Digital Currency Weekly Recap 5-1-2016
The New UK Treasury Action Plan to Regulate Exchanges
The UK Treasury’s new action plan for addressing money laundering and terrorist financing problems has been called the most meaningful change to these policies in the last ten years. It addresses not only traditional sources of funding for terrorists and criminal enterprises, but also includes the Treasury’s take on cryptocurrency technology. While the report notes that there is not actually a high level of illegal activity using digital currencies, the current plan is to include cryptocurrency exchanges within the scope of AML and anti-terrorist funding regulations.
UK Treasury to Exempt Digital Currency Wallets from AML Rules
In a move that will help digital currency wallet providers avoid burdensome regulations, the UK Treasury has declared that it will not try to apply anti-money laundering (AML) provisions to those companies. In a report released last week, the UK government’s plans for dealing with terrorist financing and money laundering concerns were addressed in detail. Part of that plan involves a decision to apply AML regulations to digital currency exchanges. Though some had wondered whether other services such as wallet providers would also be subject to those rules, this latest announcement seems to have put those concerns to rest – at least for now.
The Treasury justified its decision by nothing that “extending the perimeter of anti-money laundering regulations beyond digital currency exchange firms would not deliver any benefits in terms of mitigating money laundering and terrorist finance risk, and would place significant burdens on firms in this innovative and embryonic sector.” That explanation suggests that most other non-exchange digital currency companies could be free from those regulatory burdens as well.
EU Vote Means Crypto Exchange AML Policy Closer to Reality
A committee vote in the European Parliament this week resulted in near-unanimous agreement to the adoption of a new report on digital currencies that could move Europe one step closer to applying anti-money laundering regulations to digital currency exchanges. Only one member of the committee voted against adoption. The vote now clears the way for the possible creation of a task force on digital currencies and a vote before the 751-member European Parliament.
Isle of Man Seeks Rules Tweak to Facilitate Cryptocurrency Gambling
In a move designed to prevent future regulatory hurdles for digital currency gambling, the Isle of Man’s Gambling Supervision Commission is seeking to alter the current definition for “the deposit of money” to be more inclusive of other forms of value exchange. While the Commission has acknowledged that there are no entities currently seeking to provide such gambling services on the Isle of Man, the government wants to ensure that its regulatory regime does not stand in the way of any potential innovation that might offer additional economic growth.
New Japanese Banking Legislation Would Equate Digital Currencies to Fiat Currency
The Japanese government has recently moved on a number of legislative proposals that would alter the status of digital currency within the nation – and this time, for the better. The approved bills would grant banking interests the power to recognize cryptocurrency for what it is: an asset with real value. That acknowledgment would pave the way for Japanese financial entities to more effectively pursue FinTech benefits, try out new innovations, and identify new solutions for their customers.