Crypto News Round Up: Highlights

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By A D

Explore the latest developments in the crypto world, including stablecoin considerations, crypto lending programs, regulatory actions, emerging mining hubs, and challenges in taxing cryptocurrencies.

Circle Considers Stablecoin Issuance in Japan as Legislation Takes Effect

Circle, a leading payment services company, is actively exploring the possibility of issuing a stablecoin in Japan. This strategic move comes in response to the recent implementation of crypto legislation governing stablecoins in the country, effective as of June 1.

Jeremy Allaire, co-founder and CEO of Circle, expressed his optimism during an interview with CoinDesk Japan. Allaire believes that if stablecoins gain wider adoption for cross-border trade, foreign currency transactions, and global commerce, Japan has the potential to become an incredibly large market for this digital asset.

Jeremy Allaire, co-founder and CEO of Circle
Jeremy Allaire, co-founder and CEO of Circle. Image Source

The stablecoin bill in Japan positions the country as one of the first to establish a robust regulatory framework for overseas stablecoins, a development highly regarded by Allaire as the most important step taken by the government and the Financial Services Agency. Under the revised Payment Services Act, stablecoins backed by legal tender are certified as an “electronic payment method,” allowing their issuance. However, strict rules apply to stablecoin issuers, such as pegging the stablecoin value to the yen or other legal tender and ensuring holders the right to redeem them at face value. Stablecoins can only be issued by authorised financial organisations, such as trust corporations, licenced banks, and registered money transfer agencies.

The lifting of the ban on overseas stablecoins by the country’s Financial Services Agency in December last year further paves the way for Circle’s potential stablecoin issuance in Japan. Notably, Circle recently obtained a Major Payment Institution (MPI) license in Singapore, enabling the company to offer various digital payment token services, cross-border money transfers, and domestic money transfer services in the city-state.

Read: Crypto Tax Rules Revamped in Japan

As the interest in stablecoins grows among major Japanese financial institutions, such as Mitsubishi UFJ Trust and Banking Corporation, which plans to launch its own stablecoin platform called Progmat, the crypto landscape in Japan is poised for further developments.

Bitget to Launch Crypto Lending Program, Unlocking New Opportunities for Users

bitget is a crypto derivative exchange
The company’s main priorities include accounting for its holdings and minimizing risks to the collateral of its borrowers. Image Source

Bitget, a well-established derivatives trading platform, is set to introduce an innovative cryptocurrency lending program, providing users with a unique opportunity to leverage their existing digital assets. Through this program, users will have the ability to stake their own coins as collateral and receive loans in another cryptocurrency.

The offering primarily targets borrowers who are dissatisfied with traditional lending institutions, empowering them to expand their investment portfolios beyond their current holdings. Gracy Chen, the managing director at Bitget, emphasizes that the new lending program highlights the flexibility and utility of collateralised currency usage, enhancing capital utilisation for crypto investors. Users now have the chance to stake less-demanded coins and obtain loans in more liquid assets, enabling them to pursue diverse investment strategies.

By facilitating such lending services, Bitget aims to address the specific needs of borrowers in the crypto market and further strengthen its position as a leading player in the industry. It’s worth noting that the Crypto Loans program will require borrowers to adhere to specific interest rates based on market values of the staked collateral.

Alao read: Bitcoin Price Prediction as BTC Price Hits Highest Level Since June 2022, Eyes $30K

Thailand Implements Ban on Crypto Exchanges Offering Lending Services, Prioritising Investor Protection

Thailand is now the second nation in Southeast Asia to put a ban on cryptocurrency exchanges offering lending services after Singapore. The country’s Securities and Exchange Commission (SEC) recently released a statement outlining new rules and regulations aimed at safeguarding investors’ interests in the crypto market.

The ban specifically applies to depository services that offer returns to depositors and lenders, effectively prohibiting exchanges from offering lending and staking services to their customers. The SEC has also introduced a mandatory trading risks disclaimer, which must be clearlyvisible to customers engaging in crypto transactions.

the sec in thailand ; in their native language; crypto regulations
Thailand’s SEC issued regulations for crypto custody providers in January. Image Source

The disclaimer emphasizes the high risk associated with cryptocurrencies and advises users to thoroughly study and understand the potential risks before making any investments. With the implementation of these new regulations, the Thai SEC aims to establish a safer and more regulated environment for crypto transactions, ensuring that investors are protected from fraudulent activities and scams.

It is important to note that the new rules will come into effect on July 31, 2023, giving crypto exchanges and market participants time to adjust and comply with the regulatory requirements. As the landscape of crypto regulations continues to evolve, it will be interesting to observe how these measures shape the crypto market in Thailand and the broader Southeast Asian region.

Binance Temporarily Suspends Deposits and Withdrawals for Selected Multichain-Bridged Tokens

Binance, renowned as one of the world’s largest centralised exchanges, recently made an announcement regarding the suspension of deposits and withdrawals for a selection of multichain-bridged tokens. The decision comes as a response to recent developments involving the Multichain (MULTI) protocol, which took place on May 24.

The temporary suspension, effective from July 7, 2023, at 00:00 (UTC), restricts users from depositing or withdrawing the affected tokens on specific networks until further notice. This proactive measure by Binance aims to ensure the overall security and integrity of its trading platform, protecting users from potential risks and vulnerabilities. Alternative supported networks on Binance remain accessible for users to deposit or withdraw the affected tokens during this period.

United Arab Emirates Emerges as a Bitcoin Mining Hub in the Middle East

crypto (bitcoin) mining farm in abu dhabi
Mining farm in Abu Dhabi. Image Source

As a major location for Bitcoin mining in the Middle East, the United Arab Emirates (UAE) is quickly making a name for itself. With its growing number of free trade zones and a pro-Web3 ecosystem, the country is attracting crypto-focused companies and becoming a go-to destination for mining operations. The UAE’s transition from traditional energy sources, such as oil and gas, to solar and nuclear energy has played a crucial role in positioning it as an ideal location for Bitcoin mining.

The country’s commitment to clean and sustainable energy aligns with the global trend of incorporating renewable sources into the crypto mining process. By leveraging surplus energy from solar and nuclear power, the UAE aims to maximise energy utilisation and contribute to the mining network’s overall sustainability.

The UAE’s favorable taxation policies, including a zero-tax policy for registered entities in free trade zones, further enhance its appeal as a Bitcoin mining hub. As the UAE solidifies its status as a cryptocurrency-friendly destination, it is expected to attract more mining operations and contribute to the overall decentralisation of the Bitcoin network.

Read: Crypto Adoption Initiatives Continue in the UAE

South Africa Implements Licensing Requirements for Crypto Exchanges

South Africa’s Financial Sector Conduct Authority (FSCA) has recently announced a significant development in crypto regulations. All crypto exchanges operating in the country will be required to obtain licenses by the end of this year. This move aims to enhance regulatory oversight, promote investor protection, and ensure the integrity of the crypto market in South Africa.

the fsca in south africa passed laws for crypto exchanges
Crypto is recognised as financial product under their Financial dvisory and Intermediary Services Act, 2022. Image Source

The FSCA has already received approximately 20 license applications since the licensing process began, and more are expected before the November 30 deadline. Failure to comply with the licensing requirement may result in enforcement actions, including fines or even the closure of noncompliant crypto firms. The FSCA’s proactive approach to regulating crypto exchanges reflects acommitment to creating a secure and transparent environment for cryptocurrency activities.

By establishing a licensing framework, the FSCA aims to mitigate risks associated with unregulated exchanges and protect investors from potential scams or fraudulent activities. With the implementation of licencing rules for digital asset exchanges, South Africa will be among the first nations on the African continent to do so. The collaboration between the FSCA and other major financial regulators and policymakers, such as the National Treasury and the South African Reserve Bank, demonstrates a concerted effort to ensure comprehensive regulation and foster the growth of a responsible and sustainable crypto industry in South Africa.

International Monetary Fund (IMF) Highlights Challenges in Taxing Cryptocurrencies

The International Monetary Fund (IMF) has recognised the need for governments to address the complex taxation aspects of cryptocurrencies. In a recent working paper, the IMF acknowledges that the current tax systems are ill-equipped to handle the unique characteristics of crypto, such as its semi-anonymity, dual nature as an investment vehicle and payment method, and high volatility.

international monetray fund hq
Image Source

The lack of consensus on how to tax cryptocurrencies further compounds the challenge, as income, capital gains, and gambling classifications are still being debated. Moreover, the emergence of blockchain technology has introduced a range of crypto assets that require separate treatment under existing tax frameworks. The IMF paper also emphasizes that while crypto may not be an effective tool for tax evasion due to its fees and volatility, harnessing its potential for tax collection could offset the undesired macroeconomic effects and contribute to ecological goals.

However, greater analytical work and empirical evidence are needed to effectively leverage the vast amount of data available on crypto transactions. As governments worldwide grapple with the taxation of cryptocurrencies, the IMF encourages the exploration of innovative mechanisms, such as green taxation, to address environmental concerns. Finding the right balance between taxation and regulatory frameworks will be crucial to ensuring the long-term stability and sustainable growth of the crypto market.

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