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As the year comes to an end, BeInCrypto takes a look at how legislation and adoption of cryptocurrencies fared in 2019 and what we could expect in 2020.
The next decade will be critical and formative years for how digital currencies are implemented and regulated around the globe.
The European Union is shaping up to be an epicenter for the cryptocurrency space, and it could dominate the conversation early next year. However, crypto-based companies operating in its member countries are in a battle for their existence, as the Fifth Anti-Money Laundering Directive (AMLD5) comes into existence in two weeks.
Expected to be enacted on January 10, 2020, AMLD5 imposes stringent financial data reporting responsibilities on cryptocurrency firms.
Several EU-based cryptocurrency firms have already shuttered their services, citing the incoming regulatory measures. These include British payment processor BottlePay and Dutch Mining is the process that allows transactions to be verified, new information to be added to the database and new... More platform Simplecoin.
France is one of the few European countries that has continued to make progress regarding integrating cryptocurrencies into its financial system. Earlier this month, the Central Bank of France announced that it would be testing a Central Bank Digital Currency (CBDC) for financial institutions in the country in Q1 2020.
The bank revealed that the pilot would include financial industry players and not retail consumers. However, it’s a step in the right direction nonetheless.
Russia is another European country that was in the public eye this year. There were rumors that the Kremlin would provide cryptocurrency regulations early in the year. Despite several proposals pushed forward, nothing tangible materialized.
Things took a turn for the worse when reports surfaced that Russia would be open to banning cryptocurrency payments. The Russian central bank is also reportedly testing stablecoins pegged to real assets in a sandbox model and exploring its own CBDCs.
Despite being an industry leader, the United States didn’t make much progress in terms of regulating the space and providing clear-cut rules that will govern how companies will operate.
So far, a semblance of progress was made in taxation and compliance. The Internal Revenue Service (IRS) published crypto tax guidance back in October, covering several taxable events and how they should be treated viz a viz amount taxable.
However, it was soon noted that the guidance was insufficient, creating more problems than solutions. Seeking to remedy this loophole, crypto-loving members of Congress wrote the IRS this month, asking the agency to clarify several murky areas in its initial guidance and enhance its scope.
The Securities and Exchange Commission (SEC) didn’t approve any Bitcoin exchange-traded funds this year, despite the excitement. 2020 might be the year it happens, as the agency could make a decision on the application of Wilshire Phoenix in February 2020.
Cryptocurrency trading is banned in China, but that hasn’t stopped traders from circumventing the state’s ban to buy and sell their favorite digital assets. All of that ended this year, as Beijing cracked down on the sector, closing exchanges and making arrests of erring entities. This year also witnessed a landmark endorsement from the Chinese President.
Since then, speculations concerning the government’s digital asset, the Chinese Digital Currency or Electronic Payment System (DCEP), have been out of control. The speculations have been bolstered by efforts by the government to curtail the use and operation of non-state digital assets. As talks of the DCEP heat up, the country is undoubtedly one to look out for going into the new year.
While cryptocurrency trading and uses are limited in Iran, the country embraced Bitcoin mining significantly this year. Economic sanctions forced Tehran to look for alternative sources of income. Bitcoin mining has so far proved to be a great ally in ameliorating its economic situation.
In July, after Iran had introduced new tariffs for cryptocurrency miners, it finally recognized cryptocurrency mining as a standalone industry. Digital currency trading is still prohibited within the country’s borders, but the future looks bright.
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