The Indian government is all over the latest cryptocurrency news for its apparent plans to introduce a controversial Bitcoin ban bill in December this year or January 2020 during a parliamentary session. The news were first shared from the local crypto news provider Crypto Kanoon.
Even though nothing is official yet, the decision apparently surfaced during an ongoing court hearing between the Reserve Bank of India (RBI) on one side and regional cryptocurrency exchanges on another. According to officials representing the Narendra Modi financial ministry, a draft bill was submitted before the Supreme Court judge. With this, the Indian government is probably going to project the basis of the future of cryptocurrencies in the country.
The news source (and many best cryptocurrency news sites after that) claimed that the draft is the same which was prepared by the intergovernmental committee that was led by a former Economic Affairs Secretary named Subhash Chandra Garg. The document also recommended an outright ban on Bitcoin and all types of “private cryptocurrencies” as well as a ten-year jail time for the ones who do not abide by it.
Meanwhile, the Indian government wants the Supreme Court to adjourn the hearing until January next year. They confirmed that the Bitcoin ban bill is planned in the lower house of the Indian parliament during the winter session.
In the petitions praying for Ban or regulation:
Govt. submitted draft regulation before the Court which was submitted to it by Garg Committee.
Govt. requested the Court to adjourn the matter till January as the it intends to introduce the bill in parliament in winter session.— Crypto Kanoon (@cryptokanoon) August 8, 2019
As a reminder, last year in July RBI had banned banks from doing business with companies associated with Bitcoin (BTC) and other cryptocurrencies. Then, the Internet and Mobile Association of India (IMAI) took the Indian central bank to the Supreme Court and accused the federal body of being biased towards the emerging crypto sector in India – saying that their circular was unconstitutional.
The case went through a lot of delays in the past 12 months. It was heard by the Indian government and the regulatory officials on August 8 this year, when the IMAI counsel argued that Bitcoin is not a sovereign currency but a commodity – which is why the decision should come from the Securities and Exchange Board of India (SEBI), and not from the RBI.
Counsel argues that Cryptos must not be equated to Sovereign Currency i.e., rupee etc.
One is commodity, other is currency.
In support, judgement of Brazilian Supreme Court is being read.— Crypto Kanoon (@cryptokanoon) August 8, 2019
All of this shows that Bitcoin is still unknown as a subject and there is lack of regulation around it. Let’s just hope that India will reconsider the Bitcoin ban.
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“All these changes will make anonymity more difficult for the average consumer, as more exchanges comply and implement KYC. Those exchanges who don't will be forced to jump from jurisdiction to jurisdiction, which will impose extra costs that only those committed to anonymity will be willing to pay. For criminals, this will change nothing because they are in that group, among many others who are not criminals, who are willing to pay more.”Regulation can affect crypto in many different ways and regulators are already preparing new laws now. It is certain that if this happens, an intense debate will also occur among investors, industry leaders and regulatory bodies.
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“Governance is the core pillar of any form of digital currency. It is critical that any framework on digital currencies ensures security, efficiency, and legitimacy of payments while ensuring fair and open competition. We welcome the WEF’s platform to help develop a robust governance framework for inclusion through digital currencies.”As per the recent reports, the efforts of creating a regulatory framework on cryptocurrencies are getting more serious. As of this month, the European Union introduced an updated version of the 5th anti-money laundering directive and had increased regulatory focus. All of the crypto-related businesses are operating from Europe and they have to follow the rules which include a more in-depth know your customer process, filling suspicious activity reports and conduct transaction monitoring with law enforcement. After the WEF2020, the world watchdogs will try to establish a framework of regulations for crypto so it will be extremely interesting to see whether this will be beneficial for the market.
Germany Increases Costs For (Some) Crypto Firms By $250k
"They have to now set up a new legal entity since January 1 has passed," explains Philipp Sandner, who is a professor at the Frankfurt School Blockchain Center. "But this new legal entity would be illegal for custody, trading and issuing."The new laws show that Germany increases costs and that all companies founded after January 1 will need a BaFin license to offer these services. Meanwhile, the companies founded before January 1, 2020 will benefit from 'grandfathering' until November 2020.The cost of acquiring a BaFin license could be prohibitive for new startups, both Sandner and one lawyer explained.
"For companies (be it startups or larger companies such as banks), the license induces costs of approx. USD 250,000," they say. "Not every startup will be able to bear these costs. The small startups might be driven out of the market; the larger ones and the incumbents will probably apply for the license."As Germany increases costs for crypto firms, many wonder why is this the case. The truth is, the government is sought to introduce a law which might end up driving startups "out of the market" as experts noted.Both experts noted that the government had the opposite intention in mind and wants to encourage mainstream adoption of cryptocurrency and blockchain technology, rather than leaving these sectors open for unregulated firms. However, the costs at this point are big for many crypto firms which is why the crypto climate in Germany is not that good.Meanwhile, the latest Bitcoin price news show that the cryptocurrency has fallen by 6% due to the situation in China.
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- Whether or not an investment contract is being offered in a securities transaction
- Whether an investment contract is a commodity which can be sold in a traditional commercial transaction
“If a developer team retains certain assets and sells it to investors, it falls into the definition of security. I think that the U.S. legislation must be shaped to take into regard emerging technologies and new business models that hadn’t been present not only in the days of SEC creation but also during the judicial battles on security definitions.”The crypto industry has been witnessing an enormous amount of interest around stablecoins, a digital offering which presents users with all of the various advantages of cryptocurrencies all while having their values pegged to a stable fiat asset such as the US dollar, the Euro and others.
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