Almost two years ago, the Bank of Lithuania released a blog post announcing its position on virtual currencies and ICOs.
According to the announcement, financial market participants were barred from engaging in the sale of virtual currencies and also from linking their services to virtual currencies. Otherwise, those that provide such services will have to ensure very strict compliance with the requirements for the prevention of money laundering and terrorist financing.
Today, the Board of the Bank of Lithuania is responding to ‘dynamic market developments, changing foreign positions on virtual assets and seeking to ensure a level playing field for all financial market participants.
The board has updated its position on the distribution of virtual assets as well as primary virtual assets. This position targets the already established financial market participants and also the ones seeking to distribute the virtual tokens of virtual assets in Lithuania.
The Concept of Virtual Assets Replaces the Term Virtual Currency
In as much as the two terms relate to the same thing, they are entirely different. Frequently, the term virtual currency is used to define a type of digital currency that is only available in electronic form and not physical. A virtual asset, on the other hand, is a representation of currency in some environment or situation. It can either be in the form of virtual currency or property that has value in a specific environment.
According to Lithuania’s update, the document states how and when investment funds investing in virtual assets can be created and also defines other vital issues related to virtual assets investments. It is indicated in the update that;
‘’Financial market participants should not be involved or provide services related to virtual assets, the activities should be clearly separated from the activities related to virtual assets.’’
Although financial market participants are still banned from receiving payments from virtual assets, the update has paved way for crypto payments.
This new position also provides for the creation of investment funds for professional investors looking to invest in virtual assets. Thus it ensures a level playing field for financial participants.
Also, due to the current change in market patterns, the update bans financial market participants from accepting virtual assets by committing them either with or without interest. These participants cannot provide loans or take out collateral with virtual assets.
With the increasing demand for virtual transactions and virtual assets such as cryptocurrencies, regulators are taking a keen eye on the industry. The developments has brought varied responses from regulators across the globe in a lot of different areas including exchanges, trading and mining of crypto currencies, crowd funding, Initial Coin Offerings (ICOs), and financial products.
Global regulators are divided on how to keep up with the fast growing cryptocurrency industry. Because most virtual currencies are not backed by any central government, each country has varying standards. While other countries have open heartedly welcomed the use of virtual currencies, others have really come hard on it.
A Warning Issue to the Trinidad and Tobago Nationals
Just recently, the regulatory authorities issued a warning to the Trinidad and Tobago nationals who are conducting transactions in virtual currencies or are investors in the same, urging them to be careful of various schemes promising high returns. The Central Bank of Trinidad and Tobago (CBTT), the Tobago and Trinidad Securities (TTSE) and the Financial Intelligence Unit of Trinidad and Tobago (FIU) clearly stated that virtual currencies do not have legal tender status in Trinidad and Tobago, this is despite the fact that the authorities recognize that investing in digital currencies can promise a lot of benefits.
According to a publication from TV 6, the authorities said that;
‘’Providers of virtual currencies are neither regulated nor supervised by the authorities at present and there are currently no legislative provisions under the authorities’ purview that provide protection to consumer for losses arising from the usual of virtual currencies.’’
A Positive Outlook
This seems to be a good thing as the authorities are additionally warning users about the risks that come along with unregulated virtual currency companies. They warn that; ‘’ unregulated virtual currency companies may lack appropriate internal control and may be more susceptible to fraud and theft than regulated financial institutions.” Also, the authorities warn users that because of the currency’s high volatility, they can be unsuitable for most investors especially those looking for long term invesrments.
According to the authorities, transactions involving virtual currencies are usually anonymous and can therefore quite easily be associated with money laundering, terrorism financing or other criminal activities. The authorities however promise to continue monitoring activities that involve the use of these currencies.
The cryptocurrency industry has seen major advancements despite prices taking a dip in 2018. The advancements majorly revolved around increased acceptance of Altcoins which, consequently, led to an increased need for formal recognition of cryptocurrencies in economies across the world. The unique nature of digital currencies in comparison to fiat currency has slowed down the process of legislative regulations the world over. On January 2nd, South Africa hopped onto the push for a regulated space for cryptocurrency in her economy. This is because for any currency to be regarded as legal tender, it has to get some form of green light or backing from the state.
Cohesive and Comprehensive regulatory response
The drive, led by the Minister for Finance-Tito Mboweni, wants a cohesive as well as a comprehensive regulatory response to cryptocurrency in the country. In a letter dated January 2, the government announced that it had created a regulatory working group to steer the matter. The group comprises of thought leaders and representatives drawn from various South African agencies.
The letter from the minister was addressed to parliament. It implored parliament to come up with the substantive legislation from the ministerial directives in the letter. The directive included among others: The formation of a regulatory group towards government response to cryptocurrencies and the underlying technology. Also, parliament would have the working group’s detailed research on a unified cryptocurrency regulatory standard throughout South Africa.
Growing Digital assets economy
As with other regions around the world, the cryptocurrency industry in South Africa is growing rapidly every day. Multiple studies conducted last year indicate that 70% of South African consumers define cryptocurrency along the same lines as investments. The respondents also registered positive investor sentiments with regard to holding onto their cryptocurrency investments in the long run – despite price fluctuations.
2018 alone saw the industry grow by 25% in the country. In terms of market activity, Bitcoin traders Local Bitcoins saw its volumes swell. All these indicate a growing market that called for immediate regulation to ease trade in cryptocurrency and to also ensure that it is safe.
Informed by these developments, the South African Revenue Service (Sars), South African Reserve Bank, Treasury, Financial Sector Conduct Authority, and Financial Intelligence Centre came together under the umbrella of a cryptocurrency working group to better arrest the situation. CRYPTO IS COMING!
It appears as though the state of Vermont is seriously exploring the potential of blockchain technology. The state is the second-smallest by population in the United States, and the announcement was made by Vermont attorney general T.J. Donovan.
In a statement, Donovan said: “In an era of persistent data hacks, security breaches, and online activity, exploring new and innovative ways to protect our data is essential. And, we must strive to balance economic opportunity with consumer protection.”
Vermont has apparently established a working group of state agencies to explore the potential of blockchain. The agencies include the Agency of Commerce and Community Development, the Secretary of State, the Department of Financial Regulation, and the Office of the Attorney General. The working group will not be working without any feedback, as input will be provided from stakeholders, blockchain associations, and industry experts.
The group will explore challenges and concerns with distributed ledger technology in hopes of finding out whether blockchain-specific legislation should be deemed a priority or not. The state has a vibrant agricultural economy, and Donovan views blockchain as applying to that particular sector.
He stated during an interview: “I think food is a big one – tracking where food is coming from, all the way from farm to table. Whether or not we’re looking at a potential marijuana industry in this state, to make sure that it’s safe, that it’s not gonna impact public health or the public. So, it really gives you, I think, security, in tracking back where things went.”
This is not the first time that the state has addressed blockchain technology. In fact, the governor of the state, Phil Scott, signed a bill in August that would review exactly how blockchain could apply to record-keeping.
He said: “This new legislation holds the promise of making government more efficient, cost effective, and ultimately saving Vermonters money.”
Game Changer: Binance and LCX Crypto Exchange Joint Venture
Nobody puts Baby in the corner. Since it’s inception in 2017 Binance has dominated the crypto exchange world. Binance reached the highest volume of any exchange just six months after launch and valued at almost $2 billion within the same time frame. Crazy growth.
And the story doesn’t end with massive volume, it continues with Binance expanding with international initiatives in Bermuda, East Africa (Uganda), Malta and now Lichtenstein. The successful joint venture of Binance and Liechtenstein Cryptoassets Exchange (LCX) heralds the launch of a fiat-to-crypto exchange: Binance LCX. This, ladies and gents, is a game changer. For in depth understanding of the venture check out our latest piece here.
The overall cryptocurrency market has shown strong signs this past week growing from $216bln to $232bln representing a 7% increase. If you are on Crypto Twitter then then you may attribute this to crypto twitter personality Romano recently eating a$$. Or it could just be that the bears have lost steam (I prefer the former explanation). Could the bear market be coming to a close? Along with bitcoin the top 5 (and top 100) also surged as evident from belows screencap from Livecoinwatch.
Bitcoin (BTC): Never a dull moment in the crypto market. If you wan’t peace, head over to the stock markets. We be riding a ragin’ bull here. Week to week we experienced a very nice bump in price returning to $7,000 and settling on $7,065 as of this post. This represents 5.7% growth. We’ve been in this bear market for 8 months, are we seeing a turnaround?
Ethereum (ETH): Showed more sideways movement compared to Bitcoin but positive nontheless. ETH has taken a beating since July so any news that is positive is good news. ETH currently sits at $281 as of this post experiencing a slight increase of 3% week to week.
Neon Exchange (NEX): NEX, also known as Neon Exchange, is a platform for payment services and decentralized crypto trade. NEX aims to combine the performance of centralized exchanges with the trust and security features of decentralized exchanges.
What makes NEX different from other DEXs? Crypto enthusiasts are all looking forward to a day when one can have cross-chain transactions. Imagine sending bitcoin tokens to an Ethereum wallet. Well, NEX is bringing that reality closer by allowing trades between Ethereum networks and tokens based on the NEO platform. It’s apromising project which recently announced their Public ICO.
If you are interested in to learn more about NEX check out our what is guide here for more details.
WHAT’S NEW AT CRYPTO IS COMING
What is Ethereum’s Casper update?– Casper is Ethereum’s chosen Proof of Stake protocol, headed up by team leader Vlad Zamfir. The protocol implements a process the dev team claims can punish malicious elements.
What Will Bakkt Do For Crypto? – The Intercontinental Exchange, operator of the world’s largest stock exchange, launched Bakkt, a global cryptocurrency platform allowing private and institutional investors alike to buy, sell, store, and spend digital assets like Bitcoin. The crypto market cap is about to explode. Yippee ki-yay.
What Is Bitcoin Second Layer Rootstock (RSK)? – Rootstock is an open-source smart contracts platform that allows seamless DAPP development and more miner rewards through merge-mining. At the foundation, RSK will be a scalability solution to Bitcoin.
UBS Bullish on Blockchain, Bearish on Bitcoin– Don’t tell that to the bulls trying to turn around the market. CEO of Swiss investment banking giant UBS, Sergio Ermotti, came out with a bold claim recently. He said that blockchain was “almost a must” for business.
A Programmer Ate Ass to Save Cryptocurrency– Cryptocurrency prices are down, so a developer met up with cryptocurrency enthusiasts and adult film performers Brenna Sparks and Bobbi Dylan to eat some ass and save the market.
China’s Search Giant Baidu to Censor Crypto Discussion– The great crypto firewall of China is real. Baidu has recently started censoring cryptocurrency-related discussions on its online forums. The search giant’s move is in line with China’s crackdown on cryptocurrencies.
World Bank launches world-first blockchain bond– The World Bank has priced the world’s first public bond created and managed using only blockchain in a A$100 million ($73.16 million) deal designed to test how the technology might improve decades-old bond sales practices.
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