It has been a rather interesting and busy time in the world of cryptocurrencies with regulations being imposed on cryptocurrencies by different nations around the world. Among the highlights include Hungary’s finance ministry, which has been said to set concrete rules against cryptocurrencies as well as significant developments in both Singapore and China. The full implications of these newly introduced regulations cannot be assessed decisively, although it is expected to affect the crypto world in some way or the other.
The Hungarian Finance Ministry
According to a report from local sources, the Hungarian Finance ministry has refused to recognize cryptocurrencies as a legal tender and are looking to revise existing laws and introduce new regulatory frameworks concerning cryptocurrency activities. According to an official statement from the ministry, “Hungary is currently looking into regulating crypto instruments, and the central bank, the tax authority, the finance ministry and other authorities have set up a joint work group to evaluate legal, economic, law enforcement, money laundering and other aspects of cryptocurrencies with an eye to introducing more detailed regulation.”
These regulations dramatically changes the position of many cryptocurrency traders and enthusiasts in the country, halting permissive cryptocurrency activities in the country.
The Monetary Authority of Singapore
It was recently revealed that the Singapore national exchange has partnered with the Monetary Authority of Singapore with an aim to improve operational efficiency as well as reducing settlement risks. An official statementclaimed that the venture will “allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenized digital currencies and securities assets.”
According to a related press release, the venture will allow companies like Anquan, Deloitte, and Nasdaq to join as technology partners for the project. The main aim of the project is to examine “the potential of automating [Delivery versus Payment (DvP)] settlement processes with Smart Contracts and identify key design considerations to ensure resilient operations and enhanced protection for investors.” Chief Fintech Officer of the MAS, Sopnendu Mohanty commented, “Blockchain technology is radically transforming how financial transactions are performed today, and the ability to transact seamlessly across blockchains will open up a world of new business opportunities. The involvement of three prominent technology partners highlights the commercial interest in making this a reality. We expect to see further growth in this space as FinTechs leverage on the strong pool of talent and expertise in Singapore to develop innovative blockchain applications and benefit from the new opportunities created.”
Chinese Authorities Tighten Regulations
In another unexpected statement by the Chinese Central Bank, in collusion with the Banking Regulatory Commission, the Central Network Information Office, the Ministry of Public Security, and the General Administration of Market Supervision, warned the citizens of China against illegal fundraising ventures involving cryptocurrency technologies. This is, however, not the first time the Chinese authorities have cracked down on cryptocurrencies and ICOs, as a similar incident was recorded last December as well. Investor sentiment was at an all-time low, which resulted in a massive devaluation of Bitcoin and by extension the whole cryptocurrency market. This latest statement, however, urges citizens to be skeptical and rational before taking such investment decisions. The move is thought to counter the threat posed by various Ponzi schemes disguised as ICOs which lure investors through airdrops and/or celebrity endorsements.
As the global market becomes more and more aware of the potential of cryptocurrencies and blockchain technology, it’s no surprise that national governments in various emerging markets have understood the need for regulations. The anonymity of cryptocurrencies, in general, has been described as a “double-edged sword” with the potential to either create new innovative opportunities in the market or wreak havoc with millions of dollars compromised.