What are various governments around the world doing to regulate blockchain, cryptocurrencies and distributed ledger technologies? Here are some recent highlights:
Norway eliminates energy tax break for crypto miners
With the start of the New Year, cryptocurrency miners in Norway will be required to pay the normal tax rate on the electricity they consume, according to a report in the Aftenposten. The change follows a decision in December by the parliamentary Finance Committee, which eliminated a data centre energy subsidy that had been available to cryptocurrency miners. Parliament member Lars Haltbrekken told the Aftenposten that Norway should no longer provide tax relief for cryptocurrency mining, a carbon-intensive endeavour that consumes massive amounts of energy around the world. In response, the blockchain company Hive released a statement at the end of December criticising Norwegian leaders for making the decision “without discussion, consultation, or dialog with the industry”. The trade organisation ICT Norway has warned the change will drive cryptocurrency miners to other countries such as Sweden and Denmark.
Swiss report outlines ‘innovation-friendly’ legal framework for DLT
Swiss leaders approved a report in December outlining a new legal framework for blockchain and distributed ledger technology (DLT) in the financial sector. The report noted that it aimed to “send a signal and show (i) that Switzerland is open to technological developments such as DLT and blockchain, (ii) that the Swiss legal framework is already suitable for dealing with business models based on DLT and blockchain, (iii) that Switzerland wants to further improve the innovation-friendly framework conditions and (iv) that the Swiss authorities are determined to rigorously combat abuses”. Luzius Meisser of the Bitcoin Association Switzerland commented after the report’s release: “This shows once again how the traditional Swiss approach of having principle-based laws that give a lot of discretion to citizens and regulatory agencies are much more innovation-friendly than overly detailed European-style laws.”
Crypto regulations should provide investor ‘certainty’, Spain’s ruling party says
In comments made during opening of Madrid’s ISDE Blockchain and Law research centre on 10 December, Teodoro García Egea, secretary of Partido Popular, Spain’s ruling party, said his party will propose new regulations aimed at providing greater certainty for blockchain and cryptocurrency investors. He also pointed to the advantages of cryptocurrencies over fiat money, such as auditability and security. Spain, he said, should be a blockchain leader rather than following the regulations adopted by other countries. Among the other actions Spain might consider, he added, are tax breaks for crypto startups and DLT companies, and promotion of blockchain education.
Belarus sets new rules to encourage crypto industry growth
The Belarus High Technologies Park (HTP) recently established several new token-related regulations that apply to companies operating within the special economic zone. They include requirements for ICO organisers, cryptoplatform operators and cryptocurrency exchange office operators, and also stipulate measures to prevent money laundering and financing of terrorism or weapons of mass destruction. According to a report in Finextra, the new rules are “intended to further encourage the growth of crypto-related ventures in Belarus” by ensuring tax exemptions, strict protections for customers and data, and heightened business standards. “The Belarus approach is different compared to other countries,” Martin Hess, a partner with the law firm Wenger & Vieli, told Finextra. “It remains to be seen how the standalone Belarus regulations will be interpreted and applied.” Launched in 2005, the HTP is home to more than 200 companies providing a variety of digital and information services.
ICO regulations not ready yet, Philippines SEC says
The Philippines’ Securities and Exchange Commission is “still not ready” to issue new regulations on initial coin offerings because stakeholders have asked for more time to review the proposed measures, according to a report at the end of December in The Philippine Star. The SEC’s latest draft rules specify that the commission will review an ICO’s documentation to determine whether the token qualifies as a security. They also outline requirements for ICO whitepapers, prospectuses, allowed and prohibited advertising, reporting and more. According to the Star report: “Asked why the Philippine SEC has decided to regulate ICOs instead of imposing a total ban as what China did, SEC chairperson Emil Aquino said [the] technology has its benefits.”