The World Trade Organization (WTO) released a report on blockchain technology’s effect on international trade today, Nov. 27. Per the study, blockchain’s economic value-add on a global scale could reach almost $3 trillion by 2030.

“Blockchain and International Trade: Opportunities, Challenges, and Implications for International Trade Cooperation” analyzes blockchain applications and challenges that must be considered before the technology’s deployment in various sectors. The study considers the technology’s effect on industries such as trade finance, customs clearance, logistics and transportation.

Blockchain Business Value Forecast

Blockchain Business Value Forecast. Source: WTO

The study estimates that blockchain has the potential to significantly cut trade costs by increasing transparency and facilitating processes automation, including financial intermediation, exchange rate costs, coordination, and other aspects. “The removal of barriers due to blockchain could result in more than $ 1 trillion of new trade in the next decade,” the report reads.

Blockchain is expected to help administer intellectual property rights across multiple jurisdictions by delivering more transparency and efficiency, and enhance government procurement processes, including fighting fraud and managing public contracts.

Blockchain purportedly could improve supply chains, allowing for the tracking of shipments and proving their authenticity. Additionally, the technology could open new opportunities to micro, small and medium-sized companies.

Conversely, the study warns about challenges that must be addressed before deploying blockchain, as well as its impact on international trade. The researchers point out limited scalability of blockchains due to the predetermined size of blocks, in addition to energy consumption and security issues.

Although “blockchains are highly resilient compared to traditional databases due to their decentralized and distributed nature and the use of cryptographic techniques, they are not completely immune from traditional security challenges,” the study states.

The report stresses the importance of developing a multi-stakeholder approach in order to find appropriate use cases in cross-border trade. According to the WTO, blockchain requires frameworks that ensure the interoperability of networks and provide clear legal status for blockchain transactions across jurisdictions. The report concludes:

“Blockchain could make international trade smarter, but smart trade requires smart standardization — and smart standardization can only happen through cooperation. If we succeed in creating an ecosystem conducive to the wider development of blockchain, international trade could well look radically different in ten to 15 years.”

Earlier this week, Ethereum cofounder Vitalik Buterin said that the misapplication of blockchain technology in some industries leads to “wasted time.” Buterin argued that although there are a number of companies that try to establish higher standards by using blockchain technology, he does not think the technology is applicable in every industry.

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European cryptocurrency exchange Bitstamp will integrate a new platform to improve compliance and customer protection, according to a press release published Nov. 27.

Bitstamp has formed a partnership with British market surveillance firm Irisium Ltd. in an effort to improve the safety and reliability of its marketplace. The exchange will deploy Irisium’s platform to monitor market activity and attract more institutional investors.

Commenting on the collaboration, Alastair Goodwin, CEO of Irisium Ltd, said that the adoption of Irisium’s platform will help “increase transparency, integrity and confidence in the cryptocurrency market,” eventually improving market liquidity and adoption.

Founded in 2011, Bitstamp is purportedly the largest crypto exchange by trading volume in the E.U., supporting trading for Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), U.S. dollars and euro.

Recently the exchange was acquired by Belgium-based investment firm NXMH, which is in turn a subsidiary of investment bank Barclays. The firm is a also a subsidiary of Korea-based media giant NXC Corp., which bought a 65.19 percent stake in South Korean crypto exchange Korbit last year.

In August, Bitstamp along with crypto exchanges Gemini, Bittrex, and bitFlyer USA established a self-regulatory organization dubbed the Virtual Commodity Association Working Group for digital commodities, such as cryptocurrencies. The organization aims to help large-scale investors get more comfortable with the crypto market and work on formulating industry standards.

In May, the Chicago Mercantile Exchange (CME Group) in partnership with U.K.-based Crypto Facilities launched the CME CF Ether-Dollar Reference Rate and Real Time Index to provide users access to a real-time ETH price in U.S. dollars. Both rates are set to be calculated by Crypto Facilities, and based on transactions and order book activity from crypto exchanges Bitstamp and Kraken.

This post is credit to cointelegraph

Overstock founder and CEO Patrick Byrne is exiting the retail business so he can focus on blockchain because he believes it’s a disruptive technology that will transform the world.

“The blockchain revolution has a greater potential than anything we’ve seen in history,” Byrne told Fox Business on Nov. 26 (video below). “It’s bigger than the Internet revolution, how it’s going to restructure society.”

Fox Business host Stuart Varney — an alum of the London School of Economics — asked Byrne how he can be so optimistic when cryptocurrency prices have plunged recently.

Byrne: I Don’t Care About Daily Price Changes

Byrne said focusing on the minutiae of bitcoin’s daily price movements is losing sight of the forest for the trees. “What coins are doing on any given day is silly,” he quipped.

Byrne announced in 2014 that he wanted to pivot from retail to blockchain, and has been making huge progress on this front. “We now have very interesting positions in 19 blockchain companies,” he said.

One of those ventures involves a $6 million investment in an open-source, blockchain-based crypto social network called Minds.

As CCN reported, Minds is a blockchain-based alternative to Facebook, Twitter, and the Google-owned YouTube that promises strict user privacy and absolutely no censorship.

Patrick Byrne said 2019 will be a groundbreaking year for the industry.

“Next year is when you will see blockchain really start coming out with products into the world,” he said. “You’ll see blockchain products in Q1.”

When asked what we can expect to see in 2019, Byrne replied: “You’ll be able to trade security tokens. There’s a whole new class of securities coming into existence called security tokens.”

‘Every Stock Will Be Tokenized’

Byrne recalled that Robert Greifeld — the chairman of Nasdaq — predicted in November 2017 that every stock and bond on Wall Street today “could be” tokenized. “In five years, every one will be tokenized,” Byrne promised.

He added: “The architecture of Wall Street as we know it is going to be deprecated over five years and replaced with security tokens. If that’s true, we built…the New York Stock Exchange of that world. We spent the last four years and $100 million building it.”

When asked why a security token is superior to a stock, Byrne said it’s because of three things:

  1. 90 percent lower friction costs.
  2. Complete transparency for regulators.
  3. Immunity from market manipulation. “All kinds of mischief that goes on in the current version of Wall Street cannot go on in a blockchain version of Wall Street,” he said.

Byrne conceded that a major drawback of bitcoin mining is its high cost, but said his companies are involved in a project called raven coin, “which has a much different energy profile.”

Tim Draper: ‘Bitcoin Is Bigger Than the Internet’

In his exuberance for crypto technology, Patrick Byrne mirrored the unbridled enthusiasm of billionaire Tim Draper, who recently doubled down on his $250,000 bitcoin price target for 2022.

In April 2018, Draper said bitcoin is “bigger than the Internet.” The venture capitalist — who was an early investor in Tesla, Hotmail, and Skype — said bitcoin will be “bigger than all of those combined,” as CCN reported.

“This is bigger than the Internet,” Draper gushed. “It’s bigger than the Iron Age, the Renaissance. It’s bigger than the Industrial Revolution. This affects the entire world and it’s going to be affected in a faster and more prevalent way than you ever imagined.”

tim draper wears bitcoin tie and socks
Billionaire Tim Draper is such a bitcoin bull that he wears a bitcoin tie and matching socks. (Image: YouTube)

Draper is unfazed by the recent market crash, and remains confident that the global economy will soon transition to crypto, as CCN reported.

“It’s going to be better for people,” he said. “They’re going to move to crypto, and they’re going to go away from the political currency (fiat). That’s the way it’s going to move.”

So how confident is Draper in the future of crypto? So confident that he’s still hodling the entire stash of 40,000 bitcoin he acquired in 2014 at $600 a piece. “This is a new society, and you want to get out in front of it,” he said.

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Tether Ltd., the controversial issuer of the tether stablecoin (USDT), which aims for parity with the U.S. dollar, announced Tuesday that it would reopen account verification for new customers and enable customers to redeem tether for fiat currency directly through its platform.

“Tether is able to return to its original vision of having a wallet for creating and redeeming directly on its own platform without having to rely on a third party,” the company said in a post on its website. “This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon.”

Notably, withdrawals will be subject to a high minimum of $100,000 and significant fees.

Tether’s white paper says that token holders are able to redeem their USDT directly for dollars, which the white paper says the company holds in bank accounts at a one-to-one ratio with outstanding USDT tokens.

Questions about Tether’s access to stable banking partners – and the lack of a full audit, which the company had promised – have caused an erosion of confidence in the the token’s fiat backing, leading the exchange rate to break dramatically with the dollar at one point in mid-October.

Tether is now banking with the Bahamas-based Deltec, which the company noted in Tuesday’s announcement.

The direct redemptions promised in the white paper came to an end following a November 2017 security breach. However, restrictions on deposits and withdrawals had been in place since April 2017, when Wells Fargo stopped providing correspondent banking services to Tether’s Taiwanese banking partners.

While transactions from the Tether website were halted following the November 2017 breach, the company encouraged buyers “to use the services of any one of a dozen global exchanges to acquire or dispose of Tethers for either USD or other cryptocurrencies.”

Since that time, customers have been able to deposit USDT to the Bitfinex exchange – which has overlapping shareholders and management with Tether Ltd. – and withdraw fiat, although many customers have complained that they waited weeks for their money to arrive.

Some gave up and cancelled the withdrawals, transferring their USDT to another exchange, such as Kraken, which offers a USDT-USD trading pair. Following persistent complaints from customers regarding delayed withdrawals, Bitfinex announced new fees for large or frequent fiat withdrawals.

In Tuesday’s announcement, Tether said that withdrawals and deposits would be subject to minimums of $100,000 and 100,000 USDT, respectively.

It also detailed fees for depositing or withdrawing fiat from the platform. Depending on the size of the withdrawal, fees range from 0.4 percent (or $1,000, if greater) to 3 percent. Customers can only withdraw fiat once per week, and higher fees will be charged for those withdrawing more than once per month.

For deposits of any size, fees are a flat 0.1 percent.

Bitfinex trading pair

Bitfinex also made an announcement related to tether on Tuesday, saying that customers would be able to trade USDT directly for dollars through a trading pair. It also announced a trading pair for euros and the euro-linked EURT.

Bitfinex called this policy “Tether neutrality.” The policy appears to amount to allowing the rate at which USDT can be redeemed through Bitfinex to float according to market conditions.

Whereas previously the rate of exchange was locked in at $1 to 1 USDT – because the exchange only allowed deposits and withdrawals – Bitfinex will now offer direct trading pairs.

Across all major exchanges, tether’s market value hit its lowest level on Kraken in mid-October, briefly trading for just $0.85.

This post is credited to coindesk

The Bahrain Institute of Banking and Finance (BIBF) is launching what it claims to be the country’s first “Blockchain Academy,” according to an announcement published Nov. 26.

The BIBF was established in the Kingdom of Bahrain in 1981 by approval of the Specific Council for Vocational Training. The institute is an unregistered non-profit semi-government entity that provides training in the financial sector.

The establishment of the Blockchain Academy purportedly marks the country’s first blockchain professional qualification program offering. The training program is designed to prepare participants to earn the international qualification of Certified Blockchain Professional C|BP and was developed by the BIBF and Dubai-based training firm MyLearning Key.

The C|BP Certification purportedly comprises of three competency areas in blockchain technology; development, implementation, and strategy. BIBF Director Dr. Ahmed Al Shaikh said that the organization introduced the Blockchain Professional Qualification to “support the growing demand for skilled blockchain professionals.”

Ahmed Naeemi, the Head of IT, Operations and Project Management, said that the new initiative aims to support businesses and organizations as they adopt new technologies like blockchain.

In September, the government of Bahrain stressed the importance of blockchain technology for the country’s economy, also urging cybersecurity vigilance. Abdulhussain Mirza, Bahrain’s minister of electricity and water affairs, stated that “technologies such as blockchain take us a huge step forward in finding a secure way to facilitate transactions.”

As Cointelegraph recently reported, multisectoral blockchain company Bitfury partnered with the Plekhanov Russian University of Economics to create an accelerator for blockchain projects. In addition to helping develop blockchain projects, the university will provide educational programs dedicated to “training specialists who are able to create innovative projects using digital technologies in a short time.”

The University of Tokyo will also launch a blockchain course following a donation of nearly  $800,000 from several companies, including Japanese banking giant Sumitomo Mitsui (SMBC) and the Ethereum Foundation. The course is focused on the development of decentralized solutions, their social implementation, and human resources.

This post is credit to cointelegraph

A South African law firm has published a short essay on proposed tax legislation for cryptocurrency in the country. Cox Yeats Attorneys, a Durban-based firm, argues that the Taxation Laws Amendment Bill, published by the National Treasury in July, will be bad for the digital asset industry, according to local media reports.

Also read: Uganda to Regulate Cryptocurrency Use as Fake Bitcoin Schemes Surge

Law Would ‘Significantly Deter’ Crypto Use

South Africa’s National Treasury published the draft virtual currency law on July 16 in response to rising public interest in bitcoin and other cryptocurrencies. The bill is the country’s first attempt to regulate the use of crypto assets, which have been largely unregulated until now. It includes proposed changes to both the Income Tax Act and the Value Added Tax (VAT) Act for cryptocurrency taxation purposes.

Law Firm: South Africa's Draft Tax Law Could Affect Cryptocurrency Use

“The amendments, if promulgated in their current form, will significantly deter the use of cryptocurrency in South Africa for both trading and investment purposes,” Wade Ogilvie, a partner at Cox Yeats Attorneys, wrote in an article that was originally published in The Sunday Tribune. Changes to the income tax law will define cryptocurrencies as “financial instruments,” he said. That will place them in the same category as loans, debts and common stocks.

Ogilvie said this could have “a ripple effect throughout” South African tax legislation. He cited Section 22 of the Income Tax Act, which “provides for the determination of the value of undisposed trading stock to be included in taxable income.” He also pointed to another section of the same law that specifically excludes financial instruments for this purpose.

Law Firm: South Africa's Draft Tax Law Could Affect Cryptocurrency Use
Wade Ogilvie

“(This) means that those who trade in cryptocurrency may not benefit from valuing their undisposed cryptocurrency using the valuation method contemplated in Section 22,”  Ogilvie said.

“The amendment may also stifle investment in fintech companies in South Africa as section 11D of the Income Tax Act, which provides an allowance for companies that invest in research and development in South Africa, specifically excludes the creation or development of financial instruments. This would include companies who mine or develop cryptocurrencies.”

Growing Cryptocurrency Adoption

Bitcoin adoption has grown sharply in South Africa over the past few years, in spite of regulatory concerns and falling cryptocurrency prices. The country, Africa’s most sophisticated economy, recently hosted its first bitcoin ATM and has consistently ranked as the highest in the world for search interest in “bitcoin,” according to Google Trends data.

Regulators have been largely cautious in their approach to cryptocurrency, as they are trying to avoid triggering a domestic stampede into a technology that could change the face of the global financial industry. The South African Reserve Bank, the country’s central bank, has warned that cryptocurrency isn’t “legal tender.”

Law Firm: South Africa’s Draft Tax Law Could Affect Cryptocurrency Use

Taxpayers in the country “are merely required to declare their gains and losses” involving crypto asset transactions. The South African tax regulator will then “look at the intention of the taxpayer when determining whether the income is capital or revenue in nature.”

Bad Law

Ogilvie said the draft law will also seek to add “the acquisition or disposal of any cryptocurrency” to a section of the existing income tax legislation that “deals with the ring-fencing of assessed losses of certain trades.” This, again, will shortchange digital currency investors.

He wrote:

Although taxpayers who trade in cryptocurrency may set-off their assessed losses from income derived from that trade, they may not set-off their assessed losses against income derived from other trades.

The bill proposes amendments to the VAT legislation that would include defining “financial services” as the “issue, acquisition, collection, buying or selling or transfer of ownership of any cryptocurrency.”

“As cryptocurrency is not considered legal tender, VAT vendors providing wholly tax-deductible supplies who accept cryptocurrency as a form of payment will not be able to on-sell the cryptocurrency and claim the full input VAT as their business will be considered as one which supplies mixed supplies,” Ogilvie explained. “Accordingly, only a portion of the input VAT will be deductible.”

He said that in its current form, the Taxation Laws Amendment Bill “appears to curtail investment as opposed to encouraging it. The use of cryptocurrencies is on the rise and it may be that (the) Treasury, and the Reserve Bank, are forced to address the insurgence sooner than expected.”

What do you think about the proposed cryptocurrency taxation law in South Africa? Let us know in the comments section below.

This post is credited to news.bitcoin

The Philippine government-owned Cagayan Economic Zone Authority has unveiled a plan to attract Japanese, Korean and Australian companies to its “Crypto Valley of Asia.” The authority is also cracking down on crypto companies operating within its economic zone without a license.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Ceza’s Crypto Valley of Asia

Philippine Crypto Valley to Attract Companies From Japan, Korea and AustraliaThe Cagayan Economic Zone Authority (Ceza) announced last week its plan to attract companies from Japan, Korea, and Australia to its Crypto Valley of Asia.

Philippine Crypto Valley to Attract Companies From Japan, Korea and AustraliaCeza has partnered with one of its principal Offshore Virtual Currency Exchange (Ovce) licensees, Rare Earth Asia Technologies Corp., to achieve this expansion. The agreement gives the tech company the exclusive right to be Ceza’s sole marketing and technical partner to promote Ceza in the aforementioned three countries, the authority explained.

Crypto Valley of Asia will be marketed as “the most ideal investment destination in Asia for blockchain, crypto and financial technology (fintech) companies,” Ceza wrote. The authority further noted that it offers companies “clear guidelines and transparency, attractive tax incentives, access to a rich pool of talent in the areas of blockchain and fintech, and other benefits,” elaborating:

The development plan for the Crypto Valley of Asia includes the launch of a blockchain and fintech university to provide skilled and experienced workers for companies in the economic zone.

Philippine Crypto Valley to Attract Companies From Japan, Korea and AustraliaOn Nov. 23, the Philippine News Agency reported that Ceza’s revenue from January to September reached 521 million pesos (~$10 million), doubling from 224.55 million pesos earned for the full year of 2017. Ceza CEO and Administrator Raul Lambino explained that Ceza’s venture into cryptocurrency and blockchain technology has boosted its revenue this year, adding that “Growth in the economic zone will be investment-driven.” Furthermore, about 50,000 jobs will be created, the news outlet noted.

Rare Earth will also be issuing a “token that enables its exchange partners to receive a share of transaction fees,” Ceza added. “This initiative shall be subject to Ceza fintech and Ovce rules and regulations as well as its upcoming framework and regulations on ICO [initial coin offering] and STO [security token offering].” In addition, Ceza wrote:

As part of the agreement with Ceza, Rare Earth will comply with all the Philippine rules and regulations of the concerned regulatory agencies such as the Banko Sentral ng Pilipinas (BSP) and Securities and Exchange Commission (SEC) when appropriate.

Crackdown on Unlicensed Crypto Firms

Philippine Crypto Valley to Attract Companies From Japan, Korea and AustraliaThe Manila Times reported on Nov. 22 that Ceza is cracking down on cryptocurrency firms operating in the zone without authorization. Ceza is collaborating with the National Bureau of Investigation and the Criminal Investigation and Detection Group of the Philippine National Police to go after unlicensed crypto businesses.

The authority has also issued an order to closely monitor activities in its crypto valley program, the news outlet wrote. According to Lambino:

There have been reports of some unlicensed cryptocurrency firms that have burrowed into Ceza’s emerging fintech-crypto hub where they set up illegal operations.

In October, Ceza announced that it had awarded licenses to 19 companies, allowing them to operate crypto businesses within the zone.

What do you think of Ceza attracting companies from Japan, Korea, and Australia to its Crypto Valley of Asia? Let us know in the comments section below.

This post is credited to news.bitcoin

In this article, Sonal Mehta, a Content Lead at SoluLab, discusses how blockchain will benefit farming and what are the agriculture blockchain startups working on those benefits.

Food and water are the two kinds of stuff without which no one can survive in this world. Everyone needs this in right quantities on a daily basis to survive; where did this food come from? The agriculture sector, right? When agriculture is done in the right way, its outcome with increased productivity will enhance the development of the country in the process too.

Agriculture is a sector that is constantly in demand and this constant demand is constantly rising and increasing the demand-supply gap. This is because of the increased global population and limited or scarce resources to meet the demands of the population. However, blockchain use cases in agriculture will have a positive impact on meeting those demands successfully.

Blockchain Projects in Agriculture and Their Benefits

Agriculture also contributes to the country by creating demand for products that are manufactured and produced using the raw materials provided by farming.

There are some blockchain agriculture companies like provenance, OriginTrail, etc. today that have aimed towards reducing the challenges faced by farming using the features of blockchain. Some of these challenges include no availability of proper land maintenance resources, equipment or inability to forecast natural climatic changes, etc.

Ripe.io – Better Network Connection with Suppliers and Dealers

With blockchain, the farmer or the farming business is able to buy the reaped products such as grains, vegetables, flowers, spices, etc. and they are organized in a structured manner. Then those products can be allocated into groups and categories respective of its place of delivery or type of product, etc.

These products then can be easily sent to suppliers and dealers using blockchain platform. This is because blockchain provides a direct peer to peer connection and thus the farmer or the farming business does not have to wait for someone else to handle their supply. They themselves can connect with the supplier and make the transaction successfully.

With blockchain, farmers also have the ability to track their products and keep a track where their product is in the supply chain in real-time. Ripe.io is striving hard to provide a hassle-free tracking feature for the farmers, which will reduce the mal-practices and fraudulent activities.

AgriDigital – Cost of Operation and Transaction

Farmers of every country face the biggest challenge of dealing with the cost of transaction or operation to sell their products. Often, the cost of their selling is lower than the cost paid for the transaction undertook to make sure the products reach the customer. In simple words, the cost of the supply chain is higher than the price at which the products are sold. Because of this reason, most of the farmers end up in debt which they are striving hard to repay.

With blockchain, this major challenge can be eliminated as blockchain allows direct connection to the customer or supplier. Thus, there is no extra supply chain cost and also the farmer or the farming business is able to deliver their products more quickly. This is due to the feature of blockchain operating in a decentralized system.

AgriDigital is creating supply chain in a much transparent manner for farmers and their farming business using the technology of blockchain. They are using the feature of blockchain providing direct connection to other users to make a trade for framing food in such a way that, the farmers get their share of profit. This is possible by allowing the farmers to connect with buyers directly without having to wait.

UPS – Improved Analytics to Make Smart Decisions in Future

In agriculture, various activities are performed and traditionally these data are stored in paperwork, which makes it harder to verify or integrate data to make better decisions. With blockchain every process and operation that take place is stored digitally and they can be integrated with each other, which in turn will provide meaningful data to forecast or make smart decisions.

For example, blockchain stores data of when it rains; when the farmer sowed the seed when the farmer reaped the grown plants; climatic changes; wind pressure; groundwater levels, etc. When data like these are integrated with each other, the farmer will be able to forecast when to replenish the groundwater level; when to protect his crops in case of a forecasted rain or draught with the help of data stored.

Blockchain makes business analytics of farming more efficient and effective. UPS has made an alliance with blockchain in transport alliance to analyze and make better smarter decisions on logistics. They greatly feel that blockchain is the only way today farming will meet the current huge quantity of demands.

Indigo Agriculture – Inventory and resource management

In agriculture, lots of resources are used on a daily basis and they all need to be replenished constantly to avoid any disruption in the farming process. Without a record of the inventory, the farmer will face a great deal of trouble and challenge in maintaining a well-balanced supply and demand.

Blockchain helps to record all data from the inventory in a structured and organized manner, thus allowing the farmer to keep track of what needs to be bought, replaced and replenished.

Indigo Agriculture is working on the traceability, production and goods movement to help with the inventory management of farming resources.

IBM Blockchain – Using internet of things (IoT)

Internet of things creates an environment where the farmer can monitor and track the soil quality, fertility, maintain pest-control, manage irrigation, etc. IoT sensors are deployed in the farming fields to record necessary data according to the requirement and the farmer gets accessibility to these data and is able to focus on what is the top priority to make better production.

IBM is working on providing such sensors and tracking data for farmers so that their agricultural business can blossom to reap profits.

Over to You: Blockchain is a Boon for Agriculture

Blockchain is going to revolutionize agriculture sector and hopefully soon, it will eradicate hunger and poverty in every country. With blockchain, farmers are able to track, monitor, control and manage different kinds of agricultural resources and goods. The potential of blockchain is realized and it is going to automate the agriculture sector too. Blockchain is going to change the world of agriculture sooner than you think.

This post is credited to coinspeaker

On November 2, Taiwan officially tightened anti-money laundering (AML) policies targeted at crypto exchanges, requesting exchanges to monitor and prevent any illegal transaction processed using digital assets.

According to the newly drafted Money Laundering Control Act and Terrorism Financing Prevention Act approved by the Legislative Yuan, one of the five branches of the Taiwanese government, the country’s Financial Supervisory Commission (FSC) now has authority over crypto exchanges to ban transactions suspected of being tied to fraudulent operations.

Taiwan’s Ministry of Justice (MoJ) released a statement following the approval of the new AML bill, emphasizing that the government is working towards meeting international AML standards by encouraging businesses to foster a “compliance culture and mindset.”

Until this year, the government of Taiwan was skeptical towards regulating the local cryptocurrency exchange market and blockchain sector.

South Korea, the third largest cryptocurrency exchange market, also refrained from implementing practical and efficient regulations to govern its local digital asset market until 2018, because it feared that investors would recognize it as a move to legitimize the cryptocurrency industry.

Based on its recently passed AML bill and the stance of the country’s main financial watchdog towards the cryptocurrency sector, Taiwan is likely leaning towards regulating its local cryptocurrency and blockchain space to prevent fraudulent operations and criminal activities using cryptocurrencies.

China’s complex relationship with Taiwan

For decades, Taiwan has had a complicated relationship with China. The official name of Taiwan is the Republic of China (RoC) and since the RoC’s loss of the mainland to the People’s Republic of China (PRC) governed by the Communist Party of China, the PRC has consistently claimed sovereignty over Taiwan and said that the ROC is no longer in legal existence.

Although Taiwan has claimed to be the legitimate government of China, the loss of Hainan in 1950 has limited the jurisdiction of the Taiwanese government to Taiwan and its two outlying islands Quemoy and Matsu.

In recent years, mostly due to the increasing support of the U.S., the tension between Taiwan and China has continued to increase. On October 22, reports revealed that Taiwan is preparing to pitch for more U.S. arms and weaponry, after the U.S. approved the purchase of $330 million of arms sales to Taiwan in September.

Representatives of Taiwan, the  U.S., and China had drastically contrasting viewpoints on the increasing arms sales from the U.S. to Taiwan.

Lo Chih-cheng, a ruling-party lawmaker on the parliament’s defense committee, said that regardless of the relationship between Taiwan and China, the government of Taiwan must possess credible defense and sufficient weapons to defend the region from potential attacks:

“In the worst case, we have only ourselves to rely on. We should not be so dependent on the U.S. in the long term. But we still need to buy weapons from the U.S. to secure our defenses while we are building our capabilities.”

The Institute for National Defense and Security Research, an organization funded by Taiwan’s defense ministry, noted that the established conflict between the U.S. and China was “a strategic window of opportunity for Taiwan” to build a strong defense system to protect the region.

However, the government of China fiercely opposed the arms sales of the U.S. to Taiwan. The foreign ministry in Beijing said in June of last year that the $1.4 billion deal had “severely damaged China’s security and sovereignty,” describing Taiwan as an “indispensable part of China’s territory.”

At the time, Michael Kovrig of International Crisis Group said, “if this is, in fact, intentional timing, this does represent a change of tone. The Americans would clearly be aware that this is going to irritate the Chinese. It’s not leaving room for the Chinese to save face,” adding that any additional arms sales to Taiwan could worsen the relationship between the U.S. and Taiwan.

Did China have any impact on the new AML bill?

In a period in which the Chinese mainstream media and state-backed publications are accusing U.S. President Donald Trump of playing a high-stakes game backing Taiwan, any activity to fuel the already intensified tension among the U.S., Taiwan, and China could lead to serious international conflicts and what the Chinese government call, “dire consequences.” The China Daily editorial reported on October 24:

“Military hawks in Washington have tried hard to scare Beijing and console Taipei. But they should consider the dire consequences of their country being dragged into a costly confrontation that would in the first place be both unnecessary and avoidable.”

One of the few common areas the government of Taiwan and China agree on is the prevention of money laundering through the utilization of electronic payment systems including cryptocurrencies.

Recently, in an attempt to completely ban money laundering efforts and fraudulent activities in the global cryptocurrency sector, the government of Japan also called for the establishment of standardized AML regulations regarding cryptocurrencies, specifically concerning anonymous cryptocurrencies like Monero, Zcash, and Dash. An FSA official said on October 24:

“It should be seriously discussed as to whether any registered cryptocurrency exchange should be allowed to use such currencies. It’s nearly impossible for Japan to handle the problem alone. Even if trade is restricted to only domestic transfers or monitoring is enhanced, it’s still not enough to counter money laundering. It would be best if all the group of 20 industrial and emerging nations and regions (G20) would take the same steps toward prevention.”

Over the past several months, led by Taiwan legislator and congressman Jason Hsu, the government of Taiwan has demonstrated a more proactive and open-minded approach towards regulating the local cryptocurrency market.

In an interview, Hsu explained that a parliamentary coalition had been formed in Taiwan to focus on regulating blockchain and crypto with a set of guidelines targeted at cryptocurrency exchanges. He added that Taiwan is set to cooperate with Japan, South Korea, Singapore, Hong Kong, and other Asian countries to facilitate the growth of the local cryptocurrency space.

Hence, rather than China’s direct impact on Taiwan, a collective effort by the lawmakers and Congress of Taiwan to regulate the country’s cryptocurrency space most likely led to the changes in the new AML bill.

“We have set up a parliamentary coalition in Taiwan’s parliament for blockchain, which is a bipartisan alliance designed to help support the industry. I have also launched self-regulatory organizations for blockchain and crypto, where we are working together to come up with a set of guidelines to regulate exchanges. These guidelines will provide basic parameters as to how crypto exchanges and other taxations are defined. When we announce the guidelines in the coming weeks, it will be a regional consensus with Taiwan, Japan and Korea, Singapore, Hong Kong as well as other Asian countries.”

Taiwan legislator and congressman Jason Hsu

Even China is protective of crypto to a certain extent

China officially banned cryptocurrency trading in September 2017, expressing concerns towards money laundering and capital controls. The government has limited the outflow of the Chinese yuan to overseas markets for decades, and through exchanges, investors were able to bring capital outside of the local market prior to the ban.

As Cointelegraph extensively reported, the government actively banned nearly every area in the cryptocurrency sector including events, media, and over-the-counter (OTC) trading, requesting AliPay, the country’s most widely utilized fintech application to block any transaction that is suspected of being connected to cryptocurrency exchanges.

However, on Oct.r 25, 2018 the Shenzhen Court of International Arbitration officially stated that under local regulations, cryptocurrencies like Bitcoin and Ethereum are considered properties and as such, holding or transferring Bitcoin is not illegal in China.

“Chinese court confirms Bitcoin is protected by law. Shenzhen Court of International Arbitration ruled a case involving cryptos. Inside the verdict: China law does not forbid owning and transferring Bitcoin, which should be protected by law because of its property nature and economic value.”

The ruling from the Shenzhen Court of International Arbitration essentially provided merchants with a green light to accept cryptocurrencies as a payment method without being in conflict with existing regulations.

As of November, China’s oldest technology publication, Beijing Sci-Tech Report (BSTR), and several hotels and restaurants accept cryptocurrencies.

Beginning January, BSTR will officially sell its yearly subscription in Bitcoin at a fixed price of 0.01 BTC. But, the publication reaffirmed that the purpose of the integration is to demonstrate the real-world potential and use case of the blockchain, and that if the price of BTC rises substantially, the publication will refund the buyers.

Hence, while cryptocurrency trading remains prohibited in China, technically, owning or transferring cryptocurrencies is not illegal. As such, it can be argued that China, to a certain extent, is not wholly dismissive of crypto, given the government’s optimism towards blockchain technology as a core pillar of the fourth industrial revolution.

The Xiongan government, tasked to build Chinese President Xi Jinping’s dream city, the Xiongan New Area, has made blockchain technology a key component of the project, working with Ethereum-related institutions, including ConsenSys, the largest blockchain software studio in the global sector, led by Ethereum co-creator Joseph Lubin, to develop blockchain-based tools for the government .Lubin said in July:

“As one of our first major projects in the People’s Republic of China, we are excited to help define the many ‘use cases’ that could benefit from the trust infrastructure enabled by ethereum technology.”

Can Taiwan be the next crypto Hub?

Singapore, Hong Kong, South Korea, and Japan, the four regions congressman Jason Hsu mentioned, have already evolved into major markets.

Upbit, South Korea’s second largest cryptocurrency exchange and Binance, the world’s largest digital asset trading platform, according to the Blockchain Transparency Institute, have already established offices in Singapore and entered beta testing of their trading platforms with banking partners secured.

Japan and South Korea, as two of the largest cryptocurrency markets, have demonstrated significant progress in terms of regulation and industry growth.

To compete against the four markets, Taiwan would have to establish a strong selling point to attract cryptocurrency exchanges and blockchain-related businesses.

Recently, the FSC of South Korea declared that banks are free to work with crypto exchanges and the Seoul Central District Court ruled a case between local cryptocurrency exchange Coinis, and major commercial bank Nonghyup, in favor of Coinis, establishing a precedent for the industry.

Attorney Kim Tae-rim, who represented Coinis, said that the case is a milestone for the cryptocurrency sector as it would encourage banks to refrain from unfairly treating digital asset exchanges.

“Cryptocurrency exchanges, by default, have the right to freely deposit and withdraw funds to and from major banks in South Korea, and an abrupt termination of partnership and services by the bank [in this case Nonghyup] without sufficient evidence or reasoning falls under the breach of contract.”

So far, Taiwan has not led sufficient initiatives to lure in some of the biggest cryptocurrency and blockchain-related businesses from other major markets. But, if Hsu and the coalition continue to drive the adoption of crypto in Taiwan, in the mid-term, companies enter the market given that stable banking services and support from the government are guaranteed.

This post is credit to cointelegraph

The nation’s financial regulators have criticized Keplerk, a France-based financial technology (fintech) company, the Autorite des Marches Financiers (AMF)  for allying with tobacco retailers in the country to enable them to sell bitcoin to clients through its bitcoin vouchers beginning from January 2019, according to a Finance Magnates report  on November 26, 2018.

Keplerk in AMF Hot Waters

As reported by BTCManager on November 23, 2018, Keplerk announced its collaboration with French tobacco retail shops to make it possible for the outlets to sell bitcoin and ether to their clients through vouchers from early next year.

However, barely a week after announcing the innovative move, Keplerk has reportedly been sharply criticized by the AMF.

Per sources close to the matter, the French financial regulator has said in a statement that Keplerk is an unregulated entity and as such would not be able to offer customers enough protection.

“PAYSAFEBIT SASU, which has a capital of 50,000 euros ($57,000), operating with the trade name KEPLERK, which is neither approved by a French nor a foreign authority, is not likely to provide any form of customer protection,” stated AMF, adding “KEPLERK must not be confused with companies approved in France such as Kepler capital markets as they have no connection whatsoever.”

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Bitcoin Not Suitable for Retail Investors?

While Keplerk’s strategic partnership with French tobacconists may be seen as a forward-thinking maneuver by cryptocurrency enthusiasts as the move, if successful, would have given hodlers a somewhat hassle-free way of quickly buying bitcoin and ether, the region’s financial watchdog sees it quite differently.

Citing the seemingly volatile nature of bitcoin and other digital assets, the AMF has reportedly declared that the burgeoning digital assets class is only meant for institutional investors, high net worth individuals and financial experts, and not for “unsophisticated private investors.”

Although blockchain-based virtual currencies are not outrightly banned in France as obtainable in a few crypto-unfriendly jurisdictions like China and some others, it’s worth noting that the AMF and other French financial heavyweights have always taken a strict stance towards digital assets.

Earlier in January 2018, BTCManager informed that the French Finance Minister Bruno Le Maire had called for the creation of new guidelines and a more robust regulatory framework for the country’s digital currency ecosystem to deter terrorists and money launderers from using cryptoassets in aiding their crime.

This post is credited to btcmanager