Iran to Use Bitcoin for International Trade, Bypassing the Dollar Due to US Sanctions

With the latest amendment to the legislation, Iran has become the first country to use cryptocurrencies at a state level for import funding.

The Iranian Cabinet amended legislation to redirect digital currencies into the funding mechanism of the Central Bank of Iran (CBI) for imports, as per the report by the official The Islamic Republic News Agency (IRNA). The report by the CBI and the Ministry of Energy said,

“The miners are supposed to supply the original cryptocurrency directly and within the authorized limit to the channels introduced by the CBI.”

The limit on crypto for every miner will be decided by the level of the subsidized energy used for mining and the Ministry of Energy’s instructions.

This could create a war of hash rate in the Bitcoin space as China continues to lose its share while Kazakhstan, Iran, Malaysia, and Canada record an increase, as per Cbeci.org.

Iran’s share particularly has increased by over 2% in April 2020 from 1.74% in Sept. 2019.

Iran’s cryptocurrency move isn’t new and is a necessity for a country that is strapped for international currencies. In August 2019, it officially legalized crypto mining but banned trading in an attempt to take advantage of its subsidized electricity and extract taxes.

Iran’s fiat currency, the Iranian Rial, has also fallen as the country struggles with inflation, currently at 34%, for the past three years. Its economy has also been contracting since last year; this year, it did -10% a quarter. About a year back, Brian Hook, the US Special Representative for Iran had noted that,

“The regime is struggling to acquire the foreign currency they need to procure imports such as machinery, industrial inputs, and consumer goods.”

Earlier this year, the nation allowed power plants to operate large scale Bitcoin mining operations.

Given that Iran is also in the grip of US sanctions, it is bypassing the dollar and officially using Bitcoin. The country is also considering creating its own digital currency.

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Author: AnTy

EU’s Draft Regulation to Fragment the Crypto Market with Special Focus on ‘Subset’ Stablecoins

The 168-page long leaked version of the draft legislation of “Markets in Crypto Assets (MiCA)” by the European Commission provides legal certainty about digital currencies.

To be issued later this month, the set of regulations will be covering the issuance and trading of digital assets across the bloc.

Europe is basically planning to regulate crypto-like other financial instruments with the purpose to “further enable and support the potential of digital finance in terms of innovation and competition while mitigating the risks.”

However, the European Commission is putting a particular focus on stablecoins, a “subset of crypto-assets” leading to market fragmentation.

This is no surprise given the calls for regulating them for some time now. As we reported, this month, first, Bank of England governor and then five of the European countries supported regulatory oversight for asset-backed coins like Facebook’s Libra.

Additionally, regulators believe stablecoins have the potential to become widely accepted and potentially systemic, and of course, the plans for CBDC are behind the decision.

The new regulation will establish specific rules for ‘stablecoins,’ including when these are e-money.

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Author: AnTy

Switzerland Passes Blockchain Legislation Unanimously; Will Take Effect Early 2021

  • Switzerland has finally approved legislation for blockchain and digital assets, making it one of the major financial hubs to have a formal regulatory reference point for the upcoming crypto market.
  • The country’s parliamentarians voted unanimously for the ‘Blockchain Act’ that had been passed earlier in summer.

According to a report by the international unit of Swiss Broadcasting Corporation, SWI, this legislation on DLT’s and blockchain is likely to come into effect at the beginning of 2021. The milestone will open up doors for Swiss crypto-savvy investors to participate in the latest tech, including decentralized finance (DeFi); companies will also be able to tokenize shares within the law amongst other assets.

These new blockchain-oriented laws for Swiss crypto companies define several events and the probable course to follow, should such situations arise. Given the new dynamics underpinning crypto ecosystems, some underlying laws on bankruptcy and security trading have been amended to accommodate the digital assets.

The legislation goes to the extent of providing clarity on trading security tokens as well as due diligence procedures by service providers. The clarifying is an effort to curb money laundering and terror financing activities that appear to be thriving in crypto networks. Speaking to Decrypt, Urs Bolt, a leading Swiss FinTech influencer, noted that the new laws would be a big boost for the country’s burgeoning crypto space. He commented,

“Overall, it will create one of the most favorable regulatory environments in the world. It will allow the financial center to lead in the digital asset space and hopefully attract new business into CryptoValley.”

Interestingly, this latest legal advancement comes just after Switzerland’s Canton of Zug decided to accept tax payments in crypto. The town, which has earned a nickname ‘Crypto Valley’ due to the high blockchain and crypto activity, said that residents can now pay their taxes in Bitcoin (BTC) and Ethereum (ETH) via QR codes; the initiative will roll out in Q1, 2021.

It is quite noteworthy that Switzerland joins its neighbors Malta and Liechtenstein, which had already enacted comprehensive legislation for blockchain-related tech. However, the country’s position on a CBDC remains unclear despite global hype and China’s debut of its digital yuan.

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Author: Edwin Munyui

Russian Economic Ministry To Create Crypto And Blockchain Regulatory Sandboxes In New Bill

The Russian Federal Ministry of Economic Development has proposed new legislation that seeks to legalize crypto as well as blockchain-based initiatives through a special regulatory framework.

The Ministry of Economic Development has already crafted and introduced a draft legislation to the State Duma, Russian Parliament, in a bid to enable the testing of blockchain and crypto initiatives in a specified regulatory sandbox.

The draft law will apply to digital technologies that will be incorporated into eight sectors ranging from financial markets, government services, trade, healthcare, distance learning, transport, manufacturing to construction.

The proposed legislation will be vital in unlocking experimental testing for projects such as unmanned automobiles, use of data without prior consent as well as diagnostics.

As per the local reports, partakers of the regulatory sandbox from the blockchain and crypto sector will enjoy regulatory relief in different fronts such as the minimum capital size, reporting as well as reserve funds. Those using the sandbox will also be exempted from the nation’s foreign exchange law.

According to the Economic Ministry, Russia’s central bank, Bank of Russia, will be solo financial market regulator in the regulatory sandbox. However, it is still not clear if the bank is supportive of the ministry’s initiative.

The latest news comes just hours after a top Bank of Russia official stated that the nation’s virtual assets law is set to ban the issuance as well as circulation of cryptocurrency. As per the official, the Digital Financial Assets bill is set to ban almost all crypto-based aspects apart from holding. The bill has been delayed various times after it was introduced to parliament back in January 2018. Not even an order from President Putin could see the bill sail through.

[Also Read: Russian Govt Looks To Block Censorship-Resistant Tech; IoT, TOR, and Telegram’s TON]

Push For Digital Payments

Meanwhile, Russia’s central bank is urging the citizens as well as merchants to utilize digital payments and cut on the use of cash, Reuters reports. The bank is pushing for the adoption of digital payments in efforts to stem the spread of coronavirus through banknotes.

The central bank is also urging banks to encourage their customers to use cashless means.

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Author: Joseph Kibe

Central Bank of Russia Proposes Amendments To Legal Framework for Tokenization

The proposed cryptocurrency legislation in Russia could change a lot, now that a new bill for tokenization has been filed.

On February 17, the Central Bank of Russia (CBR) has made the announcement that it has completed a blockchain tokenization pilot program. Furthermore, the bank proposed that the digital assets law in Russia to be more accommodating for tokenization platforms.

The CBR Platform Offering New Investment Options

Open to all organizations, the CBR platform allows users to issue a basket of assets-backed hybrid tokens. The technology it uses is believed to expand financing opportunities for businesses, all while offering new investment opportunities. Ivan Zimin, the head for the CBR’s fintech division said, the project is one of the biggest sandbox-backed ones in the country. He was very excited about offering the option of hybrid tokens’ issuing because he believes these can adapt more rapidly to the users and businesses’ demands.

The Platform Was Developed by Nornickel

Nornickel is one of the world’s biggest mining companies and the company that has developed the CBR platform. It had previously created another platform for tokenizing palladium and started in December 2019 to test a digital asset trading one. When it comes to its stand on cryptocurrency, the Russian government is quite contradictory. Back in 2018, the country’s parliament started working on a bill meant to regulate how digital assets are being used. However, the acceptance of the bill has been many times postponed, remaining to be re-addressed until this month.

Russian Regulators Still Skeptical About Cryptocurrencies

While the new Prime Minister of Russia said the government should prioritize a digital economy, the country is still not making too much progress in this direction. The support for blockchain technology exists, but Russian regulators are still skeptical when it comes to cryptocurrencies. In the complex process of making decisions, the CBR and a few ministers were even considering in November to ban the use of cryptocurrencies for payments and even to create a legal framework for confiscating Bitcoin (BTC).

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Author: Oana Ularu