November 24, 2017
By Samuel Haig - November 25, 2017 (news.bitcoin.com)
South Korea’s Financial Supervisory Service has stated that it won’t regulate the digital token markets due to cryptocurrencies not comprising a legally recognized financial instrument. In central bank news, Zimbabwe’s central bank has stated that bitcoin is not legal, and Singapore’s central bank has launched the second public consultation for its newly proposed payments legislation. Here’s a regulator round-up.
The Governor of South Korea’s Financial Supervisory Service (FSS), Mr. Choe Hueng-sik, has indicated that the FSS does not consider bitcoin and other digital tokens to comprise legitimate currency, and as such, will not regulate the cryptocurrency markets.
The governor likened the FSS’s stance to its regulatory position regarding casinos, stating “It is the same with the fact that we don’t regulate or supervise casinos. Though there could be concerns on excessive gambling, that does not provide grounds for the FSS to control casino practices.”
The governor indicated that the FSS’s position would change only if cryptocurrencies were to become a legitimately recognized currency, stating “Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges. Supervision will come only after the legal recognition of digital tokens as a legitimate currency.”
Norman Mataruka, the Reserve Bank of Zimbabwe’s (RBZ) director and registrar of banking institutions, has told reporters that bitcoin is not legal. Mr. Mataruka stated:
“In terms of the bitcoin, as far as we are concerned, it is not actually legal. In Southern Africa, what we have done as regulators, we have said that we will not allow this in our markets… Research is currently being undertaken to ascertain the challenges and risks associated with these particular products and until we have actually established and come up with a legal and regulatory framework for them, it will not be allowed.”
The announcement comes shortly after the resignation of Robert Mugabe, following a coup that ousted Zimbabwe’s former leader of 37 years. In recent months, increasing coverage has been given to the inflated price of bitcoin in the African nation, with high demand for the cryptocurrency being driven by Zimbabwe’s prevailing currency crisis.
Although Mr. Mataruka failed to clarify if he meant that the possession and use of bitcoin was illegal, or simply that bitcoin does not comprise a legally recognized currency in the state of Zimbabwe, it is unlikely that the RBZ can spare the resources required to attempt to uphold prohibitive cryptocurrency regulations given Zimbabwe’s current political turmoil.
The Monetary Authority of Singapore (MAS), has launched its second public consultation regarding a newly proposed regulatory framework, the “Payment Services Bill”. The bill seeks to “streamline the regulation of payment services under a single legislation,” and “expand the scope of regulated payment activities to include virtual currency services and other innovations, and calibrate regulation according to the risks posed by these activities.” The MAS stated:
“When the new Bill is enacted, payment firms will only need to hold one license under a single regulatory framework to conduct any or all of the specified payment activities. Only payment activities that face customers or merchants, process funds or acquire transactions, and pose relevant regulatory concerns will need to be licensed. The new framework will expand the scope of regulation to include domestic money transfers… merchant acquisition… and the purchase and sale of virtual currencies… To help ensure that the expanded scope of regulation is not onerous, the Bill will differentiate regulatory requirements according to the risks that specific payment activities pose rather than apply a uniform set of regulations on all payment service providers… The Bill will empower MAS to regulate payment services for money-laundering and terrorism financing risks.”
Mr. Ravi Menon, the managing director of the MAS, stated: “We want to put in place a forward-looking regulatory regime to encourage wider adoption of secure e-payment solutions.” The public consultation will run from 21 November 2017 to 8 January 2018.
Images courtesy of Shutterstock, Wikipedia
Samuel Haig is a cryptocurrency and economics journalist who has been passionately involved in the bitcoin space since 2012. Samuel has written about the disruptive potential of cryptocurrency with regards to the dialectical relations within contemporary neoliberal capitalism.
October 20, 2017
By Francisco Memoria - October 20, 2017 (www.cryptocoinsnews.com)
According to TheNational.ae, bitcoin adoption in Zimbabwe is seemingly skyrocketing as the country’s economic situation looks bleak. So much so, that one bitcoin is trading at nearly $10,000 on the Golix.io exchange, while the global average is, at press time, of $5,642.00.
According to a local trader, bitcoin isn’t just being bought by individuals, but by businesses with bills to pay. The country adopted the U.S. dollar back in 2009 as its fiat currency, as the Zimbabwean dollar had lost nearly all its value.
At press time, LocalBitcoins Zimbabwe has people buying bitcoin at the global average, and some buying the cryptocurrency for cash for well over $10,000 in the country’s capital. Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.
Why Bitcoin Is So Valuable in Zimbabwe
In the early 2000s, according to the publication, Zimbabwe’s president, Robert Mugabe, encouraged citizens to invade commercial farms mostly owned by UK descendants. Following these invasions, the country’s agriculture collapsed, which led to the Zimbabwe Reserve Bank to run out of money.
In the mid-2000s, the bank decided to print Zimbabwean dollars to pay the army, civil servants, and police. The mass printing of dollars, as one would expect, led to hyperinflation to the point in which a customer walked into a store to buy bread, only to find its price had tripled once he arrived – if it was even available.
The problem got so bad, people carried around piles of valueless cash, and soon started hoarding goods to use as a medium of exchange. Then in 2009 Mugabe gave in and replaced the Zimbabwean dollar for the U.S. dollar to get rid of hyperinflation.
It worked and prices stabilized, but since the Zimbabwe Reserve Bank can’t print U.S. dollars, the country now imports them to get them onto the financial system. Speaking to a local publication, the reserve bank’s governor John Mangudya stated:
“Yes, we import cash almost every week and we are now importing $10 million on a weekly basis. When we say we import cash, we say we import dollars because we said we want to continue using the dollar in this economy.”
Then, with nationalization intents, exports started collapsing and now, according to Bloomberg, banks ration dollars to as little as $20 per person, regardless of how much each individual has in its bank account. Some even sleep outside banks to guarantee notes won’t run out before they get them.
The country’s central bank, to fix the problem, started issuing so-called bond notes that supposedly have the same value as the U.S. dollar. Most don’t fall for that, as foreign suppliers reportedly refuse to accept them, and some businesses charge premiums of up to 50% to accept them.
According to economist Vince Musewe the problem in Zimbabwe today isn’t the lack of goods to purchase, but the lack of money to do it with – exactly the opposite of what it was when the country’s crisis initially started. He stated:
“Then, there was plenty of cash money, but no goods in the shops. Now, there are goods on the shelves but no money to buy them with.”
To escape the country’s crisis, Zimbabweans are now turning to a currency that won’t fail them like fiat currencies did: bitcoin.
Posted by Francisco Memoria
Francisco is a cryptocurrency writer and trader, who's in love with technology and focuses on helping people see the value digital currencies have. Twitter: https://twitter.com/FranciscoMemori