Regulatory attitudes towards cryptocurrencies around the world are shifting. Hardly a day goes by without a central bank issuing a warning on the digital currency or new tax guidelines. However, it’s not all bad news – as some authorities are taking a far more positive approach.
In CoinDesk’s regulation roundup, Certified Public Accountant and ACFE Certified Fraud Examiner Jason Tyra examines the most significant digital currency news from the world’s regulators and law courts over the past two weeks.
Banking Supervisors Form Task Force To Study Bitcoin
The Conference of State Banking Supervisors, a private association of non-federal regulators in the US, has announced that it will form a task force to investigate “emerging payments issues”, including bitcoin and other cryptocurrencies.
The task force complements efforts being carried out independently by participating state regulators, such as New York State’s Department of Financial Services superintendent Benjamin Lawsky.
Although the organization isn’t new, not every state regulator is a participant in the CSBS. The organization lacks the authority either to set policy or to independently create new laws.
Instead, the Conference acts as a sort of professional organization that advises both state and federal regulators, and works to enhance the professionalism of bank examiners and other public sector officials. In that respect, it seems to be a very late comer to the bitcoin regulation scene.
Ohio Bans Bitcoin Payments for Booze
A representative of the Ohio Department of Public Safety, the state’s alcoholic beverage sales regulator, reportedly confirmed to a member of the local news media that licensed sellers would jeopardize their permits by accepting bitcoins in payment for alcoholic beverages.
The DPS’s stance on bitcoin is an unwelcome development for Bitcoin Boulevard US, a local initiative to promote bitcoin acceptance among merchants in downtown Cleveland, Ohio.
The agencies objection seems to stem from the specific wording of the law, which governs exchanges of alcohol for 'money'. Although the applicable statute does not define money, the Ohio Department of Public Safety has made an administrative determination that bitcoin cannot be referred to as such.
Bitcoin Revenues Are Taxable
The French Ministry of Economy and Finance joined most other western nations last week by asserting that bitcoin related revenues are taxable. Although the ministry admitted that current law does not specifically refer to bitcoin, a representative reiterated that all revenues must be declared for tax purposes in France.
As with most other countries, France has yet to provide guidance as to how and when bitcoin revenues should be declared, or disclose how it will go about detecting non-compliance.
Although the French government recognizes electronic currency, bitcoin’s volatility and lack of national sponsorship have relegated it to an unfavorable grey area in France and most other parts of the world.
BTC China Stops Accepting Deposits from China Merchants Bank
The creeping ban on bitcoin-related commerce by Chinese Banks continued this week with a preemptive decision by bitcoin exchange BTC China to stop accepting deposits from customers with accounts at China Merchants Bank. Withdrawal requests to China Merchants Bank accounts will still be honored by the exchange.
BTC China CEO Bobby Lee denied receiving any “direct notification” from the company’s correspondent banks, but claimed instead to be responding proactively to a social media post by China Merchants Bank.
The Chinese central bank, the People's Bank of China, has yet to publicly impose a prohibition on handling bitcoin transactions for member banks. Instead, the ban seems to be propagating in slow motion on an unofficial basis, with suggestion and rumor driving policy decisions at Chinese banks instead of decisive regulatory action.
Canada and Australia
Central Banks Opine on Bitcoin
According to a report by the Reserve Bank of Australia, bitcoin poses a “limited risk” to payment systems in that country. Though the report pointed out several macroeconomic threats, such as diminished ability to implement monetary policy by the central bank, its general tone was one of scepticism toward bitcoin’s disruptive potential in the country.
The Canadian Central Bank also declared itself “unconcerned” with bitcoin in testimony by a senior official before the Canadian Senate. Citing the “durability” of cash, the bank stated that “bitcoin is simply not in a position to threaten the official money supply”.
Compared to cash transaction volumes, bitcoin remains a tiny segment of the global economy. As a result, many Western countries have focused on its potential for facilitating unlawful commerce, rather than its potential for disruption of the economic status quo.
Australian authorities have previously suggested that they actively track all bitcoin transactions involving nationals of that country, although neither Canada nor Australia has yet resorted to sort of restrictive measures imposed on US bitcoiners.
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