Stablecoins Do Not Comply with FSA Regulations

Cryptographic regulations do not cover stablecoins, as the Japanese Financial Services Agency (FSA) considers it incorrect to regard them as cryptocurrency, reports

Current legislation can be applied only to digital currencies, which are used as a means of payment. Stablecoins do not comply with legislation. Therefore, they do not fall under its influence and are not taxed.

Stablecoins are not the only virtual currency that is ignored by Japanese legislation and is not perceived as a full cryptocurrency. But despite this, digital currency that is associated with fiat is subject to the law. Operators of cryptocurrency exchanges that deal with such  currency are required to register with FSA.

We would like to remind you

Cryptocurrency Industry Got A Self-Regulatory Status In Japan

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Japan Released New Rules In Crypto Margin Trading

Japan is a progressive country in terms of economy, as well as cryptocurrency regulation. This time Japanese financial authorities have released a new set of rules regarding crypto margin trading.

Margin trading is a strategy that allows a trader to buy more stocks than you can afford on money borrowed from a broker (similar to loan).

The Cabinet of Japan approved draft amendments to Japanese financial instruments and payment services laws on Friday. In fact, they will limit leverage in virtual currency margin trading at two to four times initial deposits. Such restrictions are a common practice in foreign exchange trading.

All crypto exchanges throughout the country are bound to get governmental registration. This type of registration will differ from that adopted in 2017, which was mostly focus on preventing money laundering. However, these rules make exchange operators be monitored in a way similar to securities traders to protect investors.

These crypto exchange operators will be classified into categories to differentiate those who involved in margin trading from those who issued ICO tokens. This will help to distinguish unsavory offerings that are similar to frauds or Ponzi schemes and protect investors from losing their money. The new rules will come into force in April 2020. All margin cryptocurrency exchange operators have to be registered within 18 months of that date.

Such a time limit is set to take down unregistered “quasi-operators” which conduct operations without governmental approval. A senior FSA official said:

“We intend to motivate operators to do what they can to become registered.”

We remind you

Japan’s Biggest Bank Is Not Going To Create Its Own Cryptocurrency: Fake News Is Not Confirmed

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Winklevoss’ Brothers Said “Crypto Doesn’t Need Rules”, What About Crypto Companies?

Winklevoss twins are one of the most influential crypto personalities in the modern world. They are multi-millionaires with their own exchange – Gemini – and own dollar-pegged Gemini coin. It is no secret that the brothers have supported crypto since the beginning of it, but now they promote crypto regulation which confronts with the idea of crypto as well as with their billboard slogans. What happened?

Crypto Needs Or Doesn’t Need Rules

The twins are known for deconstructing the stereotypes and the myths that surround crypto in the public. They want to change the image of crypto that has been plagued with scams, hacks, frauds. However, their billboard slogan “Crypto Needs Rules” was criticized by Bitcoin users as the main meaning of crypto is to transfer money or digital assets without having to trust anyone.

Source: Bitcoinist

Cameron Winklevoss said that some people wondered why Gemini believes that the crypto revolution needs rules. He responded:

“Crypto doesn’t need rules, but the companies built on top of it do.”

Cameron also cited a part of report regarding to the defunct QuadrigaCX exchange which lost millions of dollars.

In order to prevent cases like QuadrigaCX and Mt.Gox, the latter’s CEO was sentenced to 2 years and six months in prison, the companies that provide custodial services of customers assets should be regulated. Furthermore, Winklevoss pointed out that these cases as well as other incidents could have been preventable if there was a proper management of the company, in particular, “proper rules and thoughtful regulation”.

We remind you

The Gemini Dollar of Winklevoss Brothers Is Officially Approved

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Paxos CEO: Metal-Backed Coin To Launch “Definitely” This Year

Paxos – a blockchain trust company – announced launching of a digital token backed by precious metals and this happens this year for sure. The CEO of Paxos, Chad Cascarilla, shared his thoughts regarding the launch in the interview with Fortune on March 11.

What is Paxos?

Paxos is a regulated financial institution that has already offered a stablecoin – Paxos Standard (PAX). It is the first Ethereum (ETH)-based stablecoin which was released by the company last September. It is backed 1:1 by American dollar, and is approved by the New York State Department of Financial Services (NYDFS), which means it is fully audited and highly regulated.

Paxos has more or less the same features and privileges as a bank, it is able to take care of mainstream financial assets. In May 2018, it has raised $65 million from investors, which in December that year PAX exceeded $5 billion worth of transaction volumes.

Metal-Backed Coin

As we said above, the CEO of Paxos, Chad Cascarilla, gave an interview where he told about a new Paxos’ digital coin. He assured everyone that the coin will be released definitely this year. The most important thing for the company is the ability to take commodity, thus they decided to back the coin with precious metals which are the most obvious.

To implement such a concept, the company has to ensure that the amount of inventory “in the real world” equals the one registered on blockchain. Cascarilla said:

“In order to put something in a blockchain, you have to make sure you have the right amount of inventory in the real world versus what is in the blockchain. How you do with a gold token is how much gold do you have in a vault equals how many gold tokens outstanding.”

The CEO said that the company’s status of financial institution helps them to ensure the amount of assets “in the real world” and on blockchain. The exact date of launch has not set yet.

You can see the full interview below:  

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It Was Offered to Ban Anonymous Cryptocurrencies in Texas

A bill was introduced in Texas which demands an identification of a person who sends or receives cryptocurrencies. However, the bill specifies that if a user has already been using a verified identity digital currency then there is no need to give any person’s verification to the government.

If approved, the bill will take effect September 1, 2019.

The community took the idea not very good.

Having mentioned the bill, Andrew Hinkes, the co-founder and general lawyer of Athena Blockchain, brought up some significant issues:

Texas is not the only example of cryptocurrencies confidentiality infringement. Recently in their report dedicated to usage of cryptocurrencies and blockchain technology the French National Assembly’s Finance Committee offered total ban on cryptocurrencies oriented on confidentiality such as Monero and Zcash.

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Tether is Launching USDT Stablecoin on Tron Blockchain

Tether announced its partnership with TRON to release a new version of dollar-pegged stablecoin USDT. On Monday, the company has released a statement saying that this time USDT will be based on TRC-20 which is a special technical standard used by TRON blockchain. Such protocol allows users to transact with dApps across the TRON network.

The company also hopes to boost the liquidity of decentralized exchanges to make TRON more accessible to investors. Providing USDT – a stablecoin – as an option makes it possible. TRON is the third blockchain on which Tether built its stablecoin, the previous two are Bitcoin and Ethereum’s blockchains. This version of USDT stablecoin is planned to launch in the next quarter of 2019.

The CEO of Tether has pointed out the positive side of the partnership claiming:

“This integration underlines our commitment to furthering innovation within the cryptocurrency space as we continue to anticipate the needs and demands of the digital asset community.”

One of the best features of USDT coin is its price stability. 1 USDT is always supposed to cost 1 US dollar and is always backed by it. Thus, many traders stash their funds in Tether when the market is uncertain. Such necessity of stable cryptocurrency makes USDT popular coin in the crypto world. Recently, its total market cap has even raised to 2.1 billion at one point. Such great results prove that Tether is the future of crypto world.

Source: CoinMarketCap

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Bahrain Issued Regulations Regarding To Crypto Assets Becoming The First Arab Country To Do So

Arab world is the last part of the world which joined the crypto community. Its first crypto exchange was established in 2018 while other worldwide exchange began operating back in 2014. However, the Arab countries, in compare to other nations, decided to approach this issue with the utmost responsibility.

The island country in Persian Gulf – Bahrain – has completed the final version of draft which regulates cryptocurrency in the country, thereby the nation has become the first Arab country to issue such a document. According to a statement made by the Central Bank, the Kingdom is now a safe place to run business crypto assets.

The director of Banking Supervision, Khalid Hamid, says:

“The CBB’s introduction of the rules relating to crypto-assets is in line with its goal to develop a comprehensive rules for the FinTech eco-system supporting Bahrain’s position as a leading financial hub in the MENA region.”

By now, the original text of regulations is not available yet. However, it is known that to conduct crypto operations, one should ensure the education.

We also want to remind you that Bahrain’s government is also interested in blockchain technology. The Minister of Electricity and Water Affairs, Dr. Abdulhussain Mirza, has claimed several times that blockchain technology is all about safety and progress. During the SmartSec Cyber Security and Blockchain Conference 2018, the Minister said:

“Technologies such as blockchain take us a huge step forward in finding a secure way to facilitate transactions. Blockchain’s ability to protect user’s data is a true mark of progress, because it can be applied in different companies from different industries including cybersecurity.”

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