Sunday, February 10, 2019

ASEAN Countries and Crypto: Yay or Nay?

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Just two months ago, Writer Angaindrankumar Gnanasagaran summarised the latest policies and attitudes Southeast Asia had towards blockchain technology in an article titled Blockchain gaining ground in Southeast Asia, featured on The Asean Post. He reported that blockchain technology has “gained significant currency in Southeast Asia [as] many governments within the region have warmed up to the prospect of promoting the integration of this technology into businesses and the public sector”.

Just how true is this progression? Let’s have a look.

Philippines

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On 8th August last year, the government-owned Cagayan Economic Zone Authority (CEZA) announced its latest partnership with private property developer Northern Star Gaming & Resorts Inc. – the development of Crypto Valley of Asia, a fintech and cryptocurrency hub set to be built on the Cagayan Special Economic Zone and Freeport, and intended to house up to 25 crypto firms on its premise.

A few months later in October, Ateneo de Manila University and health-tech company MediXserve jointly launched the AMBERLab (Ateneo-MediXserve Blockchain Education & Reasearch Lab) to research future applications of blockchain in health-tech, fintech, edutech, Artificial Intelligence (AI), data analytics and other related industries.

This year, about a week ago on 7 February, The Philippines, through the Cagayan Economic Zone Authority (CEZA), approved the Digital Asset Token Offering (DATO) regulations that recognises CEZA as the principal regulating authority and The Asia Blockchain and Crypto Association (ABACA) as the designated self-regulatory organization (SRO) that will implement and enforce the new DATO regulations.

The rules are simple. All DATOs must submit proper documentation, providing details on the issuer, project, advisors, and certificates of experts and DA agents involved. Tokens can only be listed on licensed Offshore Virtual Currency Exchange (OVCE) and stakeholders must submit appropriate documentation with accredited wallet providers and custodians.

The regulations also classify DATO into three tiers:

Tier 1: Assets and investments ≤ $5M with payment in digital tokens

Tier 2: Assets and investments from $6M to $10M

Tier 3: Assets and investments ≥ $10M

Clearly, unlike its vague position last year, the Philippines has been gearing up for blockchain technology and has implemented new measures as a result to regulate the wave of digital tokens crashing into the local market. One of the largest banks, UnionBank of Philippines, even announced on 11 February that it plans to launch an ATM that will facilitate digital assets trade in the national currency, the Philippine Pesos. If the Philippines keeps up this optimistic outlook, she may just fulfil her vision of being the Crypto Valley of Asia.

Thailand

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If the Philippines seems supportive towards cryptocurrency, then Thailand is definitely a crypto wonderland. While others were still grappling to understand the blockchain technology and its idiosyncrasies, Thailand was quick to jump on the crypto train in 2018. Within the span of a few months, the Thai government enacted the emergency decree that allowed it to roll out a new law for the budding blockchain industry: the Digital Asset Business Decree.

This decree differs from other countries by skipping the core debate that demanded the differentiation between security tokens in cryptocurrency. Instead, it classifies cryptocurrencies as “a medium of exchanging goods” and digital tokens as “rights to participate in an investment, or to receive specific goods”. It even amended its tax regulations to include the taxation of cryptocurrency firms. For instance, firms raising funds through Initial Coin Offerings (ICOs) will be taxed 15% on their income while others undertaking Initial Public Offering are not. The two laws went effective as of 14 May 2018 and set the standard for other countries delving into the blockchain industry.

Now, at the time of writing, the Thai securities and exchange commission (SEC) has granted four operating licenses to applications from blockchain-based businesses applying for licenses to conduct local operations. The four applicants who were successfully awarded a license are: Bitcoin Exchange Co., Ltd., Bitkub Online Co., Ltd., Satang Corporation, and Coins TH Co., Ltd. The former three are digital asset exchanges, while the latter is a cryptocurrency brokerage.

That being said, Thailand’s friendliness towards the crypto trade is not to be mistaken with leniency or a laxation in security measures. While the above four were granted operating licenses, two other applications from Cash2coin and Southeast Asia Digital Exchange Co. (SEADEX) were rejected, having failed to meet the required criteria set out by the SEC.Thailand’s intention to retain a tight grip on the cryptocurrency industry is a smart move on the country’s part as news of cryptocurrency scams continue to flood the market. In November last year, Thai regulators even released their own web-based platform to host potential ICOs, ensuring the country is kept up with the latest projects in the cryptocurrency industry. The reason behind this scrutiny has been speculated by some to be Thailand’s way of conducting research and accumulating data in order to release a national cryptocurrency in time.

Indonesia

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In late 2017, the central bank of Indonesia, Bank Indonesia declared cryptocurrency to be illegal in the country under the Law No. 7/2011 and penned the BI Regulation, stating all financial transactions had to be conducted in the Indonesia rupiah. Yet, despite the bank’s firm opposition against these digital fledglings, it is clear to the world that the Indonesia government does not share its skepticism. On 3 June 2018, Beppebti, the Indonesian Trade Ministry’s Futures Exchange Supervisory Boards legalised cryptocurrencies as commodities in the country in spite of the central bank’s disapproval, making cryptocurrency trade legal in the eyes of the government. In fact, Indonesia Digital Asset Exchange (INDODAX) — the largest Indonesian cryptocurrency exchange — announced in March 2018 that the number of users on its platform had surpassed that of the Indonesia Stock Exchange.

While the bank remains vehement in its denial of cryptocurrency, the local citizens have embraced it. Indonesian media company Coinvestasi has organised the Indonesia Cryptocurrency Festival 2019 that is currently in the midst of its tour across various cities, sparking the conversation about cryptocurrency nationwide.

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Roadshow Timeline of Coinfest Indonesia 2019

Unfortunately, due to the nation’s vague stance, the local Bitcoin market holds less than one percent of the global cryptocurrency market, with only two Indonesia Bitcoin exchanges available for Bitcoin purchases at a fixed rate.

Malaysia

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2019 brings new beginnings and new regulations for digital asset offerings in Malaysia. Based on a notice from Malaysia’s Securities Commission (SC), the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 has been enacted since Jan. 15.The Order meant that token offerings and exchanges are required to seek approval from SC before operations can begin. However, despite Malaysia’s strict clampdown on ICOs, it appears that the country is not adverse to digital assets after all. Finance Minister Lim Guan Eng stated: “In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”In December last year, the SC and Malaysia’s central bank, Bank Negara Malaysia, jointly released a statement explaining that the purpose of these new regulations was to make digital assets “within the remit of securities laws to promote fair and orderly trading and ensure investor protection.”

Singapore

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Singapore has always embraced the potential of digital assets and its ability to transform the future. In November 2017, the Monetary Authority of Singapore (MAS) released the Payment Services Bill (PSB) in the Singaporean Parliament. In essence, the Bill subjected digital currency to the same laws regulating domestic and international money transfers, and foreign exchange transactions. The MAS also released a set of guidelines for parties interested titled “A guide to digital token offerings”. The document listed on their website contained general advice on application procedures and rules for companies to be legally qualified in offering and issuing digital tokens in Singapore. When confronted with security breaches in major cryptocurrency exchanges, MAS updated their Bill in January 2019 to safeguard the interests of cryptocurrency investors. The Bill proposes to implement a dual-track regulatory guideline for both major and smaller financial institutions respectively.

In summary…

While countries like Philippines, Thailand, Indonesia, Malaysia and especially Singapore embrace the future of cryptocurrency, other ASEAN countries continue to sit on the fence regarding digital currency. Vietnam remains undecided, as evident from the confusing debates wranged out amongst authorities and the ban on crypto trading despite possession of digital assets being legal. Laos approaches digital currencies with caution and Cambodia has ironically forbade finance firms from cryptocurrency transactions while creating its own national cryptocurrency. Other countries like Myanmar and Brunei continue to distance themselves from the world of digital assets and remain vague on their policies and governance.

Despite the uncertainty, however, ASEAN is clearly becoming an important market for traders of digital assets. As digital assets continue to gain prominence within the region, what better way to jump into the crypto market than with 1SG, a fiat-backed stablecoin pegged to Singapore’s own fiat currency, the Singapore Dollar?

About 1SG:1SG is a stable coin, issued by the Mars Blockchain Group which overcomes the problems of today’s cryptocurrencies, while providing open, transparent, efficient KYC/AML process. With the key features of stable value and high liquidity, Mars Blockchain is a start-up committed to becoming a leading stable coin in global cryptocurrency market. 1SG circumvents the volatility of other major cryptocurrencies by maintaining a fixed peg to $1 SGD through financial markets.For more details, check out www.1.sgTo trade 1SG now, head over to these exchange platforms:P2PB2B: https://p2pb2b.io/BitMart: https://www.bitmart.com/TOP.ONE: https://top.one/indexKryptono: https://kryptono.exchange/k/homeOEX: https://www.oex.com/indexFor more information on 1SG, keep up with its following social media:Telegram: https://t.me/SGoneReddit: https://www.reddit.com/user/1-SG/Twitter: https://twitter.com/1SG_2018Instagram: https://www.instagram.com/1sg_sg/YouTube: https://www.youtube.com/channel/UC_p_8y1geOe0lmB4F3i6Fpg



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