Regulators around the world are gradually accepting the idea that when contemporary currencies have a clear functional role in blockchain networks, it is best to use existing consumer protection and anti-money laundering methods to manage them, rather than Use cumbersome securities to supervise.
Although the government is concerned that investors will be deceived by the scammer ICO in the cryptocurrency market, regulators have begun to gradually and seriously try to define these concepts, opening the door to more meaningful integration of blockchain technology into the global economy.
In this regard, the Singapore Central Bank is leading the trend. In a March speech, MAS Managing Director Ravi Menon presented a clear reason to distinguish “good” tokens from “bad”.
The Swiss Financial Market Regulatory Authority (FINMA) has also actively proposed a useful taxonomy that divides tokens into three categories: payment (bitcoin, Litecoin, etc.), utility (Ethereum, etc.) and assets, only The third is governed by the Securities Act.
Jurisdictions in other developed countries are also quietly entering. Both Malta and the UK’s direct Gibraltar have shown an open regulatory oversight of ICO and token exchange. At the same time, Caribbean countries such as Bermuda are developing a regulatory framework for tokens to promote blockchain innovation while maintaining its position as a reliable home for foreign financial institutions.
The US government is also taking action in the state. The Wyoming legislature passed legislation to define utility tokens as new asset classes and exempt them from securities regulation.
The US Securities and Exchange Commission has also softened its position. In a landmark speech last month, William Hinman, head of corporate finance at the US Securities and Exchange Commission, answered a question that has been plaguing the Ethereum community. Hinman said: Ethereum is a “encrypted fuel” that is used to pay for the decentralized calculation of smart contracts on the Ethereum platform.
A very important point: regulators are doing their homework and are beginning to realize that what they are used to see is beginning to change and there is a lot to learn.
The game started
It is clear that many countries have focused their attention on the potential economic benefits of the ICO market, and the cryptocurrency market with a market capitalization of $275 billion (with a bias in measurement) has formed an important parallel capital market. There are tax harvests and opportunities to attract innovation.
There are already six or so government regulators around the world that have reached broad agreements on utility tokens and their differences with payment and security tools. For example, define the level of functionality of the platform, etc. In addition to securities law exemptions, regulators want to use existing consumer protection laws to ensure that ICO issuers are accountable for their commitments.
If we want the whole world, including the enterprising spirit of these countries, to obtain the strong economic advantages of decentralized, peer-to-peer applications and business models, we must alleviate the regulatory barriers to entry into the cryptocurrency market.