Section 7: Regulation developments overview by country



  • The Financial Services Agency of Japan recently declared that it would increase its oversight of cryptocurrency exchanges to stamp out money laundering. With the Financial Action Task Force (FATF) visiting the country in the fall of 2019, Japan hopes to gain a favorable rating from the intergovernmental body.

  • E-commerce firm Rakuten launched its own cryptocurrencies exchange.


  • Shinhan Bank signed a memorandum of understanding with financial technology start-up, Ground X, and blockchain developer, Hexlant, to develop a blockchain security system.

  • Observers have witnessed a growing number of Korean blockchain projects leaving the country. Reasons for this include stricter internal controls on cryptocurrency exchanges, wherein investors are not able to make or withdraw deposits in Korean won on Korean exchanges, resulting in low transaction volumes.


  • Overall, regardless of the controls on cryptocurrencies (and currencies in general), China has been identified by international observers as taking the lead, in technological terms, as far as blockchain is concerned. This comment is also valid of 5G and artificial intelligence; the Chinese State Council has included a focus on these technologies in the nation’s 13th Five-Year Plan, and in 2018, President Xi Jinping said, “China seeks to lead in innovation worldwide”, citing blockchain, AI, the internet of things and other technologies, as the driving forces. This says a lot about China’s national goal to reach and stay at the forefront of technological innovation in fields that have been identified as strategically important to the country’s near-term future. China, with its vast talent + capital resource, is succeeding in taking the lead.

  • Chinese universities are imitating other initiatives (such as MIT) to issue diplomas to their graduates with student credentials registered on a blockchain.

  • A Chinese court has ruled that Bitcoin is “virtual property”. This is a recognition that Bitcoin ownership is legal in China.

  • A blockchain invoicing system has been tested by Shenzhen city, to track official purchases, and to fight tax evasion. In one year of operation, the system handled six million invoices to the value of half a billion euros, involving 5300 companies.

  • State-run China Telecom announced its 5G-era SIM cards will be blockchain ready (for Ethereum, that is, Ether and Ethereum-deployed tokens), and will even allow devices to act as nodes. The researchers declared that, in their view, Blockchain is “the only technology that can enable users to secure their data in the coming 5G era, regardless of the data’s volume, variety or dimension.”

  • Finally, China is said to be finalizing its crypto-renminbi, which could be issued to seven institutions, including Tencent and Alibaba, as early as next November.


The recent social unrest in Hong Kong has sparked local interest in the money that is not under the control of the government, especially cryptos that are anonymous (ZCash, Monero). This has been fueled by fear generated by the arrest of activists identified by the authorities on the social networks. This, in turn, has led to a market premium in Hong Kong for these crypto-assets on exchanges. This observation is further indication that cryptocurrencies receive a keen interest wherever there is political uncertainty or failure of a state. Similar to the way that Facebook and Telegram helped to organize the Arabic Spring, cryptocurrencies have a role to play in struggles against oppression worldwide. Note: importantly, cryptocurrencies are not currently banned in Hong Kong, as they are on the mainland.


  • The chief of the Philippines' central bank has warned of the risks of increased cryptocurrency use in the country. Their primary concern is the risk of terrorism financing.

  • The UnionBank has performed a pilot for blockchain-based remittances – a crucial source of wealth for the country, given the number of Filipinos working abroad: in this case, the test was conducted with money originating in Singapore.


The central bank of Singapore and its Canadian counterpart (MAS and BoC) have conducted a very interesting trial. Both banks have different DLT systems that they rely on: Corda for MAS and Quorum for BoC. 

The test involved successfully executing a payment versus payment operation (PvP), thanks to a hashed time-locked contract, that worked without the use of an intermediary.


  • Thanks to its proactive enactment of cryptocurrency laws related to the offering of digital assets and existing pure cryptocurrencies, Thailand is increasingly being viewed as a haven for cryptorelated businesses.

  • The Bank of Thailand has built a prototype solution to settle interbank transactions on a blockchain. Although not yet available to the public, it is still a significant step taken by Thailand.


  • The Malaysian securities regulator has registered the operations of three exchanges: Luno Malaysia, Synergy Technologies, and Tokenize Technology, giving them 9 months to comply with all regulatory requirements fully.

  • Overall, the administrative signals given by the Malaysian government are now more positive.


  • Officials are blowing hot and cold in India. The official position is very messy, which is in sharp contrast, for example, with the clear view taken by the government of China. After showing some signs of softening, the Indian regulator demonstrated once again that the country is divided at the highest level concerning the issue, saying it was considering a full ban of all cryptocurrencies – “One step forward, two steps back”, as the saying goes. As of early June, fears of a blanket ban were rampant, but as the second term of N. Modi started, no such action materialized. On the same day, an Indian panel, under the responsibility of the Ministry of Electronics and Information Technology, proposed fines and up to 10 years jail time for using cryptocurrencies in the country. And the same day you hear an official saying that there is no official ban of cryptocurrencies in India… the soap opera continues.

  • An Indian delegation visited Crypto Valley in Zug, Switzerland, to exchange views with Swiss officials and gain insight that could assist in making wise decisions back on the subcontinent. The take-away for the delegation seems to have been a validation that states can take advantage of the technology to gain efficiency, but, in India, this would require deep reform beforehand (or simultaneously), of systems including education, taxation, etc.


Iran’s government is close to passing a bill that finalizes regulation for cryptocurrencies. Mining activity will be allowed, although subject to official approval and an energy fee. The ban on cryptocurrencies will also be lifted, although payments made with cryptocurrencies are still not legal – at least ownership of crypto assets is not prohibited.


  • Dubai continues to make headlines about being at the forefront of smart city technology. Blockchain is, in that sense, only a part of the effort of the emirate. Several initiatives have been proposed to study ways in which blockchain can transform the city.

  • On the financial sector side, instruments of Islamic finance (sukuks, etc.) can be tokenized, just like any other financial instrument. Discussions are being held in Dubai to provide this service, based on Corda.


  • The Israeli Supreme Court has ruled in favor of a crypto business that was denied the continuation of traditional banking services. Bank Leumi was ordered to keep Bits of Gold's (the country’s biggest crypto exchange) account open.

  • While the “start-up nation” lives up to its reputation by having many thriving DLT-related ventures, the country is increasingly critical of the burdensome bureaucracy that impairs the faster development of business.



  • Dmitri Medvedev, the Russian Prime Minister, has expressed the view that “as cryptocurrencies lose popularity, regulation isn’t a priority.” Maybe has he spoken too fast...

  • In applying Federal Law No. 115, “On Combating Money Laundering and Terrorism Financing”, Sberbank is demanding its clients provide data on their cryptocurrency revenues.

  • Russia is considering using gold-backed cryptocurrency for settlements of fiscal balances with international partners. What is careful about Russians is that they are pragmatic and do not hesitate to go in boldly when it is evident that to do so makes sense. We have already repeatedly stated how convinced we are that Gold will make a big come back as a currency, and it looks like this Russian initiative supports this belief. Let’s carefully monitor how this develops; no doubt, the US will fight it with all their strength to maintain the predominant role of the dollar.

  • A different piece of news comes from a Duma committee, which is debating whether mining activities should be banned (and people engaging in being fined).


  • SIX, a Swiss exchange, is considering issuing its token using an Initial Digital Offering. They have chosen Corda as the technology, mainly due to the requirement to implement transaction privacy. The resulting exchange, to be named SDX, is the result of significant investment. SIX is continuously approached by various entities in attempts to issue warrants, structured products, real estate funds, etc. This indicates that SIX and its clients consider it is merely a matter of time before tokens will replace shares.

  • Avenir Suisse, a think tank, released a report urging the Swiss National Bank (SNB) to start working on a national cryptocurrency. In their view, “It would facilitate tokenized securities trading if the National Bank and major players in the industry were to drive the development of a Swiss franc token.” 



Engineers at a nuclear power plant have been arrested for mining cryptocurrencies with a supercomputer. Connecting it to the internet was in breach of the plant’s safety.


  • The London Stock Exchange has outlined how it will be using DLT. It has invested in a start-up that claims to have created the first
    “automated” crypto-denominated bond – it is unclear why the LSE considers that such an instrument is technically challenging to develop. The exchange can “see a use for blockchain in processes like issuing securities and settling trades.” Really? LOL. These guys are geniuses.

  • The Bank of England has declared that it intends to open its vaults to tech companies. This means that it plans to provide a custody service for stablecoins to store reserve assets directly in its facilities. That is quite a recognition and legitimizes initiatives on fiat-collateralized tokens.

  • Prime Factor Capital is the first crypto hedge fund registered as such by the Financial Conduct Authority of the UK and is thereby explicitly authorized to invest exclusively in crypto assets


Sweden has gone further than any other society in removing cash from circulation: less than 20% of businesses accept coins and notes, which accounts for less than 2% of transactions in the country. Talk about issuing an e-krona by the Riksbank (central bank of Sweden) is not as prevalent as it was in early 2018, but plans are still in place to do it; it is now merely a political decision to start the experiment.



Authorities have confirmed that crypto trading and crypto payments are tax-free in Portugal.



The Ministry of Economic Development is reported to have urged the Agency for digital technology (Agid) to adopt fintech to define legal guidelines for blockchain innovations. The regulatory environment is intended to be designed for various blockchain innovations, including cryptocurrency.



Loi Pacte has been validated by Conseil Constitutionnel, and Autorité des Marchés Financier (AMF) is now in a situation to study ICO projects to verify those that are compliant with its guidelines. These projects are to be whitelisted by the watchdog and will benefit from this publicity: they receive an official “visa”.


French ECB policymaker François Villeroy de Galhau has said that stablecoins linked to real currencies are “promising”, and he is following the development of these tokens closely.



Members of the ruling CDU/CSU party have declared that it is studying the feasibility of introducing a tokenized euro in its public services.


After diplomas, Malta intends to promote the recording of rental agreements on blockchain. It’s a familiar theme: to try to force some usage of the technology domestically to justify the perception of being the blockchain island, where progress is achieved first.



 •A government agency is reported to have asked Deloitte and LiteLink to work on a blockchain supply tracking solution.

•Canadian and US regulators have fined Mr. Tapscott, CEO of NextBlock Global, for breaching the securities law – namely, having made a false statement in their US$16 fundraising effort.

•Several Canadian banks, including CIBC, Desjardins, RBC, and Scotiabank, are launching the use of Verified.Me, a blockchain-powered identity verification solution from SecureKey. This is an attempt to give customers control of their identity data.

•The Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada have released papers for public feedback, on proposed cryptocurrency regulations, to which the principal exchange, Kraken, has replied with significant disagreement and heavy criticism. One of Kraken’s primary concerns in its reply is that neither cryptocurrencies nor the agreements between exchanges and users constitute a security.
•The business-friendly tone adopted by Hydro Québec towards the crypto-mining industry is confirmed: an auction for an allocation of 300 MW of power targeting this business segment was recently  conducted.


The development of exchanges is reported to be soaring, particularly in Mexico. This is consistent with the rest of Latin America.


The Bahamas Securities Regulator has proposed rules for token sales: that is, crypto-assets that are not deemed securities. These rules include imposing disclosure requirements for project proposals, and anti-money laundering precautions.


Bermuda’s officials are actively promoting their dominion as a fintech hub. Their meetings with prominent blockchain entrepreneurs and companies have gained some exposure.


  • The US is a significant player in the DLT field due to the sheer size of its economy, the advanced education of its population, and the large and unprecedented amount of available capital. However, in no small extent, it appears to be an “incumbent” superpower that has a position to lose by having China and other nations make faster progress, and more willingly embrace all sorts of disruptions promised by DLT. The least of which is, of course, the challenge it poses to the USD-dominated world monetary system, which is used by D. Trump and his administration as an all-out weapon in the trade wars they are waging. Most of the criticism towards cryptocurrencies comes from the US, led by JP Morgan’s Jamie Dimon, followed by PE/VCs and fund managers like Berkshire Hathaway’s Warren Buffet, who regularly express their disgust. Even most tech gurus, like Bill Gates and Elon Musk, display mixed feelings, as do the Fed’s and SEC’s officers, of course. As a consequence, it looks like, by their standards, the US is lagging in the DLT revolution. Some local observers have expressed concerns that the country is losing the race right now if it does not react.

  • Moody’s has expressed concerns about a systemic risk that the usage of cryptocurrencies would impose on the financial system, due to a “counterparty concentration risk” when using blockchain. Well, while this may be a correct observation, it looks like it will always be less concentrated than the USD!

  • Recent interactions with the SEC have shown that their officials have a high level of knowledge, even in the technical aspects of smart contracts. That proves the institution is resolutely studying crypto assets.

  • Utah is considering notarizing vehicle registrations on a blockchain, with benefits that include a substantial cost saving, compared with the current process.

  • CoinBase has published a “United States of Crypto” document, with bullish views. Unsurprisingly, they report an increasing awareness. The most impressive figure is undoubted that 15% of Americans polled say they are somewhat likely or very likely to buy cryptocurrencies.

  • Following Libra's announcement, there were many reactions in the US. President Trump tweeted that he was not exactly a fan of bitcoin and cryptocurrencies, nevertheless some observers see this position as an indication of awareness that cryptocurrencies are achieving mainstream acceptance and affecting decisions at the highest level. The US Congress was impressively quick in sending a letter to Facebook’s CEO, requesting that a hold be placed on Libra until the consequences this cryptocurrency can be established. Repeated hearings of Congress have been scheduled and conducted, with the concern that Libra could endanger the financial system, not only due to AML/CFT concerns (classic) but most importantly, due to the fear of a loss of sovereignty – and this is new.

  • The US Air Force has signed contracts with two blockchain companies: Simba Chain and Constellation. The goal is to “securely unlock traditionally siloed and non-accessible data and data sources”



A pharmacy chain, Farmarket, is now accepting Dash cryptocurrency. Traki, a department store chain, has announced that it will implement the PundiX payment solution, which acts as a financial intermediary, but enables the seamless spending of cryptocurrencies.

Maduro is still in charge, despite the unresolved political crisis. His opponent, Guaido, has claimed power, but discussions are at a dead-end. Meanwhile, the infrastructure around the Petro is advancing, and the national airline has started to accept the Petro.


  • Brazil has established a committee composed of 34 members to advise on cryptocurrency regulation. However, President Jair Bolsonaro publicly expressed his doubts on Bitcoin after approving the suspension of a crypto project to provide banking services to indigenous people - despite admitting that he does not know much about the technology.

  • The municipality of São Paulo has decided to use a blockchain for its public works projects. The Secretariat of Urban Infrastructure and Works has contracted a blockchain firm, Construtivo, to implement a technological solution to register data related to all construction projects in the city. This initiative follows the closure of several roads and bridges due to poor quality and is an effort to introduce more transparency.

  • On September 1st, 2019, Álvaro de Medeiros Mendonça became the first new-born to be registered on a blockchain. The notary service is based on a Growth-Tech implementation of an IBM technology. The child registration process has three stages. First is the “Live Birth Statement” produced by the hospital. The parents then create a digital identity on the platform, after which the information is sent to the notary office to finalize the certificate. Even if the goal is to make the process fast and efficient, thus eliminating oppressive administration, it remains to be seen how this company plans to manage all this personal data on this platform.

  • The payment processor, Cielo, with 1.4 million point-of-sale devices, has announced it is now supporting Bitcoin and other cryptocurrencies. Later in 2019, customers will be able to use an app to purchase cryptos. This is a considerable facilitation that will enable 200 million individuals to access cryptocurrencies. 


More positive comments are being expressed around Argentina’s crypto and blockchain scene. Technologically, it is not clear how the country will emerge from its severe economic crisis, but what is certain is that the Argentinian currency is likely to depreciate further due to the very high inflation rate, compared to foreign fiat (and especially, of course, the USD). This is fueling the interest of the Argentinian population in adopting Bitcoin and other cryptocurrencies.



The strict ban has been lifted, thereby allowing for licensed cryptocurrency companies. This ends a situation that arose after a fatwah was issued by the Grand Mufti of Egypt, who identified cryptocurrencies as being too volatile and prone to scams, and therefore not compliant with Islamic law. The passing of the bill gives the board of directors of the Central Bank of Egypt the right to regulate cryptocurrencies, and issue several potentially expensive licenses that will be required to do business.


The country is trying to become a blockchain hub, though it is not very visible on the radars.



More than 6,000 farmers in Kenya use the Shamba Records platform. It provides users with data collection, mapping, and payment aggregation. It proposes to make local farming more efficient and allow farmers to access financial services more efficiently.



South Africa’s United Africa Blockchain Association has announced a plan to train one million African individuals in blockchain, starting with a “train the trainers” program.




New Zealand now allows employee wages to be paid in cryptocurrency. This can be considered as a relatively progressive move in the Pacific!



  • The Australian Securities and Investments Commission (ASIC) has published an update on how it intends to regulate crypto-related businesses and ICOs. The requirements outlined include the need to be licensed if the issued crypto assets are securities.

  • The ASX, the country’s stock exchange, has invited clients to test its newly developed blockchainenabled alternative securities management system. It is a work-in-progress that started in 2017, with a company, Digital Asset, working on it. A live rollout is expected in 2021. Australians are among the most aggressive in this application field.

  • The Australian Tax Office has started compiling records from cryptocurrency exchanges to remind traders of their tax obligations.

  • Talks about transitioning to a cashless society are gaining momentum in Australia, at the same time that increased control is being imposed on transactions: cash payments will be limited to AUD$10k if a bill passes. This will clear the way for some cryptocurrency usage, although possibly only tokenized fiat.


To conclude this section, we would like to outline a range of criteria that we are going to use in the next Quaterly reviews to evaluate front-running countries in the adoption of crypto assets:


  • Allowed possession of cryptocurrencies.

  • Allowed fiat to be traded for cryptocurrencies.

  • Allowed mining of cryptocurrencies (or various restrictions).

  • Allowed utility tokens to be offered to the public (ICO).

  • Allowed tokenized securities to be offered to the public (STO).

  • Ratified laws to regulate financial institutions, to clarify how to handle crypto assets.

  • Introduced licensing framework for cryptoexchanges.

  • Introduced extraterritoriality of crypto laws for services offered to its citizens.

  • Enforced other countries’ crypto laws.

  • Defined tax rate on crypto asset gains.

  • Imposed anti-money laundering, and counterterrorism financing regulations on financial institutions.

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