Section 7: Regulation developments overview by country

The following section offers a collection of updates summarizing private and official positions towards blockchains in different countries and geographical areas.


In Asia, more than anywhere else, the enthusiasm for cryptocurrencies and DLTs has anything but vanished. The blockchain is no longer the craze it was a year ago, but as people adjust their approach, and as the technological expectations mature, investors and start-up teams are more active than ever, in terms of the people involved, money spent, articles published, and social network activity.


The Japanese regulator has dismissed the idea of allowing bitcoin ETFs and futures, saying: “Taken it into consideration that it is difficult for us to find constructive and social significance of trading crypto-assets derivatives at present, we think that there is no need for trading crypto-assets derivatives at financial instruments exchanges where many market participants can trade.”

A company linked to the internet group, Digital Garage, is investigating the issuance of a yen-pegged stablecoin.

E-commerce firm, Rakuten (often referred to as "the Amazon of Japan"), has announced the set-up of a new payments subsidiary that includes its The following section offers a collection of updates summarizing private and official positions towards blockchains in different countries and geographical areas. cryptocurrency business. They aim to integrate and exploit the synergies between the prepaid card service and the crypto exchange that Rakuten acquired last year.

In Tokyo, there is the talk of experimenting with a blockchainbased consumer payment network for the Olympic Games in 2020, with a target processing capacity of one million transactions per second. The Japanese government is behind the project in an attempt to reduce the usage of cash notes and coins, which Japanese citizens prefer, but which are costly to maintain.

South Korea

In January, South Korea introduced some tax incentives for DLT development, by adding blockchain to the list of research and development fields that qualify for a tax credit. This move is intended to help the sector through a difficult period, which saw the price of crypto-assets decline.

Government agencies have conducted a security check on 21 South Korean crypto exchanges; two-thirds of the audited platforms failed the test.

Subsequently, the majority of South Korean exchanges are under threat from hackers—it appears that the government has identified exchanges that are the easiest prey.


More than anywhere else, Koreans used their life savings and took out loans to invest in the crypto market, and of course, they have been badly hurt by the decline in prices.


The Cyberspace Administration of China has introduced a new anti-anonymity regulation aimed at blockchain-related companies, pretending to “contribute to the healthy development of the industry.” Any business that provides information and technical support to the public using a DLT is affected. The regulation allows authorities to access stored data, and to introduce registry procedures that require users ID cards or mobile numbers to be registered. Also, it oversees content and censors information that is prohibited by the Chinese government.


Officials stated: “The blockchain information service provider shall implement the responsibility for information content security management, and establish and improve management systems such as user registration, information review, emergency response, and security protection… If the user does not perform real identity authentication, the blockchain information service provider shall not provide related services.”


The China Banking Association has launched a new blockchain-based platform for transactions. All major Chinese banks are part of the initiative, which is based on Hyperledger.


The Chinese central government is considering a revision of the income tax rules imposed on citizens. The implementation of a common reporting standard would make it more difficult for wealthy individuals to hide their wealth overseas, which could result in them buying cryptocurrencies as an alternative.

Hong Kong

Players in the industry regard the Hong Kong legal framework (SFC’s “sandbox”) as quite opaque and burdensome.



Starting in mid-January, Malaysia will regulate the crypto-asset sector as a whole. The Malaysian regulator has decided to classify digital assets and tokens as securities, without distinction. Those dealing in digital assets will be required to put in place anti-money laundering, and counterterrorism financing (AML / CFT) rules, cyber security and business continuity measures.

Guidelines have been issued to establish criteria for determining the suitability of issuers and exchange operators, set disclosure standards and best practices in price discovery, trading rules, and client asset protection.


Any person offering an ICO or operating a digital asset exchange without the approval of the Securities Commission may be punished.


The securities regulator in the Philippines has postponed ICO regulation.


The Thai stock exchange is reported to be planning the launch of a token trading platform.


Banks are still obliged to close customer’s accounts that have cryptocurrency-related transactions. Indian citizens attempt to get around this by using small amounts and never mentioning the nature of the cash movements in transaction remarks.

India continues to lag in its official position, but rumors and press releases indicate that this may change. A new government committee has released a statement that indicates it is favorable to legalizing cryptocurrencies. Even though it refers to “strong limitations,” the consensus is that “cryptocurrency cannot be dismissed as completely illegal.”

There are reports that some of India’s largest conglomerates have decided to “explore blockchain.” It appears that private companies understand some of the potentials of the technology but are not able to fully embrace it because of current government regulations. Meanwhile, the huge Indian IT workforce is willing to embrace this new world, and large numbers of Indian developers are hiring their skills to foreign start-ups, to be part of the revolution.


A Pakistan-based microfinance bank has launched cross-border payments using blockchain technology from the payments firm Alipay. The main focus is Pakistanis working abroad who want to remit payment back to their home country.


Back in April 2018, though, Pakistan took a negative stance on cryptocurrencies by barring financial companies in the country from working with cryptocurrency firms.

United Arabian Emirates

Together with Saudi Arabia, the UAE is launching an official interbank cryptocurrency. The envisioned DLT will be private, and not accessible to the public. Quite paradoxically, it will be designed to allow transactions to be reversed, as central banks may need this feature. It is likely to be based on Ripple, Hyperledger or Ethereum.


Start-ups in the country continue to struggle, and many have closed for business or at least laid off staff.


Hamas in Gaza is asking supporters for donations in bitcoin.




Rather positive news has come out of Russia, led by Deputy Finance Minister, Alexei Moiseev, who stated that “cryptocurrency’s age of pyramid scams” was now behind it—ushering in a new age of legitimacy. Another Russian source expressed the view that cryptocurrencies could have a place in a new world monetary system, where it would replace the US dollar. However, the official government policy remains blurred for the time being, as many different positions have been taken by various officials.


Anatoly Aksakov, chairman of the Duma’s financial markets committee, has revealed plans to issue a blockchain-based version of Russia’s ruble by 2022, fueling a revival of this debate in Russia. The crypto ruble would be just like the classic one, but on a new platform; this makes a lot of sense and changes little as far as the monetary system is concerned. It will be a very interesting experiment, and its impact on the banking system in Russia will be keenly observed.


Russia has been conducting crypto-assets tests: settlements using crypto instruments have occurred, the likes of which will be impacted by law to be passed at the end of February.


The Russian Deputy Finance Minister expressed the view that using cryptocurrency debit cards to pay for products or services does not contravene the local laws in any way. In other words, using a crypto card to pay for purchases is legal.


Rumors also have it that Russia is looking at investing billions into bitcoin, as a move to diversify from the US dollar, and with the prospect of further sanctions by the USA. It has already started moving its reserves to the euro and the yuan. Without a doubt, such a move would be an incredible legitimation of cryptos and would place huge pressure on demand, potentially driving prices significantly higher.


The crypto-exchange, Liqui, shut down due to lack of liquidity.


An important number of developers based in Ukraine (and Eastern Europe in general) have been actively offering development services in the field of DLT.


Exploring the bitcoin network, it is apparent that Germany is among the top countries for nodes, with around 20% of the total. It does not say much, other than the fact that the country hosts a vibrant community of crypto-enthusiasts., a food ordering platform, is now accepting payments in bitcoin.



Related to the “Gilets Jaunes” movement, some protestors have repeatedly suggested to participants in the movement that they should go to banks in numbers and withdraw their money (with the goal of creating a run, to reduce liquidity). The promotion of bitcoin by some demonstrators has been reported.



Italy has appointed a committee of 30 experts to develop a national blockchain strategy.

The European country has also made its first official statement regarding the legal framework of the blockchain, introducing several blockchain elements in a new regulatory amendment, already approved by the Senate. It declares: “the recording of an IT document through the use of technologies based on distributed ledgers produces the legal effects of the electronic time validation referred to in Article 41 of EU Regulation no. 910/2014.” That is, the recognition that blockchain notarization is legally acceptable.


Malta is consolidating its title as the “world’s blockchain island” in a smart but natural move from the Mediterranean archipelago: 12% of Malta’s GDP traditionally comes from the gaming industry (e.g., lotteries, bets, etc.). This business focus has developed thanks to the country’s history of lax regulation and a low tax rate—as low as 5%—which attracted entrepreneurs of the sector. However, one must acknowledge that the gambling industry usually attracts various types of actors, some of which sometimes have links to controversial activities.


The economic growth in Malta is 6%, the highest in the EU. To a large degree, this is due to the arrival of the crypto industry on the island, the first of which was Binance.


Their November summit was a success, with 4000 participants being welcomed in the presidential palace.



Most people on Swiss streets have no clue what blockchain is or that a crypto-valley exists in their canton—the Crypto Valley of Zug. But currently, Switzerland leverages its position as a top-tier hub for finance, and consequently for fintech (and IT by extension). Talent is attracted by higher wages and a very good standard of living in the country. Jointly, with fantastic advertising designed to promote the country as a crypto-safe haven and vibrant community. Foundations and their operating companies register in the country (say, in the Zürich-Zug-Vaduz axis) both for tax purposes and for the support of authorities eager to address the concerns of this business, and who are forward-looking in their approach to provide a business framework for these companies.


As the most concrete and recent expression of the will of the Swiss to maintain their country at the forefront of DLT business development, the Federal Council has published a very comprehensive document titled “Legal Framework for DLT and Blockchain in Switzerland.”


Swiss banks have issued a document describing accepted practices to address requests for banking services from crypto-related businesses, in a move to try to solve the problem of crypto-asset bankability.


All layers of the Swiss ecosystem are embracing DLTs. Not only are the regulators, start-ups, and banks working on it, but also universities, industrials, etc.


The Principality is resolutely striving to offer the most favorable framework possible to attract DLT-related financial service providers. The small nation has just released a law on “transaction systems based on trustworthy technologies,” thereby also proposing an alternative and an even more technology-neutral way to refer to DLTs.


The advantages of Liechtenstein compared to Switzerland are:


A supposedly easier process of opening a bank account to conduct crypto-related business.

Membership of the European Economic Area (EEA), which is about freedom of circulation, not only of people but also of goods and services. Switzerland, on the contrary, has kept border customs to manage the flow of goods and services. As such, it is supposed to be easier to serve the EU market from Liechtenstein 

Also, Liechtenstein is also using the Swiss Franc and has a 12,5% tax rate, which is very competitive, even compared with the Zug canton.

European Union:

The European Banking Authority has urged the European Commission to examine whether unified crypto rules are needed across the region. For these officials, crypto-asset related activities do not currently fall under existing EU financial laws, and since it judges these activities as particularly risky, it thinks that appropriate rules need to be put in place to protect investors.


The European Securities and Markets Authority has published a report on crypto-assets and ICOs, which advises the EU Commission Council and Parliament on the existing rules that could be applied to cryptoassets, and specifies regulatory gaps for policymakers to consider. In particular, it states that some cryptoassets fall under the MiFID financial framework and need to be classified as financial instruments.



Huw van Stennis, a Central Bank advisor, has expressed the view that cryptocurrencies fail fundamental tests for financial services, and are not high on the list of priorities: “I’m not so worried about cryptocurrencies. They’re not a great unit of exchange, neither they hold value, and they’re slower”. In short, DLT tokens are not worrying about the UK central bankers. Brexit certainly is.


It has not been possible to verify rumors that English people would be dumping sterling to buy bitcoin. However, any turmoil in the fiat world is still, of course, supporting crypto usage.




United States of America

The government shutdown has been reported to have halted the progress of cryptos on Wall Street. The closure of the Securities and Exchange Commission and the Commodity Futures Trading Commission has caused additional delays in the operation of the US regulatory frameworks. This situation adds to the voices that raised concerns that the US is lagging in the DLT sector and has been slow to address the issue. Some may recall Bill Clinton’s words in 1997: “The internet should be a place where government makes every effort… not to stand in the way, to not harm”. Twenty years later, the philosophy in the US appears to be quite the opposite.


Gemini, the Winklevoss brothers’ exchange, has paid for an advertising campaign in New York to raise attention and call for regulations in the US, claiming that the “revolution needs rules.” This indicates that these entrepreneurs feel the need for firm ground on which to properly conduct their business.

The US Securities and Exchange Commission has extended the review period for VanEck’s Bitcoin ETF to February 27th, 2019. This ETF, contrary to the previous attempts, is fully reliant on BTC itself, and not to BTC futures, which makes it more credible. VanEck is in the business of routinely underwriting ETFs, so if it fails, it will hinder the future of BTC ETFs for probably quite some time.

The State of Texas is classifying stable coins as “money,” according to guidance from the Department of Banking. This will require issuers of stablecoins to register for and acquire, a currency exchange license to operate in the Lone Star state.

The State of Wyoming has passed a bill to allow tokenized stock certificates to be issued.


The State of Colorado has introduced a bill with (limited) securities law exemptions for cryptocurrencies: the Colorado Digital Token Act.


Adena Friedman, president, and CEO of NASDAQ stated that cryptocurrencies “deserve an opportunity to find a sustainable future in our economy. Crypto thus stands at a crossroads, poised between one of two outcomes: (1) either the innovation finds practical utility followed by years of steady and sustainable commercial progress and integration into the economic fabric; or (2) the invention fails to achieve broad adoption and its commercial applications as medium of exchange are limited”.


The Federal Reserve governor, Lael Brainard, said she was “monitoring the extreme volatility of crypto prices, particularly bitcoin,” but did not believe that “crypto poses a threat to US financial stability.” However, she “urged investors to exercise caution about the highly speculative asset class” and said the Fed would continue to investigate it.


The Mexican government has announced plans to facilitate its first public blockchain-based procurement procedur




Brazilian authorities have looked at the potential for blockchain to curtail corruption and overhaul Brazil’s financial infrastructure.


President Maduro has unilaterally raised the price of the petro (fourfold, now worth 36000 sovereign bolivar). On January 14th, he proclaimed a “new monetary system.” Experts and civilians alike have expressed their skepticism. There is still no sign of a crypto wallet for the petro, the links to download it don’t work, and the Venezuelan government still strives to sell the digital currency and issue certificates of purchase to buyers. Venezuelans, meanwhile, are still fleeing the country’s dire economic situation in the hundreds of thousands. Venezuela also filed a complaint with the World Trade Organization regarding executive orders and sanctions maintained by the US, which target Venezuela and the nation’s oil-backed cryptocurrency.


There are indications that awareness and active usage has grown in Africa at a faster pace than anywhere else, with Nigeria, Ghana, and South Africa leading the pack.


South Africa

The central bank has proposed rules for crypto companies, which would impose various measures aimed at protecting the customers of these companies. The measures include compulsory registration, amendments to existing rules to frame cryptoasset management, and some KYC features, such as reporting suspicious activities.

A consultation paper was established to regulate and de-anonymize bitcoin transactions. The new laws would ensure exchange and wallet providers trace transactions and are held responsible for their customer’s usage of cryptocurrencies, similar to the role banks play in today’s financial environment.



The SEC of Ghana is considering licensing cryptocurrencies to make it legal tender.



An English-speaking separatist territory is planning to launch a cryptocurrency as a tool to free themselves from the central government.




The parliament in Australia has passed a shocking law: it states that backdoors should be implemented to all encrypted communications, to enable officials to monitor crypto activity. Even if this is not yet signed and in force, this statement would henceforth make blockchain technology non-compliant under Australian law.


New Zealand

Cryptopia, the Kiwi exchange, has been hacked and has been closed by the NZ authorities for investigation.

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