Eastern Europe’s Guide to Cryptocurrency Regulations And Development
Launching their first ever Cryptocurrency Investment Bank planning to carry ICO’s Saturday June 30, Russia is scheduled to move forward with regulatory laws later this week concerning both blockchain and crypto related processes.
The crypto trend is picking up speed across Eastern Europe with many countries pushing to implement the system and support cryptocurrency industry. In Poland, a company called PBS is putting pressure on the government to facilitate the inclusion of crypto and blockchain platforms in existing financial entities. The group claims that by denying this it directly hinders the digital currency industry. Below is a guide to understanding the current status of crypto regulation across Eastern European regions.
In regards to Russia’s political position on cryptocurrencies such as Bitcoin, it had inconsistent support on the topic. Initially efforts to ban the currency from the country had been put in place however this was later retracted and instead, was confirmed by President Putin that plans to initiate cryptocurrency regulations had become official. Since, the government introduced a recently approved bill set to be enforced by July 1, 2018. The bill centers around detering risks associated with crypto transactions particularly focusing on financial crime, fraud, and the sponsorship of terrorism.
Russia’s top PSP, Qiwi allegedly started a crypto based investment bank named HASH via their subsidiary, Qiwi Blockchain Technologies. This bank is aimed at providing a platform for Initial Coin Offerings. QBT’s CFO declared that the company is already actively working with ten of these funds, and plans to provide cryptocurrency trading within a year.
Once regulatory standards are in place, the country will recognize tokens and digital assets as legal property. In addition, limits are to due to be established for local miners and the quantity of electricity used for mining operations.
Unlike cryptos, the Russian government indicated strong support towards blockchain technology. According to PM Shuvalov’s statements at the SPIEF conference in 2017, blockchain and its related network is their primary goal.
Before the year’s end, Russia had completed their first official blockchain implementation geared at the storing and transfer of documentation.The state-run bank, Sberbank, officially carried out Russia’s initial bond transaction utilizing blockchain technology.
Unlike Russia, Poland has already recognized the mining and trade of cryptos but not without a growing air of public skepticism as a result of recent anti-digital currency campaigns funded by the state.
Initially, when first delving into the crypto space, the Ministry of Finance acknowledged that as the currency has not officially become illegal, its associated activities are therefore permitted. However Bitcoin in itself was not a legally recognized currency.
After much debate, 2016 brought to light a more tolerant perspective, officiating trading of digital currency as a legal economic transaction. In recent times, a shift in this perspective has been facilitated by numerous social media initiatives funded by several national banks. This sparked an aggressive response from the PBA declaring that banks were sabotaging the industry, denying service to crypto-based establishments, and shutting down over twenty accounts linked to crypto-associated businesses.
On the flipside, the country has appeared to be very supportive of blockchain. This January, the PATB announced that members of their staff are taking on the concept of a nationwide cryptocurrency, called Złoty, centered around blockchain technology.
During periods of unrest amongst residents of Ukraine, Michael Chobanian, a local businessman, started the nation’s first agency for exchanging hryvnia — a national digital currency — into Bitcoin.
He stated that the move was a consequence of the lack of laws and regulations in the nation. He believes that the former president was interested in the crypto market, but abused his position and monopolized crypto markets to prevent others from getting involved.
Chobanian thinks that without him, the Ukraine was able to push past and become a haven when it comes to digital currencies.
Now as the nation has predominantly settled down, it is being reported that Ukraine is aiming at creating new laws and legislations surrounding cryptocurrencies. In May, parliament member Alexei Mushak posted a version of a proposed regulation to Facebook, and urged crypto aficionados to give their feedback.
The government stated that digital currencies allow illegal activities to thrive, including the sale of weapons. Recent raids in Kiev uncovered a mining operation with ties to separatists.
While the NBU stated that it pondered over the possibility national digital currency not based in blockchain tech, but it was still a matter of discussion.
Bitfury Group had once collaborated with officials to provide solutions using blockchain, and the Ukraine once hosted a state auction using the tech- a world first.
Although Estonia prioritizes crypto tech, its approach is less modernized than its Eastern Europe counterparts. The nation’s highest court once pushed forward a ruling that the mediation of crypto needs to be supervised for money laundering. In addition, the EFSA debated tokens and how they could be referred to as securities.
Estonia initiated a large digitization endeavour, and in 2014, a new bar was passed. The government launched an e-residency program allowing individuals from all over the globe to apply online to become a citizen of the nation virtually. In turn, they can access the nation’s economy via online platforms.
By adopting blockchain, Estonia launched a voting frankework online for their national election. The nation also started several public projects running on blockchain, such as health services.
The Czech Republic has a more liberal paradigm through which they see crypto tech. Last year, the national bank stated that they do not believe cryptocurrencies are a threat to traditional banking.
Bitcoin was later restricted by the Ministry of Finance via laws against money laundering. Laws now force exchanges to make customers to reveal their personal information rather than stay anonymous with false names.
Croatia allows for the trade of crypto, although it is not considered legal tender. There is a tax on digital currencies, but no actual directions regarding how to pay it. Regardless, the crypto scene seems to be changing as organizations, like UBIK, are implemented.
These organizations aim to build a community, educate citizens, and help develop laws in the nation regarding cryptocurrency.
Nikola Škorić believes that companies with a basis in blockchain tech that Zagreb Stock Exchange is involved with have to use legal services in Estonia rather than Croatia because of their heightened regulations.
Bulgaria isn’t clear regarding their stance on crypto. The BNRA previously stated that profit from digital currency trading has to be declared and taxed at 10 percent.
Earlier this year, police in Bulgaria raided OneCoin, an untrustworthy altcoin promoting itself by being a centralized framework protecting its users whilst ensuring AML compliance. This means it is cannot be considered a cryptocurrency since it isn’t decentralized, doesn’t function on software that is open-sourced, and maintains no public ledger.
Moldova’s national bank consistently warns citizens of risks when dealing with cryptocurrency, such as scams, hacking attempts, volatility of the currency and possibility of large losses.
On the other hand, the UND aims to launch projects based in blockchain to produce power for Moldova's technical college using renewable energy that is funded by the currencies.
People will be allowed to purchase solar cells with SolarCoin, and profit by renting it out.
Moldova planned on battle child trafficking, which is a huge issue for the country, with blockchain tech.