Cryptocurrencies’ regulation moves forward in several countries

Cryptocurrencies’ regulation moves forward in several countries

In Mexico, South Korea and New Zealand, governments have announced new regulations on decentralized digital assets

Cryptocurrencies’ regulation moves forward in several countries

By Editorial Staff

The news keep on growing around the world on the cryptocurrencies regulation. South Korea has held a long-awaited movement for the crypto community. Recently, the city of Busan was declared a zone “free of regulation” for the development of blockchain by the national government. This opens up a path for further liberalization of the cryptocurrencies in the country.

The country’s second largest city in population will host a wide range of blockchain offerings. The assets will be related to finances, public safety and tourism. With this, it is expected that investors move 29.9 billion won (US$ 25 million) to the region until  2021. Another expectation is that the development is spread between the Munhyeon Innovation District, the Centum Innovation District and the Dongsam Innovation District.

BNK Busan Bank, a local institution listed in the Korea Exchange, will oversee the blockchain management relating to financing. The institution may also be developing a stablecoin linked to the earnings.

Meanwhile, in New Zealand…

New Zealand also has innovations in the regulation of cryptoassets. The country’s tax office, the Inland Revenue Department (IRD), has legalized the receipt of wages in cryptocurrencies. The agency has published a new rule under the Income Tax Law, determining that employees can receive wages in crypto.

However, in order to achieve this, payments must be related to services performed under a contract of employment. They must also have a fixed value and be a regular part of the employee’s remuneration.

In addition, the asset received must be exchanged for fiat currency and must act basically as a  currency. Another requirement is that the cryptocurrency is tied to the price of one or more fiat currencies. Namely, it must be a stablecoin.

In Mexico, unfavourable cryptocurrencies’ regulation

In Mexico, a new Fintech law, issued by the Bank of Mexico (Banxico) conflicts with the accelerated growth of the fintech activity in the country. According to the national media, repression could force the closure of 201 listed startups.

The law, approved in 2018, but only recently in force, aims at crowd funding services and electronic payments. More than 57% of them are currently struggling against time to get permission to do business with the National Commission of Banks and Local securities (CNBV).

One of the biggest barriers for entrepreneurs is the high costs required for compliance. The estimate is that they must reach more than US$ 35,000. The law also requires companies to have a minimum annual profit of US$ 100,000, a value that few startups can reach.

In addition, entrepreneurs are subject to the prohibition of cryptocurrencies. A recent version of the regulation prohibited the fintechs from exchanging, transmitting and maintaining crypto.