#1 Adoption of New York Model?
S. Korea Considers Introduction of an Approval System to Open Cryptocurrency Exchange
The South Korean government is positively considering an introduction of cryptocurrency exchange approval system. It has changed its stance over regulations on digital currency exchanges from completely shutting down the exchanges to safely managing them. However, it is highly likely to make a final decision on the issue after holding local elections in June.
An official from the government ministry participating in a virtual currency task force said on Feb. 11, “We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely benchmark the model of the State of New York that gives a selective permission.
The New York State allows exchanges to trade virtual currencies only when they have a license dubbed “BitLicense” issued by the New York State Department of Financial Services (NYSDFS). The industry also has a very high entrance level as there are 15 detailed regulations such as a certain amount of capital and quarterly financial reports. This is why only three to four types of authorized digital currencies. When the country accepts the model from New York, it will be able to bring cryptocurrencies into the institutional system as well as supervise the market in an orderly manner, according to the government.
In the beginning of the discussion, the majority of market experts thought the government will adopt the hard line policy including the closedown of exchanges. The market was in an uproar when the Ministry of Justice (MOJ) announced a plan to shut down exchanges last month. The Financial Services Commission (FSC) has also insisted that virtual currencies should be restricted on a similar act of receiving and be permitted for exceptional cases only.
The government’s stance has changed largely due to the fact that the speculation in cryptocurrency trading subsided. The price of digital currencies was over 20 million won (US$18,332) early last month but it fell to 8 million to 9 million won (US$7,333 to 8,249) now. The government thinks that it doesn’t need to regulate the virtual currency market unless it has become excessively overheated. In short, there is no need to use a hard-line policy, including a total ban on trading, as the speculation has subdued.
#2Microsoft To Implement Blockchain-Based ID System
Microsoft revealed its plans to integrate Blockchain-based decentralized IDs (DIDs) into its Microsoft Authenticator app, the company announced in a blog post Monday, Feb. 12.
As reported in the post, Microsoft is looking to provide new a model of digital identity that would not be controlled by any centralized institution and would guarantee fully private data storage, enabling the individual to have full control of “all elements of [their] digital identity.”
After considering a number of standards for decentralized identity systems, Microsoft reports they decided that Blockchain technology and protocols were “well suited” for the task, stating:
“Some public blockchains (Bitcoin [BTC], Ethereum, Litecoin, to name a select few) provide a solid foundation for rooting DIDs, recording DPKI operations, and anchoring attestations.”
Moving forward, Microsoft plans to add DID support to its Microsoft Authenticator app to manage identity data and cryptographic keys. The app, which was launched in August 2016, is used by millions of people, according to the company.
In October, 2017, Cointelegraph reported that a number of governments globally are considering adopting Blockchain-based identity management systems to shift the control of data from the government or corporations to individual citizens.
#3Cryptocurrency market will hit $1 trillion valuation this year, CEO of top exchange says
The entire cryptocurrency market will reach a total value of $1 trillion this year, according to the chief executive of a top digital currency exchange.
Jesse Powell, founder and CEO of Kraken, said Tuesday that the cryptocurrency market would continue to see an "acceleration" of growth — despite a sharp pullback in recent weeks.
He told CNBC: "You've got a lot more kids graduating from crypto programs at universities now. I think we're just going to see it continue exponentially from here."
Asked whether he thought the market capitalization of all cryptocurrencies would hit the $1 trillion mark in 2018, Powell agreed.
The current market cap of all cryptocurrencies stands at around $417 billion, according to data from industry website CoinMarketCap. It hit an all-time high of more than $800 billion in early January, before falling dramatically as a result of a huge cryptocurrency sell-off.
Traders have been weary of regulatory signals recently as government ministers in South Korea and India have both upped their rhetoric against virtual currencies. On Monday, three top European Union regulators issued a warning to consumers about the risks associated with buying cryptocurrencies.
However, cryptocurrency enthusiasts seemed to be mostly positive about a hearing on cryptocurrencies held by the U.S. Senate Banking, Housing and Urban Affairs Committee last week.
#4 Dubai Issues License to Cryptocurrency Firm
he Dubai Multi Commodities Centre (DMCC) is a government entity established in 2002 to enhance commodity trade flows through Dubai. DMCC Free Zone is the largest and fastest growing free economic zone in the UAE.
“We perform a range of roles which continue to position Dubai as the preferred destination for global commodities trade and DMCC as the world’s No.1 Free Zone,” offering zero percent personal and corporate income tax, the center’s website states. Today, more than 14,100 multinational corporations and startups call DMCC home, with almost 90,000 people living and working there.
UAE’s Largest Free Economic Zone Issues License to Cryptocurrency FirmThe Centre has started issuing licenses to allow firms trading in cryptocurrencies to operate from its free zone, Thomson Reuters Zawya reported on Monday.
DMCC’s executive director for commodities, Sanjeev Dutta, told the publication that the Centre is “beginning to facilitate” a market in cryptocurrencies which, he acknowledged, is unregulated. Citing that firms looking to set up in the zone would be considered on a “case-by-case” basis, he elaborated:
To me, what is important is the fact that you are still evaluating it as part of your innovation strategy. You are not saying ‘no’ to something. You are not saying ‘yes’ either, but you are exploring, so you are clearly ahead of the others when the time to make a decision comes.
Cryptocurrencies as Commodities
DMCC is a member of the Global Blockchain Council, which began as a Dubai Smart City project and has 46 member organizations globally today. The Centre’s director of innovation hub, Franco Bosoni, said that a global consensus is emerging which favors classifying cryptocurrencies as commodities, the news outlet detailed and quoted him explaining:
DMCC’s view is that these [cryptocurrencies] meet the test of a commodity. They’re priced based on supply and demand, produced and sold globally at a uniform quality and (are) indistinguishable between products.
Wai Lum Kwok, head of capital markets for Abu Dhabi Global Markets Regulatory Authority, told the publication on Sunday that the regulator is “reviewing and considering the development of a robust, risk-appropriate regulatory framework” for crypto exchanges and intermediaries. Emphasizing that no timeframe has been set, he added:
As we develop our framework, we will also want to check in and have the conversations with, for example, US regulators, Japanese regulators and so on and so forth, so that there is some alignment of approach to avoid any regulatory arbitrage.
First License Issued
UAE’s Largest Free Economic Zone Issues License to Cryptocurrency FirmThe first license for the Free Zone reportedly went to Regal Assets, a gold trader and storage provider with offices in the US, Canada, and the UAE. The company added cryptocurrencies to its product line at the end of last year, offering brokerage services and an insured, high-security cold storage service for bitcoin, ether, bitcoin cash, ethereum classic, ripple, and dash.
According to Bloomberg, “Dubai gold trader Regal RA DMCC is the first company in the Middle East to get a license to trade cryptocurrencies.” The news outlet quoted DMCC acknowledging in a statement, “The company will offer storage of bitcoin, ethereum and other cryptocurrencies in a vault located in DMCC headquarters in Almas Tower in Dubai.”