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- Regulations from China and the US, have led to Bitcoin shedding more than half of its value within a week
- Environmental concerns in China and reporting issues in the US were the topics in limelight before Elon Musk stole the show with his tweets
- Hong Kong and Singapore have taken steps to curb funding of terrorism and money laundering activities via digital currencies
Money laundering activities and scams have shook the financial system of many countries. With the advent of digital currencies like Bitcoin and Ethereum, the opportunities have thus increased. Moreover the harmful effects of mining on the environment has led China to ban such activities. Tesla’s recoup of accepting Bitcoin as a means of payment has also hurt investor sentiments. Economies of Hong Kong and Singapore are shaping the regulatory framework around such digital currencies.
Leading the path towards a safe future
Singapore is the first country to come up with a regulatory framework for digital payment token services. The government has formed a law that requires exchanges to register themselves with the regulatory authorities in the country for their smooth functioning.
Its robust Payment Services Act has initiated the formation of licensed entities dealing in cryptocurrency. Although regulators will not be able to regulate the currency, it will allow them to regulate the companies for the betterment of the society.
On the other hand, Hong Kong has tightened its grip on the latest addition of asset classes. A two-month consultation period that began in November last year has made the Financial Services and Treasury Bureau impose a hefty fine of HK$ 5 million and imprisonment of seven years for unlicensed activities within the country. It will also reprimand non-compliant activities carried out by crypto companies.
Framework adoption hindrances
Given the small scale of business and the volume of cryptocurrency trading in Hong Kong and Singapore, the implementation of policies has been smooth and welcoming by all parties in the ecosystem.
However, there are several obstacles for countries like the US, China, the UK and Russia to overcome. The large number of investors and players present in the crypto space already adds a second layer of obstruction.
Regulations will defy the core benefit of decentralisation and hence will not be attractive to new investors. The European Union will have to consider the views of all countries within the group before it can come up with regulations in the crypto sector.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
