The price of Bitcoin has been regaining its footing after China’s clampdown on ICOs and exchanges. This is not the first time China has tried to stifle cryptocurrencies for fear that they can be effective means for citizens to keep their capital safe in unfavorable economic conditions, out of reach of authorities. China may attempt to nationalize the local crypto industry, and could issue digital Chinese Yuan tokens to act as the new reserve currency on newer, more-highly regulated exchanges—platforms where tokens created via state-sanctioned platforms using the new denomination could be traded. The regulations could drive innovation for Chinese fiat gateways running through decentralized exchanges, which may become the only means for investors to swap their tokens. The ruling may also push users into more anonymous cryptocurrencies that do not leave a digital footprint.
According to a report from Reuters, Mexican officials have drafted a legislative proposal that would regulate the country’s FinTech industry. President Enrique Pena Nieto has said that the proposed bill will be introduced in the Mexican Senate by September 20. The draft language recognizes the important contribution that the financial technology sector makes to the nation’s economy, and stresses the need for regulatory action:
BTC China has announced that it will no longer provide a platform for digital currency trading, effective September 30, 2017, and has already moved to halt new account registrations. The news comes as statements from unnamed official sources indicate that Chinese regulators have started to deliver shutdown directives to the country’s cryptocurrency exchanges.
As Bitcoin has risen in value throughout 2017, there’s been an increase in calls for regulation of the digital currency space. Various governments around the world have moved to change laws and regulations to provide some level of control over the industry. According to a group of economists at the Bank of Finland, however, those regulations might be unnecessary.
Citizens in the Swiss municipality of Chiasso will soon have the option to pay some of their taxes using Bitcoin. Beginning in January 2018, the government will initiate a trial that will permit area residents to use the digital currency for up to 250 Swiss francs of taxes. The decision comes as officials in Chiasso continue their efforts to attract more digital currency startups to the area.
Russia’s complex relationship with digital currency took another interesting turn this week, as news reports suggest that the government is preparing to provide electricity subsidies to its domestic Bitcoin miners. The Russian news outlet Izvestiya reportedly broke the news, as Institute for Internet Development (IRI) project activities director Arseny Shcheltsin reportedly confirmed that authorities are creating a test program to provide the country’s digital currency miners with discounted electricity.
A report from Caixin sent the Bitcoin community into a tailspin today, after the Chinese media outlet suggested that the nation’s regulatory authorities were preparing to shut down domestic digital currency exchanges. The report is based on information from unnamed sources, who claim that the authorities have already issued an order directing local regulators to begin the process of closing those exchanges.
For digital currency users in the United States who might want to use their cryptocurrency for real-world commercial transactions, the rules under the existing tax regime are both complex and inexplicable. Those rules can turn even the most minor transactions into reportable capital gains – which is why digital currency users currently need to carefully record their transactions to track any potential tax obligations that may arise. A new bill in the U.S. House of Representatives could help to ease that burden.
Early this morning a Chinese working committee representing seven government administrations including the People’s Bank of China, and the regulatory, banking and insurance commissions ruled that Initial Coin Offerings (ICOs) constitute an illegal means of capital acquisition. Organizations and individuals are now expected to cease all ICO related activity, and banks and financial institutions are instructed to cease all business with organizations that do.
A report published by LendEDU this week reveals that there has been a dramatic increase in the number of digital currency-related complaints to the U.S. Consumer Financial Protection Bureau, or CFPB. In 2016, there were a total of seven such complaints filed with the Bureau. This year, experts expect that number to rise to roughly 425.
News outlet VietnamPlus reported this week that the nation’s Prime Minister, Nguyen Xuan Phuc, has directed the Ministry of Justice to oversee an effort to create a regulatory framework for digital currencies. Justice has been tasked with leading a collaborative effort that will also include the Ministry of Finance, Ministry of Information and Communications, Ministry of Industry and Trade, and the Ministry of Public Security. The nation’s central bank will also participate in the project.
The Securities and Exchange Commission moved to suspend trading of First Bitcoin Capital shares on Thursday, citing concerns about the Canadian company’s transparency and structure. In its statement announcing the suspension, the SEC described it as temporary, and set a preliminary termination date of September 7, 2017. In detailing the regulator’s action, the statement notes:
An announcement from Japan’s Financial Services Agency (FSA) has revealed that at least 50 Bitcoin exchanges have filed registration applications with the agency. Those exchanges are currently being examined by the FSA to ensure that they have taken the right steps to ensure that their customers are properly protected, as required by recent amendments to the nation’s fund settlement law.
The Internal Revenue Services has reportedly purchased software to assist it in its efforts to uncover the identities of Bitcoin-using tax cheats. The news was reported today by The Daily Beast, which posted a document that appears to be an IRS purchase agreement with an outside contracting firm called Chainalysis. The company provides analysis software to various government agencies and companies in the financial services sector.
The Australian Transaction Reports and Analysis Centre (Austrac) announced several weeks ago that it was bringing a lawsuit against Commonwealth Bank based on some 53,700 violations of the nation’s anti-money-laundering and terrorist financing prevention laws. Late this week, the government announced that it is proposing new reforms designed to strengthen compliance with those laws – including new regulations that will directly affect digital currency exchanges.
A report from the Daily Caller suggests that several Republican members of the House of Representatives and Senate may be in the process of drafting a bill that would offer protection from government interference to cryptocurrencies that meet certain specific criteria. The Caller’s report cites unnamed sources from Capitol Hill, who reportedly told the news outlet that one Senator and two Representatives are looking at issues like anti-money-laundering compliance as they work through the process of creating the legislation.
According to a report from the Sydney Morning Herald, a pair of Australian Senators want the country’s Reserve Bank to give official sanction to cryptocurrency. The duo are calling for the Bank to back an Australian digital currency, and warning that a failure to embrace the new technology could put the nation’s financial industry at a competitive disadvantage.
The Chinese government is reportedly planning to use blockchain technology for managing taxation and the issuance of electronic invoices. The announcement was made by the Miaocai Network, which is a state-sanctioned electronic taxation and invoicing enterprise. The Network revealed that it will be collaborating with the “government affairs chain GACHAIN” to create a blockchain-based system for “social taxation” and electronic invoicing.
The New York City Conflicts of Interest Board has announced that a Department of Education worker has received a fine for running Bitcoin-mining software on his Department of Education computer. The improper mining activities took place in 2014, and involved a month-long mining operation in which Vladimir Ilyayev used that DOE system to mine Bitcoin each night.
Russia’s National Settlement Depository (NSD) is reportedly considering plans to develop a platform that will enable the Moscow Stock Exchange to service digital currency assets. According to Kommersant, the goal is to create a blockchain-based service package that the NRM can use to record digital assets and settlements, identify cryptocurrency wallet-holders, and store private keys. Ultimately, the Depository hopes to create a bridge that connects fiat currency payment systems to digital currencies.