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UK MP Calls for Bitcoin Payment for Taxes, Utilities

UK MP Calls for Bitcoin Payment for Taxes, Utilities

Eddie Hughes, a member of the UK parliament and outspoken promoter of blockchain and cryptocurrency, has again raised eyebrows among his more conservative peers with pro-Bitcoin declarations.

Hughes has suggested that citizens should be given the option to pay their council taxed to local authorities in cryptocurrencies such as Bitcoin or Ether. Council tax is levied monthly on households in the UK to fund local services, introduced in 1993 to replace the poll tax which caused riots in some parts of Britain due to its unpopularity. It is British householders’ largest annual payment to government apart from income taxes.

Hughes argues that if people can donate to charity using Bitcoin, they should also be able to pay bills in the same way, including monthly or quarterly utilities payments as is done in some parts of Australia after the federal government there announced that welfare payments could now be delivered over blockchain through its Centrelink system. The Australian Department of Health is now actively using blockchain for the storage of medical research records. The MP argued that this integration of cryptocurrency into such areas needs to happen in the UK:

“Only recently I met with the RNLI [Royal National Lifeboat Institution] which is now accepting charitable donations through cryptocurrency – if we can do that, what’s to stop us being able to pay council tax and other bills with Bitcoin?”

Earlier this year, Hughes released a paper on blockchain published by FREER, an initiative from the country’s Institute of Economic Affairs for promoting freedom in the economy and society. His report, Unlocking Blockchain, advocated a public-facing chief blockchain officer to oversee the UK’s blockchain strategy.

He also made recommendations in his report urging Theresa May’s government to focus more readily on blockchain technologies, citing social freedom, increasing efficiency and the rebuilding of societal trust as the main areas of its use in governance. The report also suggested that a long-term target of a 1% efficiency saving using blockchain tech should become its aim over the next year, saving up to GBP 8 billion on the 2017/18 budget.

UK MPs have become increasingly vocal on cryptocurrency and bitcoin. Another MP, Matt Hancock, delivered a speech to the Law Society earlier this year asserting that blockchain technology will have a “monumental impact” on people’s lives in the future. He spoke of “vast areas of public life” that he predicted blockchain would transform: the financial sector, government services, and laws and regulation.

MP Stephen Hammond, who joined the advisory board of cryptocurrency exchange IronX, commented:

“The only way cryptocurrencies will be trusted and become accepted in the traditional business environment is through regulation… This includes governments, policymakers, regulators and the financial services industry. Governments cannot afford to be ambiguous in their stance and need to engage with the industry.”

 

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1 in 3 Millennials View Bitcoin as Currency of Choice for Freelancers

1 in 3 Millennials View Bitcoin as Currency of Choice for Freelancers

The results of a recent survey into the preferences of American freelancers by P2P platform Humans.net has revealed that 29% of professionals in the US would be happy to receive either a full or part salary payment in cryptocurrency.

Among the 1,100 US respondents in the survey were self-employed professionals such as self-employed writers, tutors, designers, and developers, of which 4% were already in receipt of some form of salary, in either Bitcoin or Ethereum.

Some 18% of the respondents, who were chosen randomly and not pre-screened prior to selection, said that they would prefer to be paid in Bitcoin or another digital currency over a fiat salary. An additional 11% said that we would not be averse to some kind of partial payment comprising both cryptocurrency and fiat. This resulted in a 29% thumbs-up among survey respondents for some kind of crypto salary.

The age group of freelance professionals in this field is generally millennials based, such is the nature of innovation and design in fintech, attracting many college leavers. A new Clovr survey of investment potential, conducted in October, positioned high-earning millennials at the center stage when it comes to owning cryptocurrency.

These latest figures confirm the results of other surveys conducted this year, showing that it is millennials with money who appear to be taking on cryptocurrency in ever-increasing numbers. This is partly due to the lack of investment options in tradition areas. The Clovr study shows that it is those with annual incomes of between USD 75,000 and USD 99,999 that have become serious investors.

The number of those self-employed professionals looking toward a Bitcoin-based salary was illustrated by another recent survey conducted by British tech company, Sage, that highlighted the fact that across the Atlantic UK freelancers were also keen to receive some kind of crypto-fiat salary payment. The UK survey of 1,000 suggested that similar to the US survey, 31% of Brits would also go for a Bitcoin salary payment should it be offered. Darren Francis, who commissioned the survey commented:

“It’s interesting that more people were leaning towards the “all-in” option; having their sole or dominant income paid to them in cryptocurrency.”

The one emerging fact from the two surveys is that the dip in the value of Bitcoin over past weeks has done little to dampen millennials’ enthusiasm for acquiring the digital currency during this period of market instability, whether it be as part of their salary or a simple purchase. Bitcoin at time of writing is priced at USD 3,884.41 on CoinMarketCap.

 

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74% of UK Blockchain Firms Wary of GDPR

74% of UK Blockchain Firms Wary of GDPR

The General Data Protection Regulation (GDPR) passed by the European parliament earlier this year has many blockchain firms in the UK worried, according to a study conducted by Digital Catapult, an innovation agency.

The study describes how regulatory concerns are affecting many blockchain businesses (up to 74% of them) due to their conflict with many aspects of the industry. The GDPR may even pose a bigger threat to these UK companies than technical, business or even legal issues.

The EU’s GDPR was a unified regulation for the entire tech landscape addressing data issues of EU residents. It restricts companies in use of data and allows more choice to the users when it comes to viewing and using their data. The new regulation is stalling the development of many blockchain firms as permissionless Distributed Ledger Technology (DLT) inherently has some natural roadblocks when they try to come in compliance with these laws.

According to the report:

“This legislation raised concerns for companies using permissionless, public blockchains, which are open to anyone regardless of location, and where full copies of the database are replicated across all of the nodes participating in the network, making it impossible to selectively limit where the data goes.”

Perhaps the most contentious point of the whole GDPR is the Right to Erasure. The law empowers citizens to delete their personal data at will. It is naturally in conflict with the whole approach of a permissionless DLT system where information becomes immutable once it is recorded. The immutability ensures transparency for future use.

There is also the case of increased uncertainty when it comes to raising funds through legal Initial Coin Offerings (ICOs). Although the report states that the Financial Conduct Authority (FCA) has announced to regulate the ICOs, there is a delay expected in the regulations and in the absence of clear regulations, there is a lot of uncertainty regarding future ICO projects.

Despite all these challenges, the blockchain industry is growing in the country. The report states:

“…investments rose from just over USD 50 million in Q3 of 2016, to USD 150 million by Q2 of 2018 (with ICO-related investments topping USD 100 million in Q4 of 2017 and fiat investments climbing to over USD 100 million in Q2 of 2018).”

It is yet to be seen how the Brexit will affect the future of the decentralized space, both in the short and long term.

 

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G20 Calls for Universal Crypto Taxation Rules

G20 Calls for Universal Crypto Taxation Rules

Cryptocurrency and taxation have found their way among the main headlines coming out of the latest 2018 G20 meeting in Buenos Aires, alongside further commitments to fight climate change.

The G20 has now announced the desire for universal cryptocurrency taxation legislation to cover all jurisdictions within its remit with the body planning to regard itself as a “huge IT company” going forward. New laws governing the taxation of cryptocurrencies would also include further regulation as promised earlier in the year.

The current problem, which will clearly need to be overcome by some lateral and innovative thinking, is the role of international law in matters of taxation, as current ones do not allow most countries to tax companies without physical bases in that specific country. In the new declaration to commit to a cross-border crypto tax system, the G20 stated:

“We will seek solutions for the international taxation issue accompanying the digitization of the economy and will continue to collaborate.”

Previous G20 meets had already raised the topic; in its July report, the body’s Financial Stability Board (FSB) noted that previous analysis of crypto-asset markets, which included initial coin offerings (ICOs), had brought forth awareness surrounding significant challenges such as rapid market development, lack of transparency (with regard to identity and location of token issuers), as well as governing laws for white papers and gaps in data.

There continues to be some consensus from within the group representing the 20 nations about the value of innovation, although this may be limited to the respect currently being shown for the current impact of DLT and AI in the fintech space and elsewhere. The G20 has asked for further investigations to be launched in cryptocurrencies when Japan takes over the helm as chair in 2020.

Regarding cryptocurrency, the G20 repeatedly cite taking actions which are “balanced between preserving the benefits of innovation and containing various risks, especially those for consumer and investor protection and market integrity” but again AML legislation will be a focus with Japan as the next chair.

As is frequently in the case regarding the G20, it is a matter of getting all members on the same page, particularly given the current political friction between some of the member states. Europe and the UK are interested in developing such a program that they feel could combat money laundering and fraud, particularly in the case of larger organizations, but Japanese news agency Jiji has indicated that the USA and China are far more reticent to endorse such a move.

 

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UK FCA Investigates 50 Crypto Businesses for Unlicensed Operations

UK’s Financial Conduct Authority (FCA) is now investigating 50 cryptocurrency-related businesses on suspicion of operating without a license, as reported by The Telegraph.

The news comes from a Freedom of Information request by The Telegraph, with the FCA telling about number of suspects it has who might be violating financial laws and regulations. The number has doubled since the FCA last reported in May.

The investigations are increasing at a time when the UK is seriously considering a systematic approach to the local cryptocurrency industry. The news outlet referred to an accountant who was of the opinion that the current falling prices in the crypto market might be responsible for the high number of investigations. Only a week ago, FCA executive director of strategy and competition, Christopher Woolard said, “We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.”

Moore Stephens partner Andre Jacobs said, “The huge sums lost as a result of cryptocurrency prices falling this year will have triggered a rash of complaints to the FCA… Now that prices have collapsed, fraud is likely to be exposed, with greater pressure coming to bear on the FCA to ensure that this market can operate transparently and fairly.”

The FCA has already revealed its intention to be tough on the cryptocurrency market since digital money is a part of the financial market and subject to the same level of scrutiny. There is already a discussion on banning specific crypto financial instruments, such as Bitcoin futures. This brings a lot of uncertainty as that product is operating successfully in other parts of the world. With the market players not sure on what product or instrument will be banned, it is starting to shake the confidence of investors.

Some parties have spoken out against the heavy-handed approach, calling it a “blunt instrument approach”.

 

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UK’s FCA Discusses Derivatives Ban Despite 3 Million Crypto Users

The UK’s financial regulator, the Financial Conduct Authority (FCA), has cited “integrity issues” as a reason for considering placing a ban on cryptocurrency derivatives in an event in London of 20 November.

The comments were made by the FCA’s executive director of strategy and competition Christopher Woolard, addressing invited guests at the Regulation of Cryptocurrencies event in the capital.

The UK government’s Cryptoassets Task Force met for the first time on 21 May as part of the country’s plan to regulate the cryptocurrency and blockchain space and since then has been reporting back its findings regarding the regulation of cryptocurrency in the UK.

One of the functions of the task force is to examine the risks of blockchain technology and mitigate these while examining the benefits of ledger technology in financial services. The Cryptoassets Task Force comprises representatives from the UK Treasury and the Financial Conduct Authority (FCA).

The idea of a ban is a recent development only surfacing last month for the first time, among criticism that the UK had been slow in addressing the growth of cryptocurrency adoption in the UK without adequate safeguards and guiding legislation for the industry.

The focus, according to Woolard, would be on what the FCA has called “cryptocurrency contracts-for-difference (CFDs)” which would be likely to cover “options, futures and transferable securities”. He mentioned in his speech that UK’s regulators were particularly concerned “…that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues”.

In their findings, the task force had categorized CFD’s into three types, Woolard noted, constituting “exchange tokens” such as Bitcoin (BTC), security tokens and utility tokens. He also noted that in case of unauthorized use of tokens, the FCA could initiate what he termed as “one of the most comprehensive responses globally to the use of crypto assets for illicit activities”.

Despite the FCA’s comments regarding the future of derivatives at the event, many surveys continue to illustrate Britons’ growing awareness and use of cryptocurrencies with 15.8 million UK residents owning or considering Bitcoin. A July study revealed up to 3 million people have invested in Bitcoin in the country through online trading platforms.

The technology behind cryptocurrencies is burgeoning in the UK. The country is known as a driving force in blockchain research and the spread of solutions is being utilized by numerous companies, as the country becomes one of the world’s most significant and dynamic fintech hubs.

 

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Crypto Helping Homeless Through Winter on Scotland’s Streets

Scotland may not have gained its independence and its ministers continue to fight Brexit in the UK parliament amid cabinet resignations but with winter coming, at least Scotland’s homeless are getting a helping hand courtesy of cryptocurrency.

These are not good times politically for Scotland but spare a thought for those facing a bitter northern winter living on the streets of Glasgow. Cryptocurrency startup, the Scotcoin Project, clearly have, linking up with non-profit venture Social Bite to fight homelessness.

The project’s aim is to fund charity ventures and fight poverty in Scotland by generating enough funds to place the country’s homeless in rented accommodation and get them off the streets and on their feet in the cold weather. By donating GBP 5 to the homeless fund for every GBP 20 earned from its Scotcoin token sales, the project is coming just before winter starts to bite.

The winter program will be temporary as the project will looking for permanent accommodation through Scotlands’s “Housing First” program in the long term. Glasgow Housing First provides:

“… mainstream social housing and 24-hour support to individuals who are homeless, aged 18 or over and involved in drug misuse. The service places homeless individuals directly into independent tenancies in Glasgow with no requirement to progress through transitional housing programs. By sustaining a permanent tenancy in Glasgow, service users are in a better position to access community support, health care, and social benefits.”

Scotcoin almost became a victim of the country’s independence referendum on 18 September 2014, which resulted in a no-vote; a decision which is still having repercussions today, given that the country voted against Brexit by a majority in 2016 but are still bound to Westminster’s legislation.

Before the independence vote went the wrong the way for Scottish Nationalists, Scotcoin was being held up by its creators as a pro-independence cryptocurrency of Scotland, allowing the country to replace the pound if the country had voted “yes”.

Scotcoin’s leading stakeholder Temple Melville calls the project “an inspiring initiative” and indicated that the match between his company and Social Bite was a natural one as they were already operating in the same field: “One of our stated objectives is to help eradicate homelessness, and Social Bite is already well established within this area.”

Temple claims that he has received funding of a staggering USD 2 billion pledge from Amazon founder Jeff Bezos; if this figure is accurate, with the 4-1 bonus system this would make a huge impact on the homeless project to the tune of USD 50 million. Temple commented:

“We have several thousand holders of Scotcoin and have holders in more than 50 countries worldwide… On migration to our new [Counterparty] blockchain, present holders of Scotcoin will be rewarded for their support by receiving a 4-for-1 bonus, an effective increase in the value of up to 5 times.”

 

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UK Must Become Global Leader in Crypto Innovation

A UK expert has suggested that Britain must seize the opportunity and push cryptocurrency forward to become a global leader in digital assets. The comments were made by eToro UK managing director Iqbal V Gandham, who advised UK government backbencher Nicky Morgan on the Government’s Treasury Select Committee and its Digital Currencies inquiry.

Morgan served as Economic Secretary to the Treasury from October 2013 to April 2014 and as Financial Secretary to the Treasury from April to July 2014. In July 2017, Morgan was elected Chair of the Treasury Select Committee following the 2017 General Election. She later went on the become Secretary of State for Education.

Gandham claims that the UK must act now to get “ahead of the curve” to “foster innovation” in the cryptocurrency space and that as a global leader has the potential to have a major impact on the financial sector by pushing crypto innovation.

As the flagship cryptocurrency faces another unexpected drop in value with the Bitcoin market cap falling below USD 100 billion for first time since October 2017, the eToro boss suggests that a risk-based approach is needed to push mass adoption of the digital currency arguing, “If the UK is going to have any say in blockchain and crypto innovation and is going to lead the world, it needs to act in 2019“.

The latest drop in Bitcoin’s price can be laid firmly in the lap of the upcoming hard fork of Bitcoin Cash, according to CNBC’s Fast Money commentator Brian Kelly, which broke away from Bitcoin in August of 2017 in order to boost the number of transactions, suggesting, “When you do a software upgrade, everybody usually agrees. But in this particular case, everybody is not agreeing.”

A major sell-off in cryptocurrency markets on Wednesday has continued into this morning’s activity on Asian markets. The aggregate cryptocurrency market capitalization dropped by USD 15 billion over 24 hours Wednesday, according to CoinMarketCap.com.

 

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Coinjar Sees Bright Future for Stablecoins

The CEO of Australian Bitcoin Exchange Coinjar maintains that stablecoins are due to become a major investor attraction.

Asher Tan has left Melbourne-based Coinjar co-founder Ryan Zhou in charge of Australian operations and taken up residence in London’s Canary Wharf. He clearly has a good view of London’s crypto horizon from his 39th-floor workspace on the banks of the Thames. He likes what he sees.

The interesting thing right now, what’s on everyone’s lips, is what you call a stablecoin. A stablecoin is a coin pegged to a currency, usually the US dollar. It’s a craze right now,” Tan says. “It helps you transfer money around the crypto ecosystem at a stable rate. But there’s a whole lot of applications or use-cases that could come out of it.”

Stablecoins are seen by some as a safe hedge against the volatility of conventional cryptocurrencies such as Bitcoin or Ethereum. Currently, they are underutilized apart from traders using them to guard their positions during bear markets. The most topical of these were introduced after the Winklevoss twins were knocked back by the SEC after their last ETF submission was turned down, only to hit the market with the stablecoin Gemini. The brothers also have their eyes firmly set on the London market as their next potential stablecoin project.

Japanese banks favor a stablecoin method which involves simply storing an equivalent amount of dollars and offering a tokenized version of that amount. Tan suggests that until now, the custody model has certainly been easier than more complex decentralized ways of maintaining a peg but tech startups are now looking for a better more effective and innovative model.

“How do you keep a peg? These are things that usually only a central bank would have thought about five years ago, and now you’ve got tech start-ups looking at economics, and how can you peg a currency to a token. It’s fascinating,” says Tan.

Tan sees dollar digitalization by exchanges at some point in the future as a faites accompli and he is now considering how stablecoins would fit into his future plans for Coinjar, arguing that Europe is the ideal base from which to operate:

“If you go regional in Asia there’s that fragmentation – all the different regulators, the cross-border challenge. Europe is a well-regulated environment, like Australia… We don’t want to create a product and then find out that the regulator is taking an unfriendly approach.”

 

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UK Exchange Jumps the Gun On German Crypto Regulator

The German Federal Financial Supervisory Authority (BaFin) has closed down the operations of UK cryptocurrency exchange Finatex Ltd.

It appears that the UK firm was ordered to “cease cross-border proprietary trading immediately,” for slipping under Germany’s regulatory wire, having not received the necessary authorization to operate cross-border exchange transactions from BaFin. The UK company which was launched in Leeds, Yorkshire in 2016 has announced it plans to dissolve the company this week as a result.

This is not the first time that BaFin has stepped in to flex its regulatory muscles in recent months over the question of cryptocurrency exchanges’ rights to operate. The last attempt to prosecute a company trading Bitcoin operating without a license was, however, unsuccessful after The Berlin Court of Appeal overturned the case.

Inconsistencies in the way cryptocurrency firms can operate cross-border transactions in Europe have caused some concern recently, and the German case once again brought these to the notice of European financial regulators. Although individual EU countries have clearly defined rules in their own jurisdictions for the trading of Bitcoin and other digital currencies, the EU as a whole has so far failed to come together with a Europe-wide regulatory framework. The EU passed a motion in 2016 enabling taxation of cryptocurrency holdings, investments, and profits.

Now that the Berlin Court of Appeals has classified Bitcoin as a “financial instrument” it now comes under the auspices of BaFin’s financial regulatory practices. Its CEO Felix Hufeld only last month told investors that they should avoid ICOs due to scamming concerns. He argued:

“We do not want to stifle innovation, but must avert dangers at the same time. For example, it is important for us to take action against money laundering and safeguard the privacy rights of investors. In addition, there should be certain minimum standards for the underlying terms of the contract.”

Earlier this year, the German Federal Government stated that cryptocurrencies do not pose a threat to financial stability. The government stated on 12 June that the volume of cryptocurrencies, when juxtaposed to the overall size of the German financial system, is comparatively low and, therefore, simply needs careful monitoring and regulatory measures put in place in order to control the space.

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