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Pakistanis Own $20 Billion in Crypto, Report Reveals

23/12/2021 by Idelto Editor

Pakistanis Own $20 Billion of Crypto, Report Reveals

In the absence of regulations, people in Pakistan have invested a serious amount of money in digital assets. New research claims Pakistanis keep some $20 billion in cryptocurrency, allegedly more than what their central bank has in foreign reserves.

Government Urged for Regulations as Study Shows Pakistanis Hold $20 Billion in Cryptocurrency

The Pakistani nation owns more cryptocurrency than foreign reserves, according to the Pakistan Frontier and other media outlets quoting a new report by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). The study, produced by the association’s Policy Advisory Board (PAB), has estimated that Pakistanis have held cryptocurrency worth $20 billion in the 2020-21 period.

The authors point out that the popularity of digital currencies like bitcoin has rapidly increased in the last couple of years. With a 711% market growth in 12 months, Pakistan climbed to third place in this year’s Global Crypto Adoption Index calculated by blockchain forensics firm Chainalysis. The country is behind only India and Vietnam.

However, the true total of crypto holdings may be much higher than the figure mentioned in the PAB report. Many residents of the country are buying coins via peer-to-peer deals and these investments remain largely undetected, the Business Recorder notes in an article. Cryptocurrencies are still a gray area in Pakistan as the country’s current legislation does not cover the digital assets.

During a press conference, FPCCI President Nasir Hayat Magoon urged Islamabad to introduce a government policy that would facilitate cryptocurrency transactions, remarking that neighboring India has already taken steps to implement some rules. Magoon insisted that such regulations are needed so that investors can trade their coins in the country instead of in places like Dubai.

The report recommends that Pakistan adopt a legal framework aligned with guidelines issued by the Financial Action Task Force and the International Monetary Fund. The study has been released after Pakistan’s Minister of State for Parliamentary Affairs Ali Muhammad Khan indicated in October that the government is not opposed to cryptocurrency investments in general. Pakistan’s courts have also called on the executive and legislative powers to introduce crypto regulations.

Do you expect authorities in Pakistan to soon regulate the country’s crypto space? Let us know in the comments section below.

More Regulations Proposed to ‘Streamline’ Mining Sector in Kazakhstan

28/11/2021 by Idelto Editor

Authorities need to expand the regulatory framework for cryptocurrency miners, a member of the parliament in Kazakhstan has suggested. The additional rules should streamline their activities and help correct the forming public opinion that they are responsible for the country’s electricity deficit.

Crypto Mining in Kazakhstan Needs Additional Regulations, Lawmaker Says

New regulatory requirements and criteria for the crypto mining industry must be adopted to streamline its operations while developing a comprehensive ecosystem for digital assets. That’s according to a recent statement by Dyusenbay Turganov, member of the Mazhilis, the lower house of Kazakhstan’s parliament.

Quoted by the local business news portal Inbusiness.kz, the deputy noted that mining has been a legal industrial activity since the adoption of legislative amendments in 2020. He also reiterated that starting from January 2022, miners operating in accordance with the law will pay a new type of tax to the budget.

“Nevertheless, against the backdrop of a brewing power shortage, society has an incorrect, misled opinion about digital mining as the culprit of the energy crisis and it seems that government agencies are not addressing this problem to the required extent,” Turganov elaborated. He also commented that “effective measures and their results are not visible, there is no due coordination of government bodies in this important process.”

‘Gray Miners’ Blamed for Power Shortage, Various Solutions Considered

Kazakhstan has registered a growing deficit of electrical power, exceeding 7% in the first nine months of the year, which has been largely blamed on the increasing consumption in its growing mining sector. In November, many consumers, including households, experienced blackouts, and restrictions were imposed in the south of the country. To deal with the shortages, Kazakhstan had to import electricity from neighboring Russia at a higher tariff.

Dyusenbay Turganov insists, however, that it’s uncontrolled electricity consumption by illegal mining farms that’s the main reason for the current situation. To solve the issue, the government has to step up efforts to identify so-called “gray miners” and suppress their illegal activities, he added. That would allow authorities to limit their consumption of power which is badly needed by legitimate consumers, the lawmaker stressed. Turganov has been quoted as stating:

It is needed to develop and adopt the necessary requirements and criteria for streamlining the activities of miners and the development of an integrated ecosystem for the circulation of digital assets based on the AIFC [Astana International Financial Centre] to reduce the share of the shadow economy.

The parliamentarian proposes that miners get involved in the development of renewable energy sources in Kazakhstan and help deal with imbalances in the nation’s power supply system. Authorities should also take steps to expand the country’s generating capacities, he urged.

Turganov’s suggestions come after a group of his colleagues in the Mazhilis proposed, in early October, the establishment of a state register for cryptocurrency farms operating in the country. Worried by the growing consumption of energy in the sector, the lawmakers also want to charge miners a higher price for the electricity they use to mint digital coins.

Do you think Kazakhstan will introduce additional regulatory requirements for cryptocurrency miners? Share your expectations in the comments sections below.

Eurosystem Approves New Oversight Framework Concerning Crypto Services

23/11/2021 by Idelto Editor

The monetary authority of the euro area, the Eurosystem, has introduced a new framework for overseeing electronic payments, including services related to crypto assets. The new set of rules will complement upcoming EU regulations for cryptocurrencies and stablecoins.

ECB Aims for Secure and Efficient Digital Payments Through Improved Oversight

Following public consultations on the matter, the Governing Council of the European Central Bank (ECB) has approved a new oversight framework for electronic payments. The document has been published by the Eurosystem, which consists of the ECB and the national central banks of the EU member states that have adopted the common European currency, the euro.

According to an announcement by the ECB, the single framework replaces other regulations within the Eurosystem’s existing oversight regime for payment instruments and complements its oversight mechanisms for payment systems. The bank noted that the framework has been designed to “make the current and future payments ecosystem safer and more efficient” as part of efforts to promote smooth payments on the Old Continent.

The Eurosystem’s “oversight framework for electronic payment instruments, schemes and arrangements,” referred to as “Pisa,” will be employed to oversee entities enabling the use of payment cards, credit transfers, direct debits, e-money transfers, and electronic wallets. The framework will apply to services linked to crypto assets as well.

The latter category includes businesses facilitating the acceptance of cryptocurrencies by merchants through card payments as well as digital wallet providers allowing users to send, receive, or pay with crypto assets via their products. Fabio Panetta, member of the ECB Executive Board, revealed that the Pisa framework will also cover digital payment tokens such as stablecoins. He commented:

The retail payments ecosystem is evolving fast owing to innovation and technological change. This calls for a forward-looking approach in overseeing digital payment solutions.

The European Central Bank has urged for rapid advance in terms of global oversight in the field of digital payments. “Internationally coordinated action will also have to be stepped up to cope with the challenges posed by global digital payment solutions and stablecoins,” the bank’s high-ranking representative insisted.

Businesses Have to Comply With New Oversight Rules Within a Year

Companies currently overseen by the Eurosystem are expected to comply with the recently adopted requirements by Nov. 15, 2022. Other entities that are now becoming subject to oversight will have a grace period of one year after they are notified about their updated obligations. All traditional and crypto service providers will have to file self-assessments and maintain contact with the regulatory bodies.

The Eurosystem’s new oversight framework replaces a number of other documents issued previously by the ECB. The list includes the Harmonized oversight approach and standards for payment instruments (PI standards,) Electronic money system security objectives (Emsso), Oversight framework for card payment schemes, Oversight framework for credit transfer schemes, and the Oversight framework for direct debit schemes.

The Eurosystem intends to cooperate with other authorities on the implementation of Pisa. The framework has been adopted in advance of forthcoming regulations regarding the status of cryptocurrencies and related activities within the EU such as the Markets in Crypto-Assets (Mica) proposal. The move also comes as the ECB progresses towards issuing its own digital euro currency, after launching the project’s investigation phase earlier this year.

What’s your opinion about the adoption of the new oversight framework covering crypto services in the eurozone? Tell us in the comments section below.

Austria Plans to Tax Cryptocurrencies Like Stocks, Vows Equal Treatment

12/11/2021 by Idelto Editor

As a growing number of governments are looking to tap into crypto profits, authorities in Austria have indicated their intention to tax gains from digital asset investments just like those from stocks and bonds. The move is expected to increase trust and access to cryptocurrencies.

Austria to Apply Capital Gains Tax to Bitcoin, Make Crypto More Accessible

Claiming it aims for an equal treatment of investments in cryptocurrencies like bitcoin, the government in Vienna has announced it’s considering applying the same 27.5% levy to crypto assets it currently uses to tax capital gains from traditional stocks and bonds. Austria intends to impose the measure as part of a wider tax overhaul to be carried out next year.

Тhe news comes as more and more nations around the world are exploring ways to tax incomes stemming from the expanding crypto asset market, а report by Bloomberg notes. Just recently, the total capitalization of the crypto economy exceeded $3 trillion in value, as Bitcoin.com News reported, and it’s likely to continue to grow.

In a statement issued on Tuesday, Austria’s Federal Ministry of Finance remarked that “at the moment there is still an imbalance in terms of the regulation of cryptocurrencies compared to traditional stocks and bonds.” It also insisted that the country’s new tax framework will be the first in the EU to encompass bitcoin and the like and ensure fair conditions for investors in different asset classes. Officials elaborated:

In the course of the tax reform, we will take a step towards equal treatment in order to reduce distrust and prejudice against the new technologies.

The department describes the regulatory move as an essential step in making crypto-related financial products more accessible. “We are not only pioneers in Austria, but also pioneers in Europe,” Austria’s Finance Minister Gernot Blümel has been quoted as saying.

According to the document, the tax liability is to come into force on March 1, 2022 and will only apply to cryptocurrencies purchased after Feb. 28, 2021, or “new assets.” Previously acquired digital coins, “old assets,” will not be subject to the new tax rules.

In the latter case, Austrian taxpayers should refer to the general tax regulations and report crypto gains as income from speculative transactions if their sale has taken place within a one-year period of their purchase.

What’s your opinion about the upcoming tax rules for crypto investments in Austria? Share your thoughts on the subject in the comments section below.

Iran Blockchain Association Offers Help With Crypto Regulations, Says Regulators Are Not Qualified

04/11/2021 by Idelto Editor

The leading crypto industry association in Iran has slammed authorities for their passive stance regarding crypto regulation. The government’s inaction is a source of concern, the organization said, offering its assistance to regulators whom it considers not sufficiently qualified to deal with the complex issue.

Blockchain Association Proposes Public-Private Partnership on Crypto Rules in Iran

Tehran authorities such as the Central Bank of Iran (CBI) are not capable of regulating cryptocurrencies, according to the head of the Iran Blockchain Association (IBA). Тhe country’s main organization representing members of the crypto sector called for the establishment of an “independent counsel” to take on the job. During a press conference this week, the head of the IBA, Abbas Ashtiani, elaborated:

We need a special council of representatives from state bodies and private enterprise to craft regulations for cryptocurrencies. The CBI or the Security and Exchange Organization are not qualified [enough] to set rules for cryptos given the multidimensionality of the issue.

Iran’s crypto space remains largely unregulated. In April, the central bank authorized domestic banks and money exchangers to use locally mined cryptocurrencies to pay for imports to the sanctioned nation, but authorities went after other digital coin trading and crypto payments are banned inside the country.

Cryptocurrency mining is the most regulated sector since Tehran recognized it as a legal industrial activity in 2019. Mining companies are required to obtain a license from the Ministry of Industries in order to operate in the Islamic Republic and around 50 entities have already done so, official data showed earlier this year. The ministry has reportedly stopped accepting new applications following a ban imposed by the Prosecutor General’s office.

Iran Government Has No Plan to Regulate Crypto Space, IBA Says

“The growing interest in mining and crypto trade has prompted authorities to craft a roadmap for the crypto business. But it seems that that does not go far enough,” the English-language business daily Financial Tribune noted in its report on the IBA’s proposal. The publication quotes experts who claim the issue is more complex than other regulatory challenges and that is why institutions have been reluctant to take responsibility for regulation.

Ashtiani criticized the executive power in Tehran, warning that its inaction regarding cryptocurrencies has become a source of concern. He further remarked that the former government had plans to regulate the space but they were never realized and slammed the administration of recently elected President Ebrahim Raisi for having no plan at all. The entire crypto matter is so down below the do-list that “we have still not been able to hold a meeting with the policy and decision-makers,” he revealed.

Commenting on the concerns expressed by officials regarding illegal activities related to the minting and exchange of cryptocurrencies, Ashtiani emphasized that the Iran Blockchain Association understands policymakers and assured that “their reservations can and will be addressed.” The head of the IBA also insisted:

We are ready to help set rules that can help ensure a positive impact of cryptos on the economy while minimizing criminality.

According to industry watchers, lack of sufficient knowledge and awareness is what lies behind the government’s worries about the growing popularity of crypto assets which have been attracting capital from Iran’s traditional markets. However, some officials have already opposed restrictive policies warning that they can push innovative solutions underground.

“This is what has happened in Iran’s cryptocurrency market. Our studies show that 50% of crypto activities are in the informal market. This is while supportive regulations could enhance the contribution of digital currency to the economy,” Gholamreza Marhaba, spokesman of the parliamentary Economic Commission, has been quoted as saying.

Do you think Iranian authorities will eventually adopt crypto-friendly regulations? Share your expectations in the comments section below.