Three recent regulatory moves by major cryptocurrency markets have brought momentum to the industry. India, France and South Korea have issued decisions in legislative and judicial contexts that favor the adoption of bitcoin and other cryptocurrencies, both as a means of investment and general use.
The most significant decision came from India. The country’s Supreme Court authorized the purchase and sale of cryptocurrencies, which had been banned in 2018. A lawsuit filed by the Internet and Mobile Association of India was responsible for reversing the ban. However, the industry still fears the outcome of a government panel that last year recommended a ban on all private cryptocurrencies in the country.
India is an important market for the cryptocurrencies sector, as it is one of the most populous countries in the world. In addition, it concentrates a strong market of developers and information technology. Thus, a possible ban on the purchase and sale of cryptocurrencies in that country could have impacts on the price of cryptoassets. The decision of the Supreme Court of India is considered historic and was well received by the entire cryptocurrency community
France recognizes bitcoin as legal currency
Another historic decision regarding the bitcoin came from France. France’s Nanterre Commercial Court has handed down a ruling making the bitcoin a legal currency in the country. The decision relates to a case between the Paymium, French cryptocurrency exchange, and UK-based alternative investment firm BitSpread. Paymium had lent 1,000 BTC to BitSpread before Bitcoin Cash’s hard fork in 2017.
After the hard fork, both Paymium and BitSpread claimed that the bitcoin cash created belonged to them. The court ruled in favor of the debtor, in this case, BitSpread. This case forced the court to consider the legal nature of the bitcoin. That is to say, the Commercial Court of Nanterre concluded that bitcoin loans are equal to any other consumer type loan.
South Korea takes away the industry of the grey zone
In South Korea, a broader law was well received by the market. South Korea’s National Assembly approved an amendment in early March that will officially bring cryptocurrencies to the country’s legal system. The amendment alters the Law on Reporting and Use of Specific Financial Information to account for the commercial activities of the cryptocurrencies. And it was drafted on the basis of the Financial Action Task Force (FATF) rules on cryptocurrencies, launched in the middle of last year.
Under the amended law, cryptocurrency companies in South Korea will have to meet KYC and AML requirements. Thus, exchanges, wallet providers and blockchain projects that have made initial token offerings need to partner with an approved South Korean bank to verify the actual names of market participants and the bank account information.
South Korea is one of Asia’s largest cryptocurrency buying and selling hubs, with more than 70 exchanges in the country. Until this regulation came out, this market operated in a gray area, only under guidelines and directives issued by legislators – a scenario very similar to what happens in Brazil. Market representatives hope that the amended law will provide clarity and a greater degree of legality than previously, the cryptocurrency market in South Korea did not have.