As 2019 comes to a close, we cannot help but wonder what 2020 has in store for blockchain and crypto. From crypto taxation to mainstream authorities starting to consider blockchain adoption, we have seen the year and the week culminate with some interesting insights and foresights as we say goodbye to 2019 and usher in 2020.
2019 was truly the year that crypto regulation changed. China clearly came out and announced its blockchain acceleration efforts while France announced crypto-to-crypto trades are not taxable. Germany approved banks to work with cryptocurrencies while the USA now regulates digital assets like fiat money. All these developments point to a bright future for crypto in 2020.
This week saw the United Nations Secretary General, Antonio Guterres, come out and say that blockchain should be among the technologies used by the UN. So far, the UN has already launched a blockchain tool aiming to prevent exploitation of migrant workers in Hong Kong with a blockchain financial services firm. More blockchain uses by the UN are in the works.
This week has also seen Bitfinex, one of the largest crypto exchanges globally, requesting for more identifying information from its clients in what is seen as an effort to further strengthen its KYC requirements. Users are now required to share information on such matters as the source of funds and proof of residential address, such as a utility bill. Bitfinex is currently in an ongoing investigation by the New York Attorney General and it may simply be trying to halt investigations into the case by showing it has good KYC on its clients.
China has once again put out an announcement this week pointing out the risks of the resurgence of digital currencies. The China Securities and Regulatory Commission (CSRC) has called on the local authorities to combat crypto-related illegal activities in Beijing. While China has said it does not support cryptocurrencies like Bitcoin, it has stated that support for blockchain should not be read as support for crypto. It said that innovation in blockchain technology does not mean we should speculate in virtual currencies.
South Korea’s Central Bank has this week announced that it is hiring experts to study the effects of distributed ledgers, cryptocurrencies, and CBDCs on financial settlements and security while also keeping an eye on other countries’ experiments with CBDCs. Bank of Korea is expected to enact assessment principles, reflecting domestic conditions, to improve the effectiveness of its oversight of the payment and settlement systems. The taskforce is expected to be formed as early as January 2020.
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