2017 was a very interesting year for cryptocurrencies after Bitcoin and other altcoins got the attention of investors, speculators, and governments. The bickering between the critics and supporters of cryptocurrencies also generated news reports to pique the interest folks who are generally fascinated by interesting stories. The explosions of ICOs introducing different kinds of coins to the markets also supported the thesis that cryptocurrency is here to stay.
Interestingly, 2018 is shaping up to be the year of regulations on cryptocurrencies as different countries start to realize the potentially disruptive effect of cryptocurrency on their economies. This piece reviews how different countries are drawing up regulatory processes for cryptocurrencies within their borders.
South Korea is shaping up to be the arch-enemy of the cryptocurrency market in 2018. It has shown incredible ability to move the cryptocurrency markets (up or down) depending on its words and actions. Earlier this year, South Korea revealed its plan to ban cryptocurrencies and the news triggered a massive sell-off in the cryptocurrency market. Bitcoin crashed more than 60% to trade a little under $6000 and the selloff in other altcoins was simply frightening.
Nobody seems to really understand why South Korea is anti-cryptocurrency because its regulatory system is filled with lots of declarations, contradiction, misinformation, and clarifications. What we do know however is that South Korea doesn’t allow people to create anonymous accounts for trading cryptocurrencies. Secondly, South Koreans should know that their government often writes to banks to request information on users suspected to be involved in cryptocurrency.
China used to be the worlds biggest market for cryptocurrencies partly because of its huge population, high level of internet penetration, and suspected cases of money laundering activities by China’s elite. China’s relationship with cryptocurrency has a love-hate dynamic. On the one hand, China is clamping down on ICOs, freezing the account of cryptocurrency exchanges, expanded its firewall to restrict access to materials on cryptocurrency, and it has revoked subsidies to make bitcoin mining expensive and unprofitable.
On the other hand, however, China is giving tacit support to a homegrown Chinese cryptocurrency called NEO. The NEO price trading summary shows the coin trading around $118 barely two years after its launch while other coins in the same age group are still struggling in the low mid-digits. Going forward, China’s regulatory processes will be designed to limit capital outflows and money laundering activities with cryptocurrency. However, cryptos such as NEO that is willing to abide by China’s KYC and reporting requirements will be able to continue their operations with minimal disruptions from the Chinese government.
Venezuela has been a major fixture in the cryptocurrency news for much of the last two years after its economy crashed and Venezuelans started ditching the Bolivar in favor of Bitcoin. The upsurge in the demand for Bitcoin in Venezuela established the country as a major stakeholder in the cryptocurrency space despite its relatively small size in the global economic sphere.
Venezuela has however chosen to embrace cryptocurrency has a potential lifeline that could save its economy from extinction – Venezuela has introduced its own cryptocurrency called “Petro”. Venezuelan President Nicolás Maduro in a launch event noted that “today is the day the petro is born. We are on the world’s financial vanguard. Our response to great problems is great solutions and goodwill.”
The Petro represents a barrel of crude oil from Venezuela’s Orinoco oil belt and financial experts don’t really know what to make of it; yet, it would be worthwhile to know that the coin raised $735 million on its first opening day. Going forward, it is safe to assume that Venezuela is pro-cryptocurrency; unless of course, Maduro might not play nice with a potential “Petro” challenger.