European Crypto Currency Legalization

2019 is a promising year for crypto currency in terms of its legal recognition at the governmental level.

Switzerland has become one of the leading crypto currency hubs and a leader in the field of legal regulation of crypto currencies and blockchain industry. In January 2017 in Zug, with the support of local authorities, the Crypto Valley Association was established for those people who use cryptography and blockchain technologies. In December 2018, the Swiss government published legal norms for regulation of the blockchain industry and required amendments to the existing financial legislation. Today, one fifth of the digital assets market belongs to 50 largest representatives of crypto business registered in Switzerland and Liechtenstein.

Italy is another active participant in the process of legal recognition of digital technologies. On January 29, 2019, the Italian Senate Committee on Constitutional Cases and Public Works approved the text of the Simplification Decree Decreto Semplificazioni. It is the first attempt to regulate the blockchain industry by the Italian government. Parliament members have to adopt the relevant law by February 12, 2019. This document will rescind the previously introduced taxes on digital services. From 2020, the Extraordinary Commissioner’s functions relating to the realization of digital agenda will be assigned to the Prime Minister of Italy or their representative who can involve experts in the field of high technologies. The Decree also defines basic terminology, which ensures the review of legal documents during the registration process: “Distributed Ledger Technology” (DLT), “Smart Contract” and “Digital Record”.

Legalization of high technologies at the governmental level shows a gradual transition of the global financial market to the digital business model. Following European leaders, Ukraine also started actively taking part in developing the legal status of digital currencies and establishing rules for regulating the financial and technological industries.

Simcord company successfully cooperates with the National Academy of Legal Sciences of Ukraine on the issues relating to legal harmonization and obtainment of a scientific and legal expert opinion “Legal Basis of the Bitbon System”. It was to be published at the end of 2018, but the publication was postponed until the first quarter of 2019 in order to ensure its relevance and consistency with legal frameworks of other countries.

In addition, in order to clarify concepts and distinguish meanings as well as to consistently interpret already existing terms, such as crypto currency, token and digital asset, Simcord is developing a definition of digital asset as part of the above-mentioned cooperation with the National Academy of Legal Sciences of Ukraine. The Company’s plans include providing the global community with a unified test, which allows assessing the conformity of any crypto instrument with the properties of digital assets.

Harmonization of concepts and legal regulation of the crypto industry confirm the attractiveness of digital infrastructure and the need to establish favorable legal environment for its development in the European and global financial ecosystems.