[ad_1]
When Belarusian President Alexander Lukashenko met Victor Prokopinia in March 2017, the dialogue lasted an hour, but he took three times this time. The country, Prokopinia's cooperation with IT companies and with lawyers in formulating ground rules to take advantage of the emerging digital industry are encrypted currencies.
After about two years, the rules came into effect and investors could trade the currency of the currency on a stock exchange managed by Prokopinia and other companies began to launch their own encrypted currency platforms. "The idea was to create everything from scratch," Prokopinia said in an interview in London. And make sure that they are free in some aspects where you have to be free and very strict in other aspects. " Reuters contacted Lukashenko's office for his comments and referred to a report of the meeting on the presidency's website.
Belarus is part of a handful of small countries that have started to introduce digital currency regulation and their efforts can help shape the evolution of the global market and the growth of the players in the sector, brokers trading platforms.
Until now, encrypted money companies themselves often had to choose between the two extremes when they had to decide on the setting up of the activity.
Major financial centers such as London and New York, which apply traditional service regulations to the encoded currency sector, may appeal to large institutions seeking security, but the complexity of compliance and cost prohibitions prevent many new projects d & # 39; enter.
On the other hand, jurisdictional areas where the rules are light, such as Seychelles and Belize, facilitate market entry, but lawyers argue that these lenient rules could provide less protection for investors and reduce restrictions on investment. money laundering.
Countries such as Belarus and other countries, including Bahrain, Malta and Gibraltar, are trying to create a third track between these two paths by developing specific rules for the encrypted currency sector. They bet that they can attract businesses by combining regulatory security with incentives such as tax breaks.
Even if success is not guaranteed, coded currencies are a rare opportunity for these countries or regions to conquer a share of the emerging market, which implies investment and job creation at a time when major financial markets are adopting a more conservative approach.
Another risk in setting rules for a sector experiencing rapid and unpredictable change is that these rules can be quickly overestimated.
Aditya Mishra, co-founder of ZBX, said that another benefit for starting a business in a smaller country is the close communication that companies can maintain with regulators, which might not be possible in a big financial center. Bahrain has also facilitated access to the Gulf markets, he added.
Another currency trading platform, namely Exchange, started trading in Minsk, capital of Belarus, this month, in order to attract market investors from the Commonwealth of Independent States (CIS), which includes Russia and the former Soviet republics.
The co-founder of the company, Igor Snigko, said that Belarus was the best option because it had a regulatory framework that was lacking in other countries in the region.
Belarus is required to provide accounting controls to issuers of digital currency and detailed information on the projects on which the issues are based. For trading platforms, the rules include the surveillance of suspicious transactions in order to comply with international standards for money laundering.
"For many, the CIS market is very promising and very dangerous at the same time." Many high-level players still fear one factor: the lack of transparency We did not want to work in any "gray" jurisdiction.
Belarus offers tax exemptions to companies that extract and trade encrypted currency. The rules, which PricewaterhouseCoopers calls "non-stick islands," also include less restrictive regulations on currency restrictions and visas.
On the other hand, transactions in digital currency are taxable in the United States. In Great Britain, capital gains taxes apply.
The iXchange platform first studied the situation in other countries, including Estonia and Malta, before choosing Belarus because of its proximity to its target market.
Personalized approach
It is difficult to estimate the size of the global encrypted currency sector because of its complexity and lack of transparency. However, Research & Markets, based in Ireland, estimates that the sector will reach $ 1.4 billion by 2024, against only $ 1 billion this year. Other estimates predict faster growth.
The regulation of encoded currencies varies around the world. While the disclosure of its currency by Facebook, Libra, signals a coordinated response against the currencies encoded by the major economic powers, the approach is always different from one country to another.
China has banned fully encrypted currencies, while an Indian government commission last week recommended a similar action.
"Working in a large financial center has obvious benefits, such as the ease of hiring highly skilled workers," said Sui Chung of Crypto Vbadiliates, a London-based CFE futures market.
"Working within a well-established regulatory framework can allow companies to enter deeper and more liquid markets and bring greater certainty to securities law," said co-author Ann Sophie Klots. a study on encrypted currency regulation at the University of Cambridge.
"Maybe that means you have a more sophisticated investor base and better access to capital.This is also an important factor of reputation."
Indeed, the codified monetary rules are not limited to Belarus and Bahrain, but some large countries such as France and Japan have taken steps in this direction.
However, the Cambridge study shows that smaller countries tended to adopt a more sophisticated "on demand" approach. (Reuters)
Islands and no sticks
The Singapore-based encryption company ZBX has decided to launch next month an encrypted currency trading platform called Kiom, aimed at institutional investors such as high-volume trading companies and hedge funds. The company has decided to launch this activity in Manama, capital of Bahrain, and summarizes the considerations faced by the disaster faced by many actors in the sector. Zambix's director, Ramani Ramachandran, said the company had ruled out the idea of working in the system of foreign transaction units, with or without limited regulation. He added that such a rule could deter big investors as regulators and global politicians step up control over digital currencies. "With the maturity of the market, as in the case of conventional money markets, large financial institutions will increasingly turn to regulated stock markets like Kium instead of the light foreign exchange markets," he said. . In February, Bahrain put in place rules for digital money companies such as trading platforms, including strict customer controls, governance standards and cyber security risk limits. Ramachandran said that operating in small localities such as Bahrain is generally much cheaper in terms of compliance with the rules and management cost compared to major financial centers. ZBX estimates that these costs could rise to around $ 200,000 a year in Bahrain, compared to at least $ 750,000 in London.
[ad_2]
Source link
