Countries Prepare for Cryptocurrencies Role in 2018

The Global Take on Blockchain & Digital Currencies

The talk surrounding cryptocurrencies has been all the rage this year with the value of Bitcoin skyrocketing and plummeting virtually overnight. Financial institutions and government agencies have been having one hell of a time trying to figure out how to manage the public’s growing interest in a relatively new and never before seen form of exchange.

While some scoff at its feasibility for a role in the future economy, others believe it is the savior consumers and investors have been waiting for. Now that we’re nearing the finale of 2017, leaders from across the globe are all taking different and interesting approaches on the direction they feel cryptos will serve them best.

Venezuela Bets on Crypto

Venezuela has recently announced the launch of their own petro-backed cryptocurrency designed to prevent the country’s economic and social crisis from becoming worse. Consumer prices rose a whopping 800% in 2016 and almost 75% of the population suffered from malnutrition resulting in protests, violent riots and an increased crime rate. The new cryptocurrency will be supported by nearly $270 billion of the country’s oil, fuel, gold, and diamond reserves in hopes of liberating the 31 million residents from severely impoverished conditions.

Founder and CEO of BitSpread, Cedric Jeanson, believes that 2018 will only bring about further integration of crypto transactions and payment methods. Despite the argument over the volatility of alternative digital currencies, Jeanson believes that this will not stop retailers and other service providers from accepting cryptocurrencies as a form of payment. Moreover, he feels that crypto may not have what it takes to remove the role of base currencies but:

I don’t think that’s the objective. There is a coexistence system that could work very well together. I don’t see one without the other.

South Korea & Israel Buckle Down on Cryptocurrency

Nonetheless, these ideas are not widespread and regulators around the world have made that clear as day. The United States and Japan are the two biggest crypto markets but the third’s largest, South Korea, has just announced policies that prohibit its usage of anonymously trading via Bitcoin and other currencies. Now, users will have to provide their true identity and the South Korean government will be monitoring the activity closer than ever before. This follows the bans established on ICOs and major breaches of native crypto platforms that drained online providers of over $100 million this year alone. This move is the most recent phase of attempting to control the decentralized exchange model that they feel is a threat to their country’s economy. Minister of the Office for Government Policy Coordination, Hong Nam-ki, told the Korean Press they “can’t let this abnormal situation of speculation go on any longer.”

Cryptocurrency Regulations Around the World
Cryptocurrency Regulations Around the World – Credit BI

And just this week on December 28th, Israel has made the move to ban cryptocurrencies due to its growing application on the black market and cyber-terrorists. The Israel Securities Authority (ISA) felt it was in their best interest to not simply restrict but do away with the activity altogether. Now Bitcoin and similar currencies are not allowed to be traded on the Tel Aviv Stock Exchange for any organization or individual. CMO of crypto-wallet firm e-Chat, Edwin Dearborn, explained Israel’s move to saying:

The Israeli government is concerned about how cryptocurrency could be used to finance terrorism and black market trading. I believe we will see more volatility while governments and central banks implement greater regulations to protect consumers, as well as their own positions.

Response to Bitcoin and Blockchain From the U.S. Government

An excess of 8 states in the U.S. has created bills embracing Bitcoin and blockchain technology in 2017. However, only a couple of them has been enacted into laws. The Columbia Science and Technology Law Review observed that the U.S. Federal Government has not regulated blockchain the way it does with conventional finances. The responsibility has been left in the hands of individual states such as New York that implemented laws to regulate virtual currency providers via state agencies. Arizona validated the use of smart contracts, Vermont recognized blockchain for evidence-purposes, Chicago uses it to better administrate real estate activities and Delaware is pending the motive to approve shares of Delaware companies via blockchain. Bitcoin is also the only cryptocurrency granted financial protections from the U.S. Commodity Futures Trading Commission. The U.S. seems to be relatively lenient in its management of alternative digital currencies.

blockchain regulation

It seems as if some world governments resist the idea of not being able to sufficiently control the movement of funds…which is entirely understandable. However, due to the decentralized peer-to-peer nature of blockchain, the underlying tech of cryptocurrencies, doing this successfully is another discussion in itself. Nevertheless, these recent events substantially decreased the value of popular platforms such as Bitcoin and Ethereum but seem to be bouncing back from these sudden blows to its international wallet. With all of this considered, cryptocurrencies will continue to play a part in some way shape or form as global economies further adjust to its presence in society.

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