Regulation Roundup: Mexico, U.K., Australia, Iran, Luxembourg, Singapore and the Philippines

Home » Regulation Roundup: Mexico, U.K., Australia, Iran, Luxembourg, Singapore and the Philippines
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As international awareness of bitcoin grows, regulators across the globe are racing to create polices for handling the virtual currency. This week, several countries hinted at coming plans for regulation of bitcoin and related cryptocurrencies. Here are the highlights of this week’s regulation news.

Mexico: Banco de México issued a warning about the risks of bitcoin investment (translation here), following in line with similar statements from other central banks in recent weeks. The statement also states that banks in the country are “not authorized to use or carry out any operations” with bitcoin, which is just unclear enough to prompt speculation about a chilling effect on banks accepting funds from bitcoin exchanges and merchants. No regulatory changes are mentioned in the release.

U.K.: In the Bank of England’s quarterly report, bitcoin and other “e-money” systems were categorized as commodities, like gold, rather than as currency. The report could be viewed as the BofE stating that virtual currencies are not their domain, much the same stance as currently taken by the Federal Reserve.

Australia: Bitcoin income and profits are taxable according to the Australian Tax Office (ATO). The ATO recently published a handful of guidelines on how businesses and individuals should report returns from bitcoin. A comprehensive set of Australian tax rules for bitcoin is expected soon.

Singapore: Virtual currency exchanges and ATMs will face new regulation from the Monetary Authority of Singapore (MAS) under existing laws for money laundering and terrorist financing risks. The regulation will apply to any business that exchanges virtual currency for real currency. The MAS notes that the requirements will be “similar to those imposed on money changers and remittance businesses who undertake cash transactions.”

Iran: Regulation of virtual currency may happen this year under the guidance of Iran’s National Center of Cyberspace (NCC). Iran’s population is overwhelmingly young and internet savvy, and have limited banking options under Sharia law, putting them in a prime demographic for bitcoin. The country’s native currency, the rial, has experienced massive inflation in the last few years, also adding to speculation that Iran could become a significant bitcoin hub in the Middle East.

Luxembourg: The tiny European nation of Luxembourg has long been a haven for international finance, and the recent, relatively friendly announcement by the Commission de Surveillance du Secteur Financier (CSSF) about virtual currencies in the country was not entirely unexpected. The statement clarified that virtual currencies are not legal tender in Luxembourg, but that those wishing to do business in them are welcome to present their business plans for CSSF authorization.

Philippines: The Bangko Sentral ng Pilipinas (BSP) joined a host of other central banks in issuing warnings about instability, possible scams and non-legal tender status of bitcoin. The statement did not offer any suggestion of new regulation.

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