Wisly Wednesday Industry News — 7 July 2021

It’s been another interesting week in the crypto world with many fascinating developments taking place. The Philippines Stock Exchange plans to introduce cryptocurrency trading; Kazakhstan imposes cryptocurrency mining tax law; Barclays toughens its stance on Binance fund transfers, and Vietnam’s Prime Minister orders pilot implementation of cryptocurrencies.

The Philippines Stock Exchange (PSE) has plans in place to introduce cryptocurrency trading on its platform, pending approval from regulators in the country. This comes after the Philippines Securities and Exchange Commission (SEC) sought public comment from investors and banks in 2019 in order to understand the country’s need for a domestic crypto exchange. It later announced its intentions to issue guidelines for crypto exchanges in the Philippines after a draft set of rules were put in place.

While the government of the Philippines has been rather welcoming in its attitude towards cryptocurrencies, the Philippines Central Bank has been quite clear on its crypto rules that aim to curb money laundering activities in the country. CEO of the PSE, Ramon Monzon, was in a positive mood and explained that the exchange would provide a suitable platform for crypto trading in the Philippines due to its unique trading infrastructure and investor protection safeguards.

Monzon said, “If there should be any exchange for cryptos, it should be done at the PSE. Why? Number one, it’s because we have the trading infrastructure. But more importantly, we’ll be able to have investor protection safeguards especially with a product like crypto.” He added that cryptos are an asset class that the Philippines simply cannot afford to ignore due to growing global interest.

The government of Kazakhstan has recently signed into law a tax on cryptocurrency mining that will come into effect from 1 January 2022. This comes as the country has seen an influx of cryptocurrency miners due to Kazakhstan’s cheap electricity and available resources. The news broke through an official government notice that indicated that the head of state had signed the law into effect towards the end of June 2021.

The taxation of cryptocurrency mining is expected to rake in billions in Kazakhstan’s national currency and joins the likes of Iraq who have started to tax cryptocurrency mining activities. Businesses in the country, with the right resources and equipment, have identified lucrative opportunities in crypto mining. In light of this announcement, the majority of business owners have opposed these new taxation rules with many saying that this could spell the death of crypto mining in the country.

Electricity is available cheaply and in abundance within Kazakhstan’s borders, making it an attractive location for crypto miners to base their operations. This hasn’t gone unnoticed, however, as the government has also introduced electricity surges in anticipation of the increased demand from crypto mining activities. Global crypto businesses that have decided to base their operations in Kazakhstan are said to have accepted these new taxation rules begrudgingly.

Leading UK Bank, Barclays, has toughened its stance on cryptocurrencies by putting a stop on card payments for fund transfers to crypto exchange, Binance. This news means that customers of Barclays cannot deposit any funds into Binance with their debit or credit cards, effective immediately. Account holders of Barclays were informed of this decision via a recent text message from the bank.

This announcement comes hot off the heels of increased scrutiny for cryptocurrency trading from the Financial Conduct Authority (FCA) in the UK. The FCA recently announced that Binance Markets do not have any authority to carry out the regulated activity within the country’s borders. It bolstered its argument by stating that the Binance Group freely offered products and services to British clients without holding any form of license or registration.

In the text message, Barclays reiterated its commitment to help keep customer’s money safe and directed customers to the FCA website for clarification on its stance regarding Binance. The notice only specified debit and credit cards and did not mention any other types of transfers. Although Barclays customers can no longer make deposits into Binance with their debit and credit cards, they still have the ability to withdraw funds from the exchange.

The State Bank of Vietnam was recently directed to study and carry out a pilot implementation of cryptocurrency-based blockchain technology. This directive came by way of an order that was issued by Vietnam’s Prime Minister, Phạm Minh Chính, who earmarked the period 2021 to 2023 for this crypto initiative.

The Prime Minister indicated that Vietnam was looking at creating an eGovernment development strategy that would position the country as a digital government. Its enthusiasm to develop and master cryptocurrencies and blockchain is viewed as part of a bigger strategy towards harnessing the power of core technologies that aim to boost Vietnam’s economy.

While no specific cryptocurrency regulations are in place for digital assets or cryptocurrencies in Vietnam, the State Bank of Vietnam has previously issued reminders that digital assets and cryptocurrencies were not recognised legally in the country. The Ministry of Finance has, however, created a working group that is tasked with researching digital assets and cryptocurrencies as per the Prime Minister’s order.

The objective of the research is to formulate and propose regulatory policies and management mechanisms for digital assets and cryptocurrencies, and how these could impact Vietnam’s overall digital transformation strategy across different sectors. This pilot project would also help the Vietnamese government to identify positive and negative aspects of cryptocurrencies in order to create an appropriate management mechanism.

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