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Uzbekistan Presents Registration Requirements for Cryptocurrency Miners

29/06/2022 by Idelto Editor

Uzbekistan Presents Registration Requirements for Cryptocurrency Miners

Authorities in Uzbekistan have drafted and put forward for public consultations a set of rules for crypto miners operating in the country. Companies that want to mint digital currencies will have to register with the government and use renewable energy.

Uzbekistan Discusses Draft Regulations for Crypto Mining Sector

Entities involved in cryptocurrency mining will need to register and renew their certificate every year, according to a draft decree by the director of Uzbekistan’s National Agency for Perspective Projects. NAPP is the country’s main crypto watchdog, which is directly subordinated to the administration of President Shavkat Mirziyoyev.

The document was recently published for public consultations that will continue until July 9 and have already attracted a number of suggestions. It introduces key definitions pertaining to the industrial activity of digital currency extraction, including for the terms crypto mining, miner, and mining equipment.

The decree states that crypto mining is subject to mandatory registration while noting it is not an activity that requires licensing. It also obliges crypto miners to utilize electricity produced by photovoltaic stations and bans them from providing power from their supply source to any third party.

Bitcoin mining farms will also be allowed to connect to the national power grid, to ensure the stable operation of their hardware, through a separate electricity meter. That applies to the peak times of consumption, between 5 p.m. and 10 p.m., and also at night, from 10 p.m. until 6 a.m., when they will pay a surcharge.

However, not having access to an operational solar power station, ready to generate electricity, will be considered a violation of the rules. The same applies to “hidden mining,” when someone else’s hardware is used without their knowledge, mining at a location different from the one specified during registration, as well as minting of “anonymous crypto assets.”

Certified miners will be required to file information on the transactions with the mined cryptocurrencies with the NAPP, complying with the deadlines and procedures established by the regulatory body. They will not pay tax on the crypto assets received as income. The minted digital coins must be sold only on crypto exchange platforms registered in the country, the decree says.

What’s your opinion about the upcoming crypto mining regulations in Uzbekistan? Let us know in the comments section below.

Filed Under: crypto, crypto miners, crypto mining, Cryptocurrencies, cryptocurrency, Electricity, English, Miners, Mining, mining farms, News Bitcoin, rates, Regulation, Regulations, requirements, rules, solar power, surcharge, tariffs, Uzbekistan

Wechat to Prohibit Accounts From Providing Some NFT and Crypto Services

22/06/2022 by Idelto Editor

Tencent’s #Wechat to ban accounts from providing transaction channels and guidance for #cryptocurrencies.

Tencent’s Wechat intends to impose penalties on public accounts facilitating secondary trading of NFTs, a press report has revealed. Accounts offering transaction channels and guidance for cryptocurrencies have also been targeted by the new rule.

Popular Chinese App to Impose Restrictions on NFT Trading

Wechat, the instant messaging, social media, and mobile payment app developed by the Chinese tech giant Tencent, is introducing a policy update that will prohibit the provision of certain services related to non-fungible tokens (NFTs) and cryptocurrencies on its platform.

Quoted by the South China Morning Post (SCMP), Tencent said it will “order accounts to rectify if they provide relevant services or content for secondary trading of digital collectibles, and limit some features or even ban the account.” The news comes after in April, Wechat acknowledged it had suspended some accounts linked to NFTs.

The policy update will also introduce penalties for accounts providing transaction channels, guidance, or issuing cryptocurrencies to Wechat users. Accounts enabling initial coin offerings (ICOs) and transactions of crypto derivatives will also be affected.

The report notes that with the move, Wechat’s management is taking into account the guidelines issued by Chinese regulators earlier this year suggesting that businesses in the industry should steer clear of the financial aspect of such digital assets.

According to Wang Yinying, a Shanghai-based lawyer specializing in blockchain and Web3-related cases, “the new rule’s emphasis is on the narrative that the secondary market for trading digital collectibles might incur speculation and instability of the financial market.”

Wechat Said to Be Acting Preemptively

The legal expert was referring to joint statement issued by the National Internet Finance Association of China, China Banking Association, and the Securities Association of China in April aimed at curbing risks associated with cryptocurrencies.

“Tencent is acting preemptively to keep itself out of trouble,” commented Bao Linghao, a senior analyst at research firm Trivium China. He pointed out that currently there are no formal regulations on NFT trading yet, but emphasized that “Chinese regulators don’t like speculation of any kind, including NFTs.”

This spring, Chinese financial institutions were asked to stay away from NFTs, and their use in a number of areas, including securities, insurance, loans, and precious metals, was banned. Experts believe the People’s Republic is likely to establish a centralized platform for secondary trading of NFTs.

Chinese digital collectibles are built on consortium blockchains, not open blockchains such as Ethereum. Additionally, the guidelines issued in April suggested that they must be bought using the Chinese yuan under real identities to avoid money laundering risks.

SCMP further quoted Wechat as saying that the accounts which display digital collectibles and primary transactions would need to have contracts with blockchain companies certified by the Cyberspace Administration of China (CAC) and refrain from supporting secondary trading.

Blockchains built by the big tech firms like Alibaba Group Holding, Tencent, Baidu, and JD.com were among the first approved by the CAC in 2019, the daily remarked, adding that since last year, consumer brands and Chinese state media have jumped on the NFT bandwagon with collectibles based on such platforms.

What future do you expect for NFTs in China and what’s your opinion about Wechat’s new restrictions? Share your thoughts on the subject in the comments section below.

Filed Under: accounts, ban, China, chinese, crypto, Cryptocurrencies, cryptocurrency, English, News Bitcoin, nft, NFTs, policy, prohibition, Regulation, Regulations, Rule, rules, Services, tencent, Token, Tokens, trading, WeChat

Kazakhstan Allows Registered Crypto Exchanges to Open Accounts at Local Banks

17/06/2022 by Idelto Editor

Kazakhstan Allows Registered Crypto Exchanges to Open Accounts at Local Banks

Government officials in Kazakhstan have approved regulations that will govern interactions between authorized coin trading platforms and traditional financial institutions. The new rules will allow registered cryptocurrency exchanges to have bank accounts in the country.

Pilot Project to Develop Kazakhstan Into Regional Crypto Hub

Regulations allowing crypto exchanges registered at the Astana International Financial Center (AIFC) to be serviced by second-tier banks in Kazakhstan have been adopted by a working group comprised of representatives of the Ministry of Digital Development, the central bank, financial regulators, as well as members of the financial and digital asset sectors, the ministry announced.

The initiative is part of a project aimed at introducing a regulatory framework that will facilitate the development of Kazakhstan’s potential as a regional crypto hub. It will be implemented as a pilot throughout 2022 with the participation of crypto trading platforms licensed by the AIFC Financial Services Authority (AFSA), a press release detailed.

Kazakhstan attracted cryptocurrency miners when China cracked down on the industry in May last year. According to Digital Development Minister Bagdat Musin, however, the crypto industry is not only mining but also includes crypto exchanges, digital wallets, and other blockchain platforms. The high-ranking government official elaborated:

It is like other industries, which can and should work for the benefit of our economy. We must make money on crypto exchange — this is the next level of development of financial technologies.

Musin insisted that the Central Asian nation needs to create a full-fledged ecosystem so that the digital assets extracted using Kazakhstan’s electricity are traded on local exchanges and the respective income remains in the country.

The Digital Ministry emphasized that the pilot project will allow the regulated trading of digital currencies, which will ensure proper protection for both retail and professional investors. If its implementation is successful, the authorities in Nur-Sultan plan to introduce amendments to the country’s legislation and the acts governing the AIFC.

The AIFC Financial Services Regulatory Committee is now the only body overseeing activities of fintech firms in Kazakhstan, AFSA Director Nurkhat Kushimov pointed out. All entities applying for a license are thoroughly checked and supervised, he stressed. “Our goal is to create an environment in which only trustworthy and stable companies that enjoy the trust of customers would operate,” the official stated.

The positive development for the local crypto industry comes after a recent statement by the National Bank of Kazakhstan which announced it’s closely following the market while noting it’s too early to talk about legalization of cryptocurrencies. At the same time, the monetary authority said it intends to capitalize on the potential for innovation that crypto technologies offer.

Do you expect Kazakhstan to adopt more crypto-friendly regulations in the future? Tell us in the comments section below.

Filed Under: accounts, AIFC, bank accounts, Banks, crypto, crypto exchanges, crypto mining, Cryptocurrencies, cryptocurrency, English, Exchanges, Kazakhstan, Miners, Mining, News Bitcoin, Regulations, rules

Lithuanian Government Approves Stricter Crypto Regulations

11/06/2022 by Idelto Editor

Lithuanian Government Approves Stricter Crypto Regulations

The government in Vilnius has approved amendments introducing more stringent regulations for the country’s growing crypto space. The legislation is aimed at managing risks associated with crypto assets and preventing Russian attempts to circumvent Western sanctions imposed over the war in Ukraine.

Lithuanian Authorities to Tighten Rules for Crypto Industry

Lithuania is preparing to revise its Law on Prevention of Money Laundering and Terrorist Financing with the stated goal of ensuring greater transparency and sustainable development for its cryptocurrency sector. This week, the government approved amendments that the small Baltic nation plans to adopt before the upcoming EU regulations.

The new provisions have been prepared by the Ministry of Finance, the Bank of Lithuania, the Financial Crime Investigation Service, the Ministry of Interior, and the Lithuanian Money Laundering Prevention Competence Center. Their main purpose is to further regulate the operations of crypto service providers.

Finance Minister Gintarė Skaistė was quoted by her department as stating that the rapid growth of the crypto market and the emergence of new products require additional attention from the responsible authorities in managing risks, especially those related to money laundering and terrorist financing threats. She elaborated:

Against this background, we are taking proactive steps to strengthen regulation at national level in preparation for subsequent decisions at EU level.

The draft law, which should be submitted to the Lithuanian parliament during the current session and enforced this year, is expected to introduce more detailed rules for customer identification and impose a ban on the opening of anonymous accounts. It will also increase the authorized capital required from service providers to €125,000.

Only permanent residents of Lithuania will be allowed to manage companies dealing with cryptocurrencies. Lithuanian regulators also want to make sure that these entities do not provide services or operate exclusively in other jurisdictions. The full list of registered operators of crypto exchange and custody platforms will be made public from Feb. 1, 2023.

Lithuania is also updating its regulations in response to the recent events in the region, in particular, the ongoing military conflict in Ukraine. “The relevance of the proposals is strengthened by today’s geopolitical environment — we must ensure that no attempt is made to circumvent Western sanctions on Russia by using crypto assets,” Minister Skaistė emphasized.

Since Estonia tightened its crypto regulations, Lithuania has seen a rapid growth in the number of crypto companies starting business in the country. Only eight such entities were established in the whole of 2020 while in 2021, 188 new firms were registered, followed by another 40 in the first months of this year. Over 250 crypto service providers are currently operating in Lithuania, the finance ministry revealed.

Do you expect the upcoming Lithuanian regulations to significantly worsen the business climate for crypto companies? Share your thoughts on the subject in the comments section below.

Filed Under: amendments, conflict, crypto, crypto assets, crypto regulations, Cryptocurrencies, cryptocurrency, draft law, English, Law, Legislation, Lithuania, Lithuanian, News Bitcoin, Regulation, Regulations, rules, Russia, Sanctions, Ukraine, War

Japan Adopts Legislation Establishing Legal Framework for Stablecoins

03/06/2022 by Idelto Editor

Japan Adopts Legislation Establishing Legal Framework for Stablecoins

The parliament of Japan has approved a draft law tailored to regulate stablecoins in the country and protect investors. The new legislation is among the first to be introduced after the recent collapse of the algorithmic stablecoin terrausd.

Law on Stablecoins Approved in Japan in Aftermath of UST Collapse

Lawmakers in Japan have passed a bill designed to determine the legal status of stablecoins. The authors of the legislation have effectively defined these cryptocurrencies as digital money, Bloomberg reported following the vote on Friday.

With the new law, Japan becomes one of the first major economies to develop such a framework after last month’s collapse of the terrausd (UST) stablecoin and its sister cryptocurrency terra (LUNA). The development caused a major market slump and loss of confidence in stablecoins.

According to the provisions approved by the legislators, stablecoins must be pegged to the Japanese yen or another legal tender and guarantee holders the right to redeem them at face value. Only licensed banks, registered money transfer agents, and trust companies will be able to issue them in Japan.

An example is a stablecoin that the Mitsubishi UFJ Trust and Banking Corp. plans to circulate. The banking unit of the Mitsubishi UFJ Financial Group Inc. revealed that its Progmat Coin will be fully backed by the yen and redeemable.

Japan’s new legislation does not address, however, existing asset-backed stablecoins from overseas issuers like tether (USDT) or algorithmic stablecoins. Japan’s digital asset exchanges do not currently list such cryptocurrencies, the report notes.

Stablecoins, of which the leading ones include USDT, Circle’s usd coin (USDC), and binance usd (BUSD), have a combined value of over $160 million. Although they are supposedly safe for holders, regulators around the world have been working to adopt regulations for this type of crypto asset due to their role for the whole crypto market, highlighted by the terrausd implosion. Ensuring investor protection is another major consideration.

The new legal framework adopted by the Japanese parliament will take effect in a year. Meanwhile, the country’s Financial Services Agency (FSA) intends to introduce regulations governing the activities of stablecoin issuers in the coming months.

Do you expect other major economies to adopt dedicated legislation for stablecoins in the near future? Tell us in the comments section below.

Filed Under: bill, collapse, draft law, English, Japan, japanese, Law, lawmakers, Legislation, News Bitcoin, parliament, Regulation, Regulations, rules, Stablecoin, Stablecoins, TerraUSD, Tether, USDT, UST

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