With no global consensus on regulation, and even more limitless options for currency type, it’s difficult to get a handle on the scope and future of cryptocurrency. But there are trends and factors that can be observed, and hopefully provide some opportunities to predict the future of certain coins.
While the U.S. and Japan are far and away the biggest buyers in the crypto market, plenty of other countries want a piece of this $200 billion pie (the total global value of crypto in September 2018, down from $795 billion in early January).
A TradingView analysis examined the countries that are most actively looking at cryptocurrency charts. Some have a robust, regulated crypto economy — and others don’t even allow crypto trading. What does this mean for the future?
The bitcoin boom is alive and well in South Korea, home to one of the world’s biggest crypto exchanges, Bithumb. An estimated 31 percent of salaried workers had invested in crypto by the end of 2017, and the Korean won remains the third-most traded currency for bitcoin, behind U.S. dollars and Japanese yen.
The island nation has even earned its own crypto nickname. In January, South Korea’s bitcoin price was 50 percent higher than the global average, leading to a phenomenon known as the Kimchi Premium. Similar spikes have emerged throughout the year.
In June, South Korea’s Supreme Court ruled that bitcoin is a legally recognizable asset, creating a new sense of stability for cryptocurrency traders. The country also is taking steps toward security and regulation. In July, new anti-money laundering laws for cryptocurrency were introduced. Banks now are required to expand due diligence procedures for crypto exchanges to non-clients and to immediately halt suspicious crypto transactions, among other regulations.
As has been the topic of much discussion in the United States, such regulation and security is key to crypto’s future success, and, as of present, South Korea is ahead of the curve.
In some ways, Ukraine is the diametric opposite of South Korea when it comes to crypto — Politico has gone so far as to call it the “Wild East” of cryptocurrencies. The Eastern European nation has no regulations around crypto mining, which some outlets estimate at $100 million in annual production. Ukrainian crypto fans are even pushing to erect a statue of alleged Bitcoin creator Satoshi Nakamoto.
But that lack of regulation has encouraged chaos and lawlessness around cryptocurrency, as the Politico piece details, including government raids, kidnapping and the financing of terrorism. “Currency that is officially banned in Ukraine has been used to buy military equipment, weapons and ammunition for the illegal armed groups,” Ukraine’s Deputy Prosecutor General Anatoliy Matios said.
With most government eyes in Ukraine steadily fixed on its ongoing war with Russia, time will tell when, and how, regulation around cryptocurrency becomes a priority.
The Netherlands occupy somewhat of a crypto middle ground between the two previously mentioned countries. While the Dutch central bank says it does not consider cryptocurrency to be real money, it also has no plans to ban its use. Research also finds that more than 500,000 Dutch households now some form of crypto.
Amsterdam was also the first European city to install a Bitcoin ATM; the nation now boasts 23 such machines. And in 2014, the city created a Bitcoin City Initiative, designed to encourage vendors to accept the cryptocurrency. Bitcoin enthusiasts can gather at the city’s Bitcoin Embassy, host to Bitcoin meetups, a Bitcoin cafe and a Bitcoin shop.
In July, the State Securities Commission of Vietnam (SSC), the country’s stock market watchdog, reportedly forbade industry firms from engaging in any activities related to the currency.
This news came in the wake of in the wake of two fraudulent coin offerings that bilked Vietnamese investors out of an unheard-of $660 million. And cryptocurrency wasn’t even legal for payments within Vietnam at this point; at the start of 2018, the country banned its usage and imposed a $9,000 fine for violators.
But it seems that no matter the government’s interest in blocking crypto usage in Vietnam, its citizens haven’t been deterred. Will this lead to smarter regulation in the future?
Japan is a virtual currency powerhouse, and no article would be complete without exploring its dominance. As of September, Japanese yen had surpassed U.S. dollars as the most traded currency for bitcoin, at 45 percent of the bitcoin market.
Japan also is the global leader in crypto regulation. Following the 2014 Mt. Gox hack, the Japanese government threw itself into devising laws to regulate the industry, and in 2017 the Payment Services Act went into effect.
Among its most important tenets: A legal definition of cryptocurrency, registration requirements and internal security checks.
The successes and failures of the Payment Services Act will be an important guidepost as the U.S. considers its own regulations, something financial leaders like Nasdaq CEO Adena Friedman and Commodity Futures Trading Commissioner Brian Quintenz are pushing for, with the goal of legitimizing the marketplace.
Andrew Kirillov is the CFO of TradingView.
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The preceding article is from one of our external contributors.
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