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Friday, 24 November 2017

Bitcoin: South Korea, Zimbabwe and Singapore's Stance

  Bitcoin; a cryptocurrency has received different reactions in different countries, with some like Russia; trying to regulate it and others like Japan welcoming it.
Let's see some more reactions.

South Korea

South Korea does not plan on regulating the digital currency because according to the Governor of South Korea's Financial Supervisory Service(FSS),  it does not  consider Bitcoin and other digital currency to comprise of legitimate currency.

The governor likened the FSS's stance to their stance on Casinos in the country.“It is
the same with the fact that we don’t regulate or
supervise casinos. Though there could be concerns
on excessive gambling, that does not provide
grounds for the FSS to control casino practices.”

He however,  indicated that the FSS's stance would change if cryptocurrencies were eventually viewed as legal currencies
“Though we are monitoring the practice of
cryptocurrency trading, we don’t have plans right
now to directly supervise exchanges. Supervision will
come only after the legal recognition of digital
tokens as a legitimate currency.”

Zimbabwe

“When the new Bill is enacted, payment firms will
only need to hold one license under a single
regulatory framework to conduct any or all of the
specified payment activities. Only payment
activities that face customers or merchants,
process funds or acquire transactions, and pose
relevant regulatory concerns will need to be
licensed. The new framework will expand the scope
of regulation to include domestic money transfers…
merchant acquisition… and the purchase and sale
of virtual currencies… To help ensure that the
expanded scope of regulation is not onerous, the
Bill will differentiate regulatory requirements
according to the risks that specific payment
activities pose rather than apply a uniform set of
regulations on all payment service providers… The
Bill will empower MAS to regulate payment services
for money-laundering and terrorism financing
risks.”
Mr. Ravi Menon, the managing director of the
MAS, stated: “We want to put in place a forward-
looking regulatory regime to encourage wider
adoption of secure e-payment solutions.”
Meanwhile, Norman Mataruka; the Reserve Bank's director stated that bitcoin is not legal.
“In terms of the bitcoin, as far as we are
concerned, it is not actually legal. In Southern
Africa, what we have done as regulators, we have
said that we will not allow this in our markets…
Research is currently being undertaken to
ascertain the challenges and risks associated with
these particular products and until we have
actually established and come up with a legal and
regulatory framework for them, it will not be
allowed.”

This statement,  was made shortly after the resignation of Robert Mugabe following a coup to oust the former 37 years leader of Zimbabwe.

In recent months, increasing coverage had been given to the inflation of the cryptocurrency in the country with high demand for the digital currency being driven by the ailing health of the economy.

It is not clear whether what Norman meant as illegal was the possession or the transaction of bitcoin. And we are in doubt of whether the RBZ has the resources to control the cryptocurrency given Zimbabwe's recent political turmoil.

Singapore 

Singapore however,  is gearing up for the digital currency's regulation.
The Monetary Authority of Singapore (MAS) has launched a 2nd public consultation as regards a newly proposed regulatory framework. 'The Payment Services Bill'. The bill seeks to “streamline the regulation of payment services
under a single legislation,” and “expand the scope
of regulated payment activities to include virtual
currency services and other innovations, and
calibrate regulation according to the risks posed by
these activities.”
The Monetary Authority if Singapore states
“When the new Bill is enacted, payment firms will
only need to hold one license under a single
regulatory framework to conduct any or all of the
specified payment activities. Only payment
activities that face customers or merchants,
process funds or acquire transactions, and pose
relevant regulatory concerns will need to be
licensed. The new framework will expand the scope
of regulation to include domestic money transfers…
merchant acquisition… and the purchase and sale
of virtual currencies… To help ensure that the
expanded scope of regulation is not onerous, the
Bill will differentiate regulatory requirements
according to the risks that specific payment
activities pose rather than apply a uniform set of
regulations on all payment service providers… The
Bill will empower MAS to regulate payment services
for money-laundering and terrorism financing
risks.”
Mr. Ravi Menon, the managing director of the
MAS, stated: “We want to put in place a forward-
looking regulatory regime to encourage wider
adoption of secure e-payment solutions.” The consultation takes place from 21 November 2017 to 8 January 2018.

What do you think about South Korea's laissez faire attitude with contrasting Zimbabwe's and Singapore's regulatory attitude to the cryptocurrency? 

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