New Zealand tax authorities issued guidelines on how to tax incomes from cryptocurrency. New Zealand recognized cryptocurrency as a mean of payment for fees and salaries. New rules will apply for salary and wage earners, but not for self-employed taxpayers. Regulators noted that “In the current environment where crypto-assets are not readily accepted as payment for goods and services, the Commissioner’s view is that crypto-assets that cannot be converted directly into fiat currency on an exchange [...] are not sufficiently ‘money like’ to be considered salary or wages”. New Zealand joined the group of countries that are tightening their tax rules in order to include cryptocurrency as a taxable income.
European Parliament’s Panel for the Future of Science and Technology issues study on blockchain and GDPR
The European Parliament’s Panel for the Future of Science and Technology (STOA), issued a study on blockchain and the GDPR titled: ‘Can distributed ledgers be squared with European data protection law?’ The study discusses the EU’s application of the GDPR to blockchain technologies. The report evaluates the most relevant aspects of the European data protection law in relation to blockchain.
The report focuses on three policy options: (a) ‘Regulatory guidance’ calls for further legal certainty for the blockchain industry regarding the privacy of data and data protection. It calls for a co-ordinated reaction from the European Data Protection Board and to rethink the Article 29 Working Party guidelines on anonymisation techniques (the working party concluded that certain data can be anonymised by extensive encryption of data that is used in public databases).
(b) ‘Support codes and certification mechanisms: Both certification mechanisms and codes of conduct exemplify a co-regulatory spirit whereby regulators and the private sector devise principles designed to ensure that the principles of European data protection law are upheld where personal data is processed.’
(c)‘Research Founding’: Stating that the first two options has limitations, the report suggests that ‘…solutions could be found by means of interdisciplinary research, devising both technical and governance remedies and experiments with blockchain protocols that could be compliant by design.’
South Korean tech company Samsung joined forces with major South Korean banks, mobile operators, and blockchain companies, to develop an online authentication solution based on blockchain technology. [link - korean]. Companies agreed on testing the system that would allow users to handle the online authentication without a trusted third party. The ID could be used for numerous cases of authentication, certification, digital signatures, and even university diplomas. Project is scheduled to launch in 2020. [link]
In a press conference held on July 15, US Treasury Secretary Steven Mnuchin said Facebook’s proposed digital currency, Libra, “could be misused by money launderers and terrorist financiers” and that it was a “national security issue.” Earlier this month Facebook announced the issue of its native cryptocurrency called Libra. Libra is set to be released in the first half on 2020.
Bank of Japan Deputy Governor Masayoshi Amamiya, said in a statement that Facebooks’ cryptocurrency called Libra, must comply with regulations on money laundering and risk management. Facebook is working on a global cryptocurrency that will be introduced into the companies large social media networks Instagram and Facebook, and their messaging platform app WhatsApp. Japan regulators expressed concerns that Facebook's cryptocurrency will have significant impact on Japan currency and needs to be regulated within the existing laws.
Libra website is live and offers the landing spot for questions related to Libra. Libra is announced by the Libra Association non-profit organisation based in Geneva, Switzerland, as a ‘global currency and financial infrastructure’ to improve the lives of billions of people that are still not connected to the banking and financial services (term often used is: Unbanked). Libra Association is established in order to provide the reserve for the currency, develop and overview the Libra blockchain. Founding member among others, are private companies: PayPal, Mastercard, Visa, Stripe, Uber, Vodafone, Spotify, eBay, Lyft, and a non-profit organisations: Kiva, Mercy Corps, Women’s World Banking.
Facebook is a part of the Libra Association trough its newly formed subsidiary Calibra. Calibra will develop the electronic wallets for the users to receive and spend Libra cryptocurrency. Facebook roles in a decision-making process will be equal as other members. Libra Association pledged to extend the membership to support the network.
In its whitepaper Libra is described as currency developed on a blockchain. This blockchain is private or permission based, so only selected players (nods) can use it, observe and verify transactions that it carries. Foundation suggest $10 million fee for companies to be selected as a nod in this network. Libra announced that they will start transition to open/permissionless blockchain within the next five years.
Libra is a ‘stablecoin’, cryptocurrency that is backed by the major fiat currencies. Libra announced to be backed by a basket of international fiat currencies, and offered on exchanges, thus users can be ‘confident the value of their coins today will be relatively stable across time’
Launching of test-net to introduce developers to the network is a starting phase in cryptocurrency launch. Full network will be live at the first half of 2020.
Australia’s security regulation authorities Australian Securities and Investments Commission (ASIC) issued the guidelines for the ICO and crypto-assets. By their words regulation is following the incentive from the Australian Consumer Law and it is talking the emergence of crypto-asset category. Decided by the new regulation cryptocurrency exchanges will have to obtain the Australian market license, while payment and service providers will need to comply with the set of rules needed for the ‘non-cash payment facility’.
Regulation further defines the role of specific actors in crypto-asset industry, namely: Crypto-asset issuers (ICO's), Crypto-asset intermediaries, Crypto-asset payment and merchant service providers, Wallet providers and custody service providers and consumers. You can access the document here.
According to the reports, Brazil’s President of the Chamber of Deputies, issued a call for forming the commission which will work on the new set of rules around the cryptocurrency. This commision is to be consist from 34 members and will propose the future regulation. The regulation is aiming to implement the rules of the Financial Action Task Force (FATF) on Cryptocurrency.
The Financial Action Task Force's rules will be officially presented at the G20 ministerial meeting this June in Tokyo.
The World Economic Forum announced the formation of six Global Fourth Industrial Revolution councils to work on new technology policy guidance. The councils will aim to help policy makers to regulate artificial intelligence, autonomous mobility, blockchain, drones, Internet of Things, and precision medicine. The participants of the boards will be leaders from the public and private sectors, civil society and academia and will gather regularly to address the relevant regulatory issues, to define a mutual understanding of best policy practices and provide strategic guidance. According to the announcement, the councils’ members already met for the first time at the Forum’s Centre for the Fourth Industrial Revolution Network in San Francisco and are planning a global summit on technology governance next year in April 2020..
Facebook is planning to launch a cryptocurrency for digital payments by 2020. Dubbed “GlobalCoin”, the system is envisaged to provide a secure and affordable payment system even to the unbanked.
According to a report by the BBC, GlobalCoin will be ready for testing in a dozen countries by the end of this year. In the runup, Facebook founder and CEO Mark Zuckerberg met with Bank of England governor Mark Carney last month, to discuss the project. Facebook has also broached the idea with US treasury officials.
The social media giant has 2.4 billion users worldwide. It also owns the private messaging application Whatsapp, which is popular in low and middle income countries. Last year, it was reported that Facebook was developing a payment technology known as StableCoin that would allow Whatsapp users to send and receive money on their phones. Mexico’s Santader Bank is already piloting national Whatsapp payments.
GlobalCoin will allow Facebook users to change US dollars and other international currencies into digital coins. The coins will then be used to purchase goods and services online. The ecosystem will include merchants and e-commerce platforms who will accept GlobalCoins as payment, as well as banks and brokers who will facilitate currency exchange to digital coins.
Facebook is mulling over how to make the system affordable for it large user base. It is likely to face opposition from privacy groups as well as banks. If successful, GlobalCoin could revolutionise digital payments by expanding online financial services across many nations and unbanked populations.