British lawmakers have voted to postpone a crucial Brexit vote and forced Prime Minister Boris Johnson to ask the EU for an extension. News.Bitcoin.com talked to the CEO of a local crypto exchange to find out the effects a no-deal Brexit could have on the crypto industry.
On Saturday, the British parliament voted to put off a decision on Prime Minister Boris Johnson’s deal, forcing him to ask the EU for another Brexit delay. William Thomas, CEO of peer-to-peer exchange Cryptomate, explained to news.Bitcoin.com that many people are calling this deal “‘Brexit in name only’ as it still ties us in with many EU institutions, including future regulatory alignment,” adding that a no-deal Brexit is becoming even more of a possibility.
In the event of no-deal being reached by Oct. 31, Thomas said, “there will be substantial uncertainty within British and EU financial institutions.” However, in terms of whether it will create demand for bitcoin and cryptocurrency in general, “I am not so certain,” he admitted, elaborating:
I would expect to see some upward movement on BTC/GBP markets shortly after the deadline, but since the British pound is a small portion of global crypto volume it may not have a large overall effect on price as some have predicted.
“It will, however, have a positive impact within the British market, but the degree of which this will affect the global cryptocurrency markets is speculative at this time,” he opined.
Cryptomate allows British users to purchase a wide range of cryptocurrencies via instant bank transfer. The platform claims to have served 11,250 customers, filled 44,853 orders worth approximately 14.43 million British pounds (~$18.74 million).
How the UK Crypto Industry Could Be Affected
Thomas further explained to news.Bitcoin.com how the U.K. cryptocurrency industry will likely be affected in the event of a no-deal Brexit. “For larger traditional financial service industries that operate out of London, there are safeguards that will see financial services ‘passporting’ to the EU market will continue until future agreements are made,” he remarked.
However, there is nothing in place and very little guidance from the British Financial Conduct Authority (FCA) about how this should affect the crypto industry and related services. “There is a huge lack of clarity in the area,” he emphasized. Nonetheless, he shared:
It’s my personal belief that a no-deal Brexit would be a huge positive for the U.K. cryptocurrency industry in the long term, as it enables us to create our own regulatory systems without interference from the EU – who are much less friendly to the industry as a whole compared to the U.K.
For European Union customers who use British-based exchange/wallet services and vise-versa, Thomas said that a no-deal Brexit “will have very little impact” on them. “British and EU customers will still be able to use SEPA bank payments which account for most exchange deposits within Europe, so trading volume should remain unchanged,” the CEO continued, noting:
Britain will continue regulatory alignment with the EU the day after we leave (until December 2020) so there’s no reason to think there will be any major disruption to banking or money services on November 1st.
As for Cryptomate, Thomas confirmed: “We will continue to accept European Union customers who have access to UK banking and this policy will not change unless we’re told differently by the FCA.” He added that most sellers on his platform have indicated that they “will be keeping their trading funds in USDT, as opposed to GBP or EUR,” noting:
We would expect to see demand for bitcoin and others increase during November, as a no-deal is likely to see the pound weaken further against the euro (and the euro vs the dollar) as people look for safe havens outside of fiat.
How do you think Brexit will affect the crypto industry? Let us know in the comments section below.
Images courtesy of Shutterstock and the Financial Times.
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Europe is gradually tightening the rules for the crypto space. A wave of new regulations are introducing stricter requirements for companies operating in the industry and cryptocurrency users are going to feel the difference in the coming months. The measures stem from the obligation of member states to transpose EU’s Fifth Anti-Money Laundering Directive (AMLD5) into national law by January. Unfortunately, they often go beyond what Brussels wants them to do.
German Regulations Chase Out Crypto Companies Like Bitpay
Germany, the flagship of the European Union, is one of the first to make the changes. New anti-money laundering (AML) regulations entering into force next year will oblige digital asset exchanges as well as providers of crypto payment and custodian services to apply for licenses from the Federal Financial Supervisory Authority (Bafin). They have to do so by the end of 2019, as the new pan-European legislation is supposed to be implemented in January 2020.
Starting from next year, German financial authorities will consider digital coins a financial instrument. And while some welcome the regulatory clarity regarding the status of cryptocurrencies, others think many more aspects need clarification and even look at the new rules as an obstacle to normal business. Members of the local crypto community believe the government is actually hurting the German blockchain industry and sending crypto companies abroad.
A major industry player that evidently needs some time to think about the matter is Bitpay. The payment processor, which facilitates both crypto and fiat transactions, is not providing services to German customers anymore. About a week ago, the platform announced on its website that it doesn’t currently work with merchants or users based in the Federal Republic among countries such as Algeria, Bangladesh, Bolivia, Cambodia, Ecuador, Egypt, Indonesia, Iraq, Kyrgyzstan, Morocco, Nepal, and Vietnam.
The list of supported markets is regularly updated according to Bitpay’s evaluation and understanding of local laws. And the company says it engages with local authorities to fully understand the rules in order to retain compliance and offer businesses the opportunity to accept blockchain payments. But the fact that it has pulled out of Germany at this point, even if it’s only a temporary step, means that new German regulations are already making it harder for crypto companies to operate freely.
Some serious businesses, like the largest food delivery portal in Germany, Lieferando, have been offering bitcoin as a payment option to their customers through cooperation with Bitpay. Members of the country’s crypto community have been warning that the new rules are going to chase other companies out of Germany in search for a more favorable climate in different jurisdictions in Europe or elsewhere.
Prague Tightens Noose on Nascent Crypto Industry
The Bundesrepublik is not the only EU member state taking the road to much stricter standards for the crypto industry. According to reports by local media, the Czech Republic is now working on its own set of rules, further tightening the noose around cryptocurrency users. For example, failure to register with the national Trade Licensing Office will lead to massive fines for service providers in the space.
Again, these measures have been inspired by the latest European AML directive, but the country’s leading business daily wrote last week that they are going to be tougher than the requirements set forth by the EU. In an article on the subject, Hospodářské noviny recently pointed out that the new cryptocurrency regulations will increase oversight on a wider range of companies than mandated by Brussels, jeopardizing the competitiveness of the Czech crypto sector.
Estonia is another EU member that has been tuning its crypto regulations in recent months. The tiny Baltic nation was one of the first on the continent to create favorable conditions for businesses dealing with digital assets and attracted many of them to its jurisdiction. Towards the end of last year, however, regulators in Tallinn took steps to tighten the existing licensing regime. As a result, it’s going to take longer and it will be harder in the future to acquire an Estonian license.
This spring, the finance ministry presented amendments to the country’s anti-money laundering and counterterrorist financing legislation. One of the changes requires Estonian companies to keep their headquarters in the country and entities incorporated abroad now have to maintain a permanent office in the republic. Estonia adopted its Money Laundering and Terrorist Financing Prevention Act in 2017 to transpose the provisions of the Fourth Anti-Money Laundering Directive.
France Introduces Optional Licensing
Other European nations have also taken crypto regulation seriously. Earlier this year, France announced intentions to publish updated rules for the crypto industry. In April, the government in Paris adopted a bill creating the legal framework for service providers in the space and projects conducting initial coin offerings. The law introduces mandatory registration with the French Financial Markets Authority (AMF) for providers of crypto custodian services as well as optional licensing for all service providers including cryptocurrency brokers, dealers and exchange operators.
About the same time, Finland enacted its law regulating crypto service providers like trading platforms, wallet providers and issuers of digital coins. The Act on Virtual Currency Providers entered into force on May 1 after it was approved by the country’s president. The Financial Supervisory Authority (FSA) was tasked with registering and supervising entities that fall into these categories. The new legislation and the introduction of other regulations by the FSA led to changes in the customer verification procedures applied by the peer-to-peer crypto exchange Localbitcoins.
Holland Abolishes Licensing Requirement
Obliging crypto companies to apply for licenses issued by regulators is a step too far and the case with the Dutch AMLD5 legislation demonstrates that. In early July, the Netherlands’ finance minister filed a bill in parliament implementing the directive and amending his country’s Money Laundering and Terrorist Financing Prevention Act. The draft envisaged the introduction of a licensing regime for crypto exchanges and wallet providers.
However, the unnecessary provision regarding licensing was met with a negative reaction from the Dutch Council of State, a body that advises Holland’s parliament on draft legislation prepared by the executive power and provides assessment of bills in terms of compliance with EU law. According to the council, AMLD5 does not offer a choice between licensing and registration, hence the minister’s proposal is not in line with the directive.
In its considerations, the legal portal Lexology reported, the Council of State also notes that the advice of the Dutch Central Bank (DNB) and the Financial Markets Authority (AFM) to introduce a licensing system in order to improve the effectiveness of oversight does not mean such a measure is proportionate, given the burden it imposes on service providers. As a result, the licensing requirement was abolished in the latest version of the law submitted to the Dutch parliament. There’s only a registration requirement, which is in line with EU’s directive and the Council of State’s suggestion.
AMLD5 Must Be Transposed Into National Law by January
The Fifth Anti-Money Laundering Directive was adopted by the Council of the European Union in May 2018 and published in the official journal of the EU on June 19 last year. AMLD5 modifies AMLD4, which was released in 2015. The revision was proposed in the summer of 2016 as part of the European Commission’s Action Plan against terrorism prepared after the terrorist attacks in Paris and Brussels and the Panama Papers scandal.
AMLD5 entered into force on July 9, 2018 and EU member states are obliged to transpose it into their legislation by Jan. 20, 2020. One of its key goals is to extend the scope of anti-money laundering laws to cover crypto exchange platforms and wallet providers. It also contains provisions regarding know your customer (KYC) rules and procedures. The implementation of the new directive is mandatory for EU countries.
In many cases, national laws transposing AMLD5 introduce regulations that are tougher than the directive requires, limiting services that have so far been readily available to the crypto community in Europe. Platforms such as Local.Bitcoin.com offer cryptocurrency users a marketplace where they are free to trade bitcoin cash (BCH) on a peer-to-peer basis and in a secure manner, without the need for KYC.
Why do you think regulators and authorities in EU member states adopt stricter measures than required by the Fifth Anti-Money Laundering Directive? Share your thoughts on the subject in the comments section below.
Images courtesy of Shutterstock.
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In the premiere episode of the new Cointelegraph series “Coffee and Crypto,” Olivia Capozzalo and Molly Jane Zuckerman discussed the latest news in the crypto industry.
In the premiere episode of the new Cointelegraph series “Coffee and Crypto,” head of editorial Olivia Capozzalo and head of news Molly Jane Zuckerman discussed the latest news in the cryptocurrency industry.
Latest news in the cryptocurrency industry
In the video, Capozzalo and Zuckerman discuss United States President Donald Trump criticizing Bitcoin (BTC) and Facebook’s Libra stablecoin, the European Central Bank’s recent statements about Bitcoin, and whether BTC is a currency. Zuckerman also talked about the hack of Japanese exchange Bitpoint, which yesterday published the breakdown of crypto assets stolen in the 3 billion yen (~$27.8 million) hack of its platform earlier this month.
Capozzalo spoke about an American computer scientist that has managed to mine Bitcoin on a 52-year-old Apollo guidance computer. Those are the very same computers that were used to navigate the first moon landings by the National Aeronautics and Space Administration in the 1960s.
Cointelegraph’s head of editorial shared a story about how she first learned about cryptocurrencies in 2013, but wasn’t a fan initially.
“I felt like Trump,” Capozzalo said, in reference to the president’s recent tweets about crypto.
As Cointelegraph reported earlier this month, Donald Trump voiced his opposition to cryptocurrencies as a whole, citing Bitcoin and Libra specifically. He stated that he is “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
U.K. Finance Minister Philip Hammond said that regulators, not lawmakers, should make decisions regarding Facebook’s Libra stablecoin.
The United Kingdom Finance Minister Philip Hammond said that regulators and not lawmakers should decide on how to regulate Facebook’s stablecoin Libra, CNBC reported on July 15.
In an interview with CNBC’s “Squawk Box,” Hammond said that lawmakers should not decide to require the social media giant Facebook to acquire a bank license as it is “an issue for regulators to determine, not for politicians to determine.” Hammond said that Libra could be “a very positive thing” once it is properly regulated, and added:
“We’re not going to turn our back to it or try to stop it. We’re going to engage with it and try to work with others to ensure that it is effectively regulated.”
Hammond further stressed that without proper scrutiny, Libra has potential to pose great risk to the financial system as it could become a tool for money laundering and financing terrorism. Hammond also pointed out that he sees a difference between Libra and Bitcoin (BTC) because they have contrasting ownership structures.
Earlier in July, Bank of England governor Mark Carney said that people need to acknowledge the issues Facebook is attempting to solve with Libra, regardless of the project’s potential downsides.
Carney also stated that Libra, due to the massive scale of the project, has to be virtually perfect at the outset — at least from a financial security standpoint — in order for it to be released at all.
Hammonds delivered his comment ahead of a hearing on the Libra cryptocurrency project with the Banking Committee of the United States Senate, which will be held tomorrow, July 16. Following the release of the project’s whitepaper, U.S. regulators expressed their concern about the project’s possible effects on financial stability.
Cryptocurrency services firm Prasos has received a payment institution license from a Finnish regulator, allowing it to offer payment services in EEA countries.
Finland-based cryptocurrency firm Prasos has secured a payment institution license via the Finnish Financial Supervisory Authority (FFSA). The news comes by way of an official announcement via its crypto exchange website on July 12.
According to the announcement, Prasos is now the third crypto firm in Europe to secure a payment institution license. According to its website, Prasos operates a crypto exchange, a crypto investment platform, and Bitcoin (BTC) ATMs.
Prasos stated that, thanks to its new license, its crypto investment platform Coinmotion is now capable of supporting a payment service in the European Economic Area (EEA), which includes EU member states as well as Iceland, Liechtenstein and Norway.
The license will also reportedly allow Coinmotion to cooperate more smoothly with banks and traditional financial institutions, and extend its capabilities pertaining to traditional fiat money.
Prasos Oy’s managing director Heidi Hurskainen said it took around one-and-a-half years to complete the application process; Hurskainen also noted that over this period, crypto legislation within the EU has become more clear.
Looking forward, Prasos is planning to apply — again with the FFSA — for a virtual currency provider license in May, as will apparently be required when new legislation comes into effect that month.
As recently reported by Cointelegraph, two companies in the United States have received notable licensure through the Securities and Exchange Commission (SEC). Blockchain startup Blockstack announced on July 10 that it was running the first SEC-approved public token offering under Regulation A+, while the blockchain org Props announced on July 11 that it had received the first SEC-approved consumer-facing token offering, under Reg A+ as well.
Spanish law enforcement pointed out that Bitcoin ATMs show a gap in European Union’s anti-money laundering regulation.
Spanish law enforcement pointed out that Bitcoin (BTC) automated teller machines (ATMs) show a gap in European Union’s Anti-Money Laundering (AML) regulations, Bloomberg reports on July 11.
Per the report, Spanish police uncovered a local gang that used Bitcoin ATMs to transfer more than 9 million euros ($10 million) for drug traffickers in Colombia and other countries.
Bloomberg cites anonymous representatives of Guardia Civil (a type of Spanish law enforcement) alleging that the group hired two machines from trading platforms and installed them in an office in Madrid.
The office in question masqueraded as a center for remittances and cryptocurrency trading. The group reportedly used the center to transfer money from bank accounts to trading platforms to top up the ATMs with digital assets. Cryptocurrencies obtained this way would allegedly then end up being sent to the aforementioned drug traffickers.
Police also reportedly seized the two Bitcoin ATMs, four cold wallets, and 20 online wallets. Bloomberg further notes that prosecutors are now trying to prove a correlation between the ATMs and the confiscated digital assets.
As Cointelegraph reported at the beginning of June, the city of Vancouver, Canada, is considering banning bitcoin ATMs due to money laundering concerns.
On the other hand, earlier this month Canadian exchange Coinsquare announced that it has acquired software allowing traditional ATMs to sell cryptocurrencies.
Philip Green triggered the wrath of crypto proponents online as the ECB says it has no plans to add bitcoin to its reserves.
The European Central Bank (ECB) doubled down on its dismissive stance on bitcoin (BTC) July 9, refusing to recognize it as currency in a Q&A session.
Responding to a private query as part of its regular interactive Twitter program, which it administers under the hashtag ‘#AskECB,’ the bank said it had no plans to add bitcoin to its reserves.
“Bitcoin is not a currency, it rather is an asset and it is very volatile,” officials wrote quoting chief economist, Philip Lane.
The response continues the ECB’s underwhelming reaction to cryptocurrency it has already propagated in other public statements.
In May this year, a report dubbed “Crypto-Assets: Implications for financial stability, monetary policy, and payments and market infrastructures” concluded the entire phenomenon had little impact on the traditional economy.
Previously, the European Union’s reserve bank had also come out bearish on the idea of issuing a digital currency of its own, in contrast to noises now coming from China and several other states.
Predictably, cryptocurrency proponents had little time for Lane’s brief statements on bitcoin this time around.
“Bitcoin is money,” Pierre Rochard, a software engineer known for his advocacy, responded on Twitter to much appreciation.
Another user reproduced the ECB’s own inflation calculator, showing the decreasing purchasing power of the euro since its introduction twenty years ago.
That, they argued, was infinitely worse than the temporary bouts of volatility seen with bitcoin.
London-based crypto asset management firm Prime Factor Capital has obtained a license from the FCA to operate as a full-scope Alternative Investment Fund Manager.
London-based crypto asset management firm Prime Factor Capital has obtained a license from the Financial Conduct Authority (FCA) to operate as a full-scope Alternative Investment Fund Manager (AIFM). The development was announced in a press release on July 1
Being FCA-authorized gives Prime Factor Capital the right to operate as a full-scope AIFM under the European Union’s AIFM Directive (AIFMD). The Directive is a regulation applied to private equity funds, hedge funds, and real estate funds, which sets standards for marketing in regards to raising private capital, risk monitoring and reporting, among other issues.
As required by AIFMD, Prime Factor Capital has ostensibly appointed a depository that provide additional layer of protection to investors. Adam Grimsley, COO of Prime Factor, said that “full-scope AIFMs are subject to heightened transparency, disclosure and reporting requirements, in addition to a number of other obligations.”
Nic Niedermowwe, CEO of Prime Factor, stated, “This Being FCA-regulated brings us under the purview of one of the most recognised financial markets regulators globally. This is particularly relevant in the cryptocurrency space, which has repeatedly captured headlines for poor operating standards and even fraudulent activity.”
The press release claims that Prime Factor is the first dedicated cryptocurrency asset management firm authorized by the FCA. As reported last August, the FCA granted its third e-money license to Wirex, whose main product is a prepaid debit card that converts crypto into fiat currency for everyday use.
The FCA also launched a United Kingdom fintech sandbox in March 2016 aiming to facilitate innovative fintech development within a protected testing environment that streamlines strict regulatory requirements. In late April, the sandbox onboarded three more blockchain businesses from a total of 99 applications.
The officials said that the government should ban cash payments over 3,000 euros, regulate cryptocurrencies and ban 500 euro banknotes, as these instruments can purportedly facilitate money laundering.
The Netherlands do not recognize cryptocurrency as a legal currency, although last year a Dutch court found bitcoin (BTC) to be a legitimate “transferable value” in a penalty payment case.
According to the statement, Minister of Finance Wopke Hoekstra and Minister of Justice and Security Ferdinand Grapperhaus sent the “approach to money laundering” proposal to the parliament on July 1.
The draft also asks to increase the enforcement capacities of financial regulators and relevant authorities and watchdogs groups such as the Financial Intelligence Unit, the police, the Fiscal Information and Investigation Service and the Public Prosecution Service.
If the bill is approved, banks will also reportedly be encouraged to share information concerning suspicious clients. The Netherlands will also advocate for the creation of a European Union regulator dedicated to fighting cross-border money laundering. Grapperhaus commented:
“Crime cannot pay. Not in the Netherlands, not in Europe and not worldwide. Through a joint effort, we want to take the approach to money laundering to a higher level.”
In January, Hoekstra received official advice from the Netherlands’ Authority for the Financial Markets and the central bank, De Nederlandsche Bank, that a licensing system should be introduced for crypto services.
Italy has had its share of economic problems in the past decade and a growing number of its citizens blame the euro for their country’s misfortunes. Italians, many of whom still prefer to use cash, are now turning their attention to cryptocurrencies such as BCH. Federico Pecoraro, the CEO of Chainblock, one of the first crypto companies in the country, thinks it’s the right time to enable more people and businesses to benefit from using decentralized money. He considers bitcoin cash a good candidate to become the world’s digital coin for daily spending.
Rome’s Troubles Create Conditions for Cryptocurrency Adoption
Italy is an interesting case in Europe. In certain aspects, the country is part of EU’s Southern Flank, a region facing serious economic and financial challenges in the past 10 years. On the other hand, it’s one of the world’s largest economies. And just like the rest of the continent, it has its own North-South disproportions in terms of industrialization and level of economic development. As a whole, Italy remains one of the most advanced economies, it’s the third-largest in the Eurozone and the eighth in the world by nominal GDP. It is also one of the largest exporters on the planet, including of high value added products.
The Italian economy took a hard hit from the 2008 financial crisis. The country’s problems were exacerbated by its huge public debt accumulated due to excessive spending by the government in Rome during the previous couple of decades. Since then, Italy has managed to catch up with the average Eurozone growth indicators. However, many ordinary Italians, over a third of whom live in poverty or risk of social exclusion, blame the adoption of the euro for the loss of economic power. Critics say Europe’s common fiat currency has been tailored to the interests of others further north.
In these circumstances, cryptocurrencies are gradually winning hearts and minds in Italy. Despite the ups and downs, the long-term trend in the economy built around decentralized digital assets has been mostly positive. Crypto winter, which seems to have passed already, has been a tough time for almost any company involved in cryptocurrencies, according to Federico Pecoraro, CEO of Chainblock. There has been an overall decrease in transactions in the Italian crypto sector during last year. “Media coverage has been quieter after March 2018 too,” the entrepreneur told news.Bitcoin.com.
Leading Italian Crypto Company Launches New Services
Chainblock is a well-established crypto company which started in 2013 as the first Bitcoin ATM operator in Italy. It has recently expanded its portfolio and now operates Chainblock Buy, a hybrid exchange for buying, trading and selling cryptocurrencies, Chainblock Buy With Cards which is a service for people who want to buy coins with debit and credit cards, and Chainblock Pay, a solution for merchants that want to accept crypto payments. The latter already has a prominent client – Vapor Art, which is the largest supplier of e-cigarettes in Italy. Pecoraro explained:
We love small businesses that want to accept crypto payments but we want to enable as many merchants as we can with a strategic market approach. Our goal is to provide affordable and scalable solutions for both big and small shops and spread real cryptocurrency mass adoption. We plan to enable 5,000 merchants to accept Bitcoin payments.
Pecoraro pointed out that Chainblock Buy With Cards and Chainblock Pay are the company’s latest products that were launched in 2019, while Chainblock Buy has been online since last year. At the same time, the company remains a market leader with its core ATM business – people can use its teller machines to purchase digital coins with fiat cash. “Our mission is to allow anyone to easily buy and spend cryptocurrencies, and we proudly support Bitcoin Cash from its beginning,” emphasized the company’s chief executive.
Like other crypto businesses with strong foundations, Chainblock has used the “winter months” in the industry to develop new products in order to expand its customer base. It also installed six new ATMs in 2018, including one device in a large shopping mall visited by over 8 million customers annually. “At the end of 2018, we had a 156% increase in transactions and a 144% increase in new users,” Federico Pecoraro revealed. He believes Italy has what it takes to become the starting point of an economic revolution that embraces cryptocurrencies and says this could happen sooner than people might think. That’s why, during a meeting with representatives of Banca d’Italia, the country’s central bank, his team proposed the conversion of some of the nation’s gold reserves into bitcoin. Italy actually has the third biggest gold reserve in the world, the businessman noted.
Pecoraro further elaborated that while bitcoin core (BTC) may have the role of a store-of-value currency at the moment, bitcoin cash (BCH) could be the cryptocurrency that would fit perfectly as a real global coin for daily spending. “We’re proud to support it on our products. Indeed, our clients have the opportunity to buy BCH through any of our services,” he stressed. The entrepreneur also shared details about the profile of his company’s customers. Most often, young clients buy online while older customers generally prefer to purchase digital assets from ATMs with cash.
“Italian people still use a lot of cash, and we give them an easy way to convert it into their favorite cryptocurrencies. The average Chainblock Buy user is a male aged 24-35 who wants to invest some money in cryptocurrencies, while the average Chainblock ATM user is rather a curious person exploring cryptocurrencies for the first time,” said Federico Pecoraro. “Our ATMs guarantee a unique experience through which people can understand how easy it is to buy bitcoin cash and bitcoin core.”
Italy is home to large diasporas from Eastern Europe, Africa, the Mediterranean region, and Pecoraro acknowledged that immigrants and guest workers were among Chainblock’s first clients. “In fact, cryptocurrencies are still the best way to send money worldwide, a cheap and fast way, especially in countries where there is no strong banking system. At the same time, due to strict KYC/AML policies, sending coins is not as easy as it was years ago and this could be a barrier for first-time users. We try anyway to do our best and we also expect to work soon on specific remittance products and services,” the CEO added.
Lack of Regulatory Clarity for Digital Assets Persists
Chainblock is operating as a crypto company that provides non-custodial services but it’s compliant with the applicable know-your-customer (KYC) and anti-money-laundering (AML) requirements and is partnering with traditional financial institutions including the central bank. However, Italian authorities have so far taken few steps to regulate the cryptocurrency industry. In February 2019, lawmakers approved a bill introducing legal definitions for terms associated with the crypto sector such as “smart contract” and “distributed ledger technology” (DLT). The law, which is the first attempt to regulate some aspects of the industry, tasked the country’s Agenzia per l’Italia Digitale with creating specific technical standards DLT technologies will be expected to meet.
Despite the new legislation, the legal status of cryptocurrencies in Italy remains largely undefined. Banca d’Italia has previously described them as “digital representations of a value” and some substatutory acts on money laundering have noted that coins can be transferred, stored and traded electronically, used as a means of exchange and to pay for goods and services. In early 2018, public consultations were conducted on the adoption of rules to govern the registration of companies dealing with crypto assets, and in December the Ministry of Economic Development selected 30 individuals to develop the country’s regulatory strategy regarding blockchain technologies and cryptocurrencies.
The Italian securities regulator, Commissione Nazionale per le Società e la Borsa (Consob), has so far issued multiple warnings against unlicensed companies promoting crypto investment opportunities. Meanwhile, the debate on how to tax crypto holdings and profits continues. More clarity regarding cryptocurrency regulations in Italy and other countries is likely to come after the recent release of the international standards for virtual assets issued by the Financial Action Task Force (FATF). The intergovernmental body vowed to closely follow their implementation in member states within the next 12 months.
Do you expect Italy to regulate cryptocurrencies by the end of 2019? Share your thoughts on the subject in the comments section below.