BitOoda Global & Regulatory Analysis, 12/2/2019: Global Roundup

Happy Thanksgiving from BitOoda! This week, we followed a broad range of interesting developments around the digital asset world, from Asia to Europe to the U.S., and we thought it would be useful to offer a global roundup (with some analytic commentary) for our readers:

East Asia/South Asia

· China’s central bank (PBoC) issued two reports — the Bluebook of Blockchain and its annual financial stability report — that in our view paint a starker picture of the country’s blockchain industry than originally perceived following President Xi’s recent statements. Of the 25,000 blockchain-related firms in China, only about 4,000 are fully focused on blockchain applications, while Beijing’s crackdown on crypto exchanges could be in response to the central bank’s concerns about broader economic trends cited in its stability report. This is of course separate from the country’s pending release of its central bank digital currency…

· Thailand’s SEC plans to revise the country’s crypto rules to make the country more competitive on the global scene. Bangkok in mid-2018 issued guidance for exchanges, brokers, dealers and other entities that addresses ICOs, registration and licensing, registered capital, and other governance issues. Despite a continued dearth of industry interest in basing crypto efforts in Thailand, we nevertheless see its regulatory efforts as laudatory and worthy of emulation here in the U.S.

· India, despite an ongoing debate over draft legislation that would ban cryptocurrency trading within the country, is taking its first steps to embrace blockchain, including potentially for banking and finance, with a national blockchain strategy. Needless to say, we at BitOoda are not the only ones who see enormous potential if India were to open its market to digital assets.

Europe

· Germany passed a law that allows its banks to sell and store cryptocurrencies to both retail and institutional investors, although the law also requires current exchanges and custody providers to obtain a German license to continue to operate in the country. The bill puts Germany firmly in the forefront of European crypto regulatory leadership and sets a tremendously positive precedent that could have a significant impact on global crypto adoption.

· Switzerland’s Federal Council, already one of the most crypto-friendly governments, is proposing changes to the country’s legislative framework aimed at “increasing legal certainty, removing barriers for applications based on DLT, and reducing the risk of abuse.” This move, which would amend nine different laws, is intended to improve the country’s 2018 digital asset regulatory guidance.

United States

· The SEC is reviewing its rejection of the Bitwise bitcoin ETF proposal. The approval of the first bitcoin ETF would of course be a huge step forward for the U.S. market, but we recall similar actions by the SEC surrounding the Winklevoss ETF proposal and are not getting our hopes up about a reversal of the Commission’s continued rejections.

· CFTC issued its annual report on enforcement, noting that it “continued to aggressively prosecute misconduct involving digital assets that fit within the Act’s definition of commodities”

We are not going to try to connect all of these disparate dots, but we would like to leave you with one key takeaway: it is encouraging to see countries like Switzerland, Thailand, and Germany moving to “version 2.0” of their crypto regulations. Deeper understanding of digital economics among governments is increasing their ability to formulate logical policy positions on complex issues, such the legal status of different tokens, giving them the confidence to approve pro-crypto legislative proposals (such as allowing banks to sell and store cryptocurrencies). For a firm like BitOoda, which already is looking ahead to the next generation of digital asset products and strategies, seeing this type of progress reinforces our confidence in the continued advancement of global markets.

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