From India to Australia via Gibraltar: Cryptocurrency Regulation Update

From warm welcomes to high surveillance, cryptocurrency is attracting government attention everywhere.

As the cryptocurrency industry spreads across the globe and grows in popularity, governments are forced to take notice. Their responses continue to vary.

India

Last week, the Reserve Bank of India released a warning regarding cryptocurrency use:

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“Attention of members of public is drawn to the Press Release issued by the Reserve Bank of India (RBI) on December 24, 2013, cautioning users, holders and traders of Virtual Currencies (VCs) including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs…. RBI has also clarified that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any VC.”

The backdrop to this warning is that Bitcoin is flourishing in India. Quartz reported in November that Bitcoin exchanges on the subcontinent have been reporting hundreds of thousands of new users on a monthly basis.

The central bank is uneasy about digital currency, and does not recognise it as legal tender. However, the government understands that strict regulation would be counter-productive, as customers would simply continue trading outside of the law, according to CryptoCoinsNews.

“If India had to ban virtual currencies then they would have done that by now,” said Vivek Steve Francis, CEO of Coinome.

France

On Friday, the French government approved the use of blockchain technology by banks in an effort to improve its reputation as a center of financial innovation, according to a report from Reuters.

Specifically, companies are now allowed to trade unlisted securities with blockchain technology. “The use of this new technology will allow fintech firms and other financial actors to develop new ways of trading securities that are faster, cheaper, more transparent and safer,” Finance Minister Bruno Le Maire said in a statement.

As London gets ready to float away from the continent, France is keen to attract the businesses that decide to jump ship.

Australia

Cointelegraph reported on Saturday that the Australian government has passed a law stating that digital currency will be treated exactly as fiat is when it comes to money laundering and terrorism.

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This means that the Australian Transaction Reports and Analysis Centre will be able to monitor the activities of all cryptocurrency exchanges.

Australia recognised Bitcoin as currency this year, and Bitcoin ATMs abound in the country. As they are now considered to be institutions that handle real money, cryptocurrency exchanges must accordingly register with AUSTRAC in order to be monitored for possible criminal activities.

Gibraltar

Coindesk reports that Gibraltar has taken a major step towards introducing a legal framework for cryptocurrencies to exist in.

The Financial Services (Investment and Fiduciary Services) Act was amended to “extend measures for the protection of investors to the customers of licensees carrying on controlled activities which are not investment services.”

Minister of Commerce Albert Isola said: “Gibraltar is one of the first jurisdictions in the world to introduce a regulatory framework for [distributed ledger technology] businesses thereby providing the regulatory certainty required by quality firms that we aim to attract to Gibraltar.”

Along with the legislation passed last month covering the commercial use of distributed ledger technology, the British overseas territory is proving to be one of the most welcoming places in the world for cryptocurrency.

UK

Gibraltar’s mother country seems to be far more suspicious of Bitcoin, according to the Daily Telegraph. The UK government has ordered the Government Communications Headquarters, or GCHQ, to “probe the risks associated with Bitcoin”.

“We are interested in anything that could affect the country, so Bitcoin is a major thing now,” said Chris Ensor, the deputy director for cyber skills and growth at the National Cyber Security Centre.

Bitcoin.com reports that the renewed interest from the agency is a result of the recent explosion in value and popularity of the digital coin.

GCHQ is the UK’s national intelligence security organisation, sometimes likened to the CIA. It was the subject of derision back in May when the agency posted a badly written poem just after the NHS was hit by a massive cyber attack which held thousands of medical records hostage for a Bitcoin ransom.

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