s proposed virtual currency.

The regulatory framework for Bitcoin and other digital assets continues to evolve globally, albeit slowly.

The U.K. financial services regulator, the Financial Conduct Authority, finalized its guidance on crypto assets in July, clarifying which tokens fall under its jurisdiction.

The recent announcement from the FCA classifies cryptocurrencies such as Bitcoin and Ethereum as “exchange tokens.” They are not regulated, although anti-money-laundering rules still apply.

The FCA has proposed banning the sale of crypto-derivatives to retail consumers and is proposing rules to address the sale of derivatives and crypto exchange-traded notes.

Three Expert Takes

Aries Wang, CEO and co-founder of Bibox, a digital asset exchange, said in a statement: “The FCA is by no means driving regulatory change but as an influential force in the European market, we foresee the typology and guidance being rolled out as an industry standard. The paper critiques a supposed inherent intention to remove token holder rights in the case of what the FCA categorizes as ‘exchange tokens,’ the umbrella term for cryptocurrencies, crypto coins and payment tokens.”

Charles Phan, the founding engineer of Interdax, a cryptocurrency exchange, said: “Given how the FCA has listened to the industry about which tokens to regulate, actively seeking industry feedback, it is unfortunate they have taken a blanket approach regarding crypto derivatives.”

Crypto derivatives are a “field ripe with innovations benefiting the retail investor,” and it would be unfortunate for U.K. firms to be excluded due to events experienced in the regulated financial world, he said.

“While the guidance seems sensible and aligned with the approach taken in several other countries, their proposed ban of derivatives built on top of the ‘exchange tokens’ seems excessive, ill-suited and could simply push innovation overseas,” he said.

“These products will continue to thrive in the coming years to potentially become the most valuable niche of the crypto ecosystem, replicating what happened in the traditional markets. If the FCA is too stringent on in-demand crypto assets, it risks further isolating itself from a rapidly growing and highly fruitful market.”

Iain Wilson, advisor to NEM Ventures, the venture capital and investments arm of the NEM blockchain ecosystem, said in a statement: “Repositioning the token taxonomy to distinguish security tokens from e-money tokens is positive; regulation for securities should be structured differently from payments,” he said.

“The overall guidance provides a framework for distinguishing between regulated and unregulated tokens, as well as detailing the firm and individual activities that fall within the scope of FCA authorization. Whilst some survey respondents continue to look for global regulatory harmonization, we feel that this is unlikely in the foreseeable future.”

Facebook, Walmart Jump On Digital Asset Bandwagon

In the U.S., Facebook, Inc. (NASDAQ: FB) and Walmart Inc (NYSE: WMT) have both made an extremely bold move into the cryptocurrency space with the planned launch of digital coins.

This has drawn interest from regulatory authorities in the U.S.

In July, Facebook faced scrutiny in a Senate hearing over its plans for the Libra cryptocurrency.

Walmart Coin

In contrast, the reaction to the Walmart Coin has been more agreeable.

Bloomberg reports that Cowen analyst Jaret Seiberg has said that Walmart’s proposed digital coin should not face as much regulatory pushback as Facebook’s proposed virtual currency.

Libra and Walmart’s crypto proposal differ in scale, the analyst said: Facebook has global intentions that do not appear to be shared by Walmart.

CoinCorner CEO Danny Scott said Walmart has filed a patent for a U.S. dollar-pegged stablecoin.

“While the publicity is obviously good news for the crypto industry, we believe it is a waste of time and resources for these companies — something that will eventually show as time passes. There are already a number of decent stablecoins out there, all doing exactly the same job,” he said.

Related Links:

As Facebook Prepares To Launch Libra, Regulators Are Watching

Visa Will Acquire Payments Portfolio From Rambus

Related Posts:

  • No Related Posts

Verrency and Coinify partnership a ‘game changer’

By partnering with Coinify, Verrency is now able to enable banks to offer their customers virtual currency and token usage.” And the use of existing …

Verrency and Coinify are teaming up to enable customers to spend virtual currency via banks’ existing payment cards.

Consequently, banks can offer customers the ability to use virtual currency at any merchant.

Specifically, the partnership empowers banks utilising Verrency’s middleware platform to integrate virtual currency funding sources and digital wallets. Moreover they can do so within their existing payments rails.

At the same time, it avoids the need for customers to use specially issued prepaid or debit cards.

Instead, customers can make payments anywhere using virtual currency via existing payments products, including their physical cards and digital wallets.

The service uses Verrency’s high-performance value-added payments technology layer. And so a bank can route payments to different funding sources authorised by the bank. This includes custodial or non-custodial wallet containing digital assets.

Coinify supports the selection and connection of the wallet infrastructure, which may be either internal or external to the bank.

Verrency and Coinify partnership a ‘game changer’

Verrency CEO David Link says that the partnership is a game changer. In particular, it will increase the utility of token-based assets among major financial institutions.

“Virtual currencies are transitioning in the next few years from being speculative investments into a smaller number of mainstream assets.

“This will see more government or fiat-backed stable tokens, or even tokens simply as a payment element. So it is critical that banks have the technology in place to actually allow the usage of such virtual assets.”

He adds that it is crucial that this runs across bank’s consumer-centred legacy payments rails. Mainstream usage of tokens or virtual assets will not occur by connecting the merchant-side of the equation.

“It simply will take too long to achieve ubiquity, without which there will be no significant usage. By partnering with Coinify, Verrency is now able to enable banks to offer their customers virtual currency and token usage.”

And the use of existing debit and credit cards means that banks avoid costly infrastructure overhaul.

Verrency capital raising

Payment innovation fintech Verrency is headquartered in Melbourne.

Verrency’s API platform provides an overlay to legacy infrastructure. This enables banks to upgrade their customer offerings with digital services including auto-rounding, real-time budgeting notifications and instant loyalty rewards.

In June, Verrency raised A$10m in funding ahead of planned international expansion.

Verrency clients include Emirates NBD and Australian digital challenger Volt.

Virtual currency payment provider Coinify is headquartered in Denmark.

2e83c1df591eac268536f94801809666f6703c8f - Verrency and Coinify enable virtual currency spend at any merchant

Related Posts:

  • No Related Posts

Czech Republic Plans Tougher Regulations for Crypto Exchanges

Czech Republic is on track to exceed the EU’s directive on cryptocurrency firms, to enhance the country’s Anti-Money laundering (AML) policy, local …

Czech Republic is on track to exceed the EU’s directive on cryptocurrency firms, to enhance the country’s Anti-Money laundering (AML) policy, local newspaper Hospodářské Noviny reports today.

Financial regulators in the Czech Republic is set to redefine the Fifth AML Directive (AMLD5) on cryptocurrencies as formulated by the European Union, to ensure crypto trading platforms within its environs do not indulge in fraudulent activities.

European Countries were urged by the EU Commission via the Fifth AML Directive (AMLD5), to provide transparency requirements which focus on the use of anonymous payments through prepaid cards and virtual currency exchange platforms, to curb money laundering or terrorist financing within Europe.

“The 5th Anti-Money laundering directive also increases the cooperation and exchange of information between anti-money laundering (AML) and prudential supervisors, including with the European Central Bank,” Věra Jourová, Commissioner for Justice, Consumers and Gender Equality said.

The Czech’s measure has gone a step further beyond what is stipulated by the European Union as enforced mid last year, which set up a legal framework for financial watchdogs in Europe, to regulate crypto exchanges and wallet providers to protect against fraudulent activities.

Cryptocurrency trading platforms in the Czech Republic are urged to comply with this stern measure and register their company with the national Trade License Office, or face the penalty of a fine worth 500,000 CZK (appr. $21,698).

Although the report did not state the deadline crypto exchanges are expected to comply with this directive, countries within Europe are required to abide by the AMLD5 regulation by January 20, 2020.

Additionally, the report also indicated that the new Czech Republic’s AML measure might affect companies that are not crypto-related.

Never miss out on our daily crypto news, stories, tips, and price analysis. Join us on Twitter | Telegram|Facebookor subscribe to our weekly Newsletter.

Related Posts:

  • No Related Posts

US crypto tax bill would give holders a little relief

In a rare show of support for the crypto industry, House Resolution 3963 … “allow exclusion of gain or loss on like-kind exchanges of virtual currency.”.

In the U.S., the Internal Revenue Service (IRS), the department responsible for collecting taxes, asserts that cryptocurrency assets are forms of property and, as such, are subject to tax law. The department has already started going after crypto holders in an effort to get them to pay up, but a bill submitted to the House of Representatives could limit how much the IRS could collect. In a rare show of support for the crypto industry, House Resolution 3963 (HR 3963) would “allow exclusion of gain or loss on like-kind exchanges of virtual currency.”

HR 3963, “Virtual Value Tax Fix Act of 2019,” was introduced by Representative Ted Budd of North Carolina and seeks to update the Internal Revenue Code of 1986 (IRC). It has already been referred to the Committee on Ways and Means and reads, in part, “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.”

Budd, who actively seeks ways to improve the IRC on different levels, wants to prevent personal crypto exchanges from being taxed twice. Under the current tax law setup, this is possible. He has testified previously before the Ways and Means Committee that crypto tax laws should be crafted in a similar fashion to those of foreign currencies.

The lawmaker was behind House Resolution 3708, the Cryptocurrency Tax Fairness Act, that also sought to update the IRC. It would force the IRC to view personal cryptocurrency purchases as transactions in foreign currency, which are currently not taxed. Budd argues that, since the IRS says that crypto is property, it should have the same coverage as those foreign currency transactions.

The bill wouldn’t be retroactive, only covering new transactions. It would also only be in place until the end of 2024. That happens to coincide with the timeframe for a new payments platform identified by the Federal Reserve, but this could just be a coincidence.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

Related Posts:

  • No Related Posts

US lawmaker reintroduces crypto tax bill to end double taxation

“[T]he exchange of virtual currency for virtual currency of like kind shall be treated in the same manner as the exchange of real property for real …

A bill that aims to amend the treatment of cryptocurrencies by the Internal Revenue Service has been referred to the U.S. House of Representatives Ways & Means Committee, CoinDesk reported.

On July 25, North Carolina’s Rep. Ted Budd (R) on July 25 reintroduced the bill, titled the “Virtual Value Tax Fix Act of 2019.” By amending1986’s Internal Revenue Code, the bill, if passed, would essentially end the double taxation on cryptocurrency transactions.

According to the Internal Revenue Code of 1986, no gain or loss is recognized on the exchange of real property for real property of like kind. The tax bill seeks to bring the same treatment to virtual currencies.

“[T]he exchange of virtual currency for virtual currency of like kind shall be treated in the same manner as the exchange of real property for real property of like kind,” the bill states.

In his previous comments, Rep. Budd had explained that due to the lack of like-kind exchange, the cryptocurrency industry is subject to double taxation of cryptocurrency transactions.

“An effective sales tax of nearly 40% penalizes the use of digital units of commerce,” he said. “The use of digital assets is already treated as a sale of the asset, even though the economic reality of the transaction is a purchase of a simple consumer good.”

Last month, Rep. Tom Emmer (MN-R) reintroduced the “Safe Harbor for Tax Payers with Forked Assets Act of 2019.” He said that the bill will bring more clarity on the tax treatment of cryptocurrencies following hard forks and airdrops.

TokenPost | [email protected]

Related Posts:

  • No Related Posts