Cryptocurrency-Friendly Legislation is Set In South Korea, Japan and Malta
It looks like we are seeing the dawn of a new age as cryptocurrencies and blockchain are finally receiving friendly legislation all over the world. Recently, three important countries have received friendly changes in the legislation to help the blockchain industry develop in the countries. Japan, South Korea and Malta are spearheading this change.
Legislation in South Korea
The government of South Korea has recently decided to use a new classification system for businesses related to cryptocurrency and blockchain (distributed ledger technology). According to a local news source, this is a mark, as the government did not accept cryptos as a legitimate business before.
This new system will divide the industry into three different sections, which will be further subdivided into other ten subsections. The three main sections will be “Software development and supply business”, “Computer programming, system integration and management” and “Blockchain technology-related hosting service industry”.
The first one will include decentralized apps (like the ones made on top of Ethereum technology), the second will be related to mining activities of different tokens and the last one will include crypto exchanges and brokerages.
South Korea’s government decided on this policy after consulting over 160 institutions, so it clear that a real effort was made to ensure that the regulation would be well maintained. The final draft of this policy will be launched at the end of July, sources affirm.
Up until now, South Korea had a very large cryptocurrency market which was amongst the biggest market in the world for this industry but the government was suspicious and somewhat negative over cryptos. ICOs were made illegal in September 2017 and exchanges had suffered severe limitations last year. This indicates a positive change from the government.
Legislation in Japan
According to a local news source, the Financial Services Agency of Japan is considering to revise its laws governing how cryptocurrency exchanges work in the country. The idea is to use an existing law, the Financial Instruments and Exchange Act to also cover this type of business.
This decision was taken because the government deemed that the current legislation does not offer enough protection for the customer in the case that the business collapses, as they would lose their investment.
The new law (that is actually old) requires the exchanges to store and manage the money of the clients in a separate way from the assets of the country. This way, in case the company ever goes down, the assets and the money of the clients would be protected by the law as cryptos would start to be treated as other financial products.
Japan has passed the Virtual Currency Act in April 2017, which requires exchanges to get FSA licenses so they can work in the country. This measure made cryptos more popular in Japan and today over 3.5 million people carry at least one crypto in the country, but this measure had some recent problems as well.
The major problem is that a popular exchange had millions of dollars in crypto stolen from recently, so the FSA started to crack down on the sector harder and inspect many businesses. Tokens like Monero and Dash, which are anonymous, were forbidden to be traded on cryptocurrency exchanges after the event.
Legislation in Malta
Malta, on the other hand, was always very positive on the cryptocurrency market. The Prime Minister of Malta has recently written on Twitter that legislation designed to attract more businesses based on blockchain technology had recently passed in the country.
This new legislation is composed of three new bills. One of them concerns Initial Coin Offerings (ICOs), another one is about the development of an industry-specific governing body and the last one is a general law to improve innovation in technology sectors. All three bills have passed unanimously on the congress of Malta.
Malta has been historically positive on crypto as it has already attracted some major cryptocurrency exchanges to the country (Okex and Binance). The Prime Minister states that these laws will have a very positive effect on the economic growth of the island in the next 4 to 5 years.