Do regulators hinder the development of cryptocurrencies?

Summary:

• A high-ranking representative of the Ukrainian central bank claims that unde regulatory surveillance hinders the developments of digital currencies

• Central banks remain cautious in issuing their own digital currencies, the BIS says

• The Venezuela’s government requires taxpayers with crypto operations to pay their taxes in cryptocurrencies

The start of 2019 in the cryptocurrency market has been quite benign so far with major currencies sticking to their levels seen at the end of the past year. Nonetheless, more attention deserves Litecoin which broke through its short-term resistance earlier this week. We are presenting a technical view regarding this cryptocurrency later in this article. Let’s begin today’s newsflow with the interesting story from Ukraine where a high-ranking representative of the country’s central bank, Mikhail Vidyakin, said that “an excessive number of regulatory agencies are interfering with the prospects of successful development of cryptocurrencies in Ukraine.” He also added that “the main issues around the legalization of digital assets are institutional in nature.” Instead, he favours regulations that give the cryptocurrency market a chance to develop.

Litecoin smashed its short-term resistance earlier this week and it could be ready to experience more gains in the days ahead. The major hurdle bulls may face is placed in the vicinity of $48 from where a profit-taking wave may arise. Source: xStation5

According the Bank of International Settlements (BIS) most central banks are proceeding cautiously on issuing their own digital currencies, it said in a report released on Tuesday. The institution surveyed 63 of its members (central banks) on central bank digital currencies (CDBC). The results suggest that as much as 70% of them were not involved in work to issue their own CBDCs. On the other hand, five central banks, including those from Sweden, Uruguay and South Africa, have initiated pilot projects. It is worth noting that compared to the same survey carried out in 2017 we got a rise in a number of central banks which decided to start working on CBDCs.

A number of central banks being engaged in CBDC work increased in 2018 compared to 2017. Source: BIS

Finally let’s take a look at Venezuela where the government made quite a contentious announcement. It published a decree requiring taxpayers with crypto operations in the country to pay their taxes in cryptocurrencies. What’s more, people who carried out operations in foreign currencies are required to pay their taxes in these currencies, not in bolivars. The decree also states that “the Venezuelan people are currently facing a fierce war waged by internal and external factors that pursue the deterioration of the economy, which is why it is necessary to adopt sufficient measures to ensure the strengthening of the current fiscal regime.” The decree allows two exemptions: transactions of securities traded on a stock exchange and the export of goods and services carried out by public bodies or entities.