Legislative Сhanges in September 2019: Switzerland is Loyal, Others are Not

In September, European regulators drafted regular laws regarding cryptocurrencies. Bitnewstoday got acquainted with what the innovations are and which countries have adopted the amendments.

Switzerland

FINMA, the banking sector regulator, reported on the licensing process for the Libra Association, which is based in Geneva. At least a payment system license is required for the cryptocurrency to proceed. Additional regulation is also necessary, since the functionality of the project is not limited to payment services and, therefore, carries increased risks. But stablecoins are placed in the standard framework, for which additional regulation is not necessary.

As noted in FINMA, stablecoins differ only in their basic assets: currency, real estate, securities; the selection of specific details of regulations will differ depending on this.

Despite the reputation of a cryptocurrency friendly country, there are many opponents in the Swiss jurisdiction. So, in September, the president of the National Bank of Switzerland said that stablecoins tied to fiat currencies threaten the country's monetary policy.

Germany

In neighboring Germany, the government has approved a blockchain regulation strategy. It was planned to be released in the summer, but the deadlines moved to September. The strategy provides for the prohibition of any private money in the country.

Finance Minister Olaf SCHOLZ issued a statement stating that the ban on private money would strengthen Germany's place as a technology center. Private cryptocurrencies contradict the state monopoly on the issue of currency and, if legalized, undermine state sovereignty. At the same time, Germany is not against the blockchain as a whole, in the future it is planned to issue electronic bonds based on this technology.

France

French Finance Minister Bruno Le MAIRE proposed creating a state cryptocurrency within the European Union. In his opinion, this will accelerate internal and external transactions and at the same time reduce their cost. Despite this, it is planned to ban French citizens to use private cryptocurrencies, including Libra. The Ministry of Finance also spoke about the planned taxation of cryptocurrencies: income tax will be charged at the time of converting tokens to fiat, transactions between cryptocurrencies will be exempt from taxes.

The basis for calculating VAT will be operations to purchase goods and services for cryptocurrencies and tokens. Among other things, France is trying to put pressure on Switzerland, in which the Libra Association is registered, to refuse licensing and further circulation of Facebook’s cryptocurrency.

Netherlands

On September 3, the Central Bank of the Netherlands posted a statement on its website, regarding the start of regulation of crypto companies since the beginning of 2020. The regulation will affect companies that convert cryptocurrencies to fiat, as well as cryptocurrency providers. All crypto firms have to register with the Central Bank. Representatives of the regulator have the right to check shareholders and members of the board of directors for compliance with requirements. The activities of all unregistered companies will become illegal in the state.

Ukraine

The Ministry of Digital Transformation of Ukraine proposed to legalize cryptocurrencies. Since there is no legal basis now, cryptocurrencies are in the “gray zone”: they are not prohibited, nor allowed. The state plans to start collecting taxes from operations, so legalization is necessary. In addition, it is planned to transfer part of state registries to the blockchain.

Turkey

Turkey, like Ukraine, plans to transfer state registries to the blockchain. This is stated in the development strategy for 2023. The state plans to create an open platform on the blockchain, in which, in addition to registers, there will be diplomas of graduation, customs and other documents. It is also planned to test blockchain systems in the regulatory sandbox mode.

There are many other countries that are still deciding how to regulate cryptocurrencies. Now, against the backdrop of the fall of Bitcoin, Libra is seeing danger: some fear its negative impact on monetary policy and macroeconomic indicators, others cautiously speak out for its approval. Nevertheless, the perspectives for Libra seem quite grim already.