Europe: the Fun New Blockchain Playground Welcomes Players Big and Small
As state-of-the-art digital and crypto currencies continue their march across the world, many national governments are looking for ways to understand and take advantage of the new technology. Fintech innovations are promising serious advantages, but they may also threaten the status quo, competing with, and potentially replacing fiat money.
This is putting the world’s central banks in a difficult position of having to create radically new financial and regulatory infrastructures that could give a strong momentum and stimulate economic competition, while also not putting their national currencies at too great of a risk. Many regulators are seeking to establish the perfect balance in their respective countries, and it’s a painstaking task. The reactions vary; some countries, like China and South Korea, opted to completely ban Initial Coin Offerings, while others are exploring the new opportunities with great curiosity and even, in some cases, full acceptance.
Notably, among the world regions treating the new digital and cryptocurrencies most favorably is good old Europe. Having been badly bruised in the 2008 financial crisis, it came out more determined than ever to make a rapid comeback. To this end, its regulators quickly got down to work, developing laws that would allow the young fintech industry to evolve and bring its economic advantages to the region. The European Union leaders realized that blockchain perfectly matches their ideals of transparency of information and market data sharing, which makes the new sector particularly welcome. The European Parliament has already instructed its executive arm to build its own blockchain, and now individual countries are developing their own approaches to creating an infrastructure that will encourage new investments.
Among the early adopters and supporters are Gibraltar, Germany, Switzerland, and Spain. It has recently been announced that the Spanish legislators are working on creating the Europe’s most secure infrastructure for blockchain investment, developing legislation which will offer various tax incentives to entice blockchain companies onto the local market. Speaking to Bloomberg, Spanish lawmaker Teodoro Garcia Egae said that the government is specifically looking to attract blockchain companies focused on projects in finance, education, and health. He also indicated that there are special regulations in the works that would make Spain an attractive destination for startups and mature companies to hold ICOs in its jurisdiction.
Like some other European countries, Switzerland is choosing not to specifically regulate digital and crypto currencies for the time being. Its government believes in the cautiously optimistic and welcoming approach, which resulted in the emergence of a thriving blockchain environment, led by forward-thinking institutions like the Crypto Valley Association – an independent non-profit organization established with the support of the Swiss government to build the world’s leading blockchain and cryptographic technologies ecosystem. The Association has already been joined by such international giants as KPMG, PwC, UBS, and Thomson Reuters.
In the words of one of the newest members of the Crypto Valley Association Yury Morozov, the founder and CEO of BubbleTone, the first blockchain for the telecom industry:
“We believe that the Association is doing an extremely important job of helping companies incorporate the new blockchain technologies into the Swiss economy and infrastructure, and we want to lend our expertise in blockchain generally, and in blockchain for telecom specifically, to help transition the industry to the finest solutions in existence.”
That being said, not everyone is ready to jump on the European bandwagon just yet. When choosing where to register their company, the specialists and advisors at Native Video Box (NVB) looked at a number of options. The NVB team has extensive experience working in Russia and the US, but these were the first to be crossed off the list. “All signs point toward the impending full regulation of crypto in the US,” says NVB Founder and CEO Alexander Shishow. “There have already been instances when the tokens of multimillion-dollar ICOs have been deemed a security, and the ICOs have been shut down by the courts.”
Russia, on the contrary, is still a long way from forming anything resembling a coherent legislative framework in this area. When considering Europe, the project looked at both the UK and Switzerland. They were warned off the UK by rumblings about removing the anonymity of cryptocurrency traders. Switzerland warranted a closer look but was ultimately also rejected. The reason; the General Data Protection Regulation (GDPR).
“We believe in the common sense of the Swiss, but this regulation is a time bomb,” states Shishow. “In the end we decided in favor of the old standby, an offshore. We chose the Seychelles, with its favorable business climate. We can always relocate from the Seychelles at a later date, but the other way around might be tricky,” Shishow concluded.
One of blockchain’s most avid and influential supporters Keith Teare, a founder and leading figure in over a dozen successful Silicon Valley and international projects, including TechCrunch, and an advisor to several past and present ICOs, including the recently completed Crypterium token sale, is extremely enthusiastic about Switzerland’s efforts, however:
“The clear, transparent, and reliable infrastructure for Initial Coin Offering is very much in need. ICOs are a great way for new and existing businesses to bring their innovative products and services to the market. I applaud the government of Switzerland for making this important tool easily accessible to high-tech businesses.”
Teare’s sentiments are echoed by his industry peer Nick Evdokimov, advisor and co-founder of many successful blockchain projects, including ICOBox, the world’s leading provider of SaaS ICO solutions, who said, “Such government-sponsored initiatives are invaluable: they are one of the most powerful ways for a country to gain an unquestionable competitive advantage on the global marketplace – and do it quickly and without spending too much money. This is what I call a win-win for both the country and the blockchain community.”
With the cryptocurrency market capitalization expected to reach hundreds of billions in the very near future, the regulators across the world are signaling that they are interested in the new industry, even if somewhat guardedly. But do they really have much choice? As a distributed ledger, blockchain is everywhere and nowhere, so somewhat elusive. And as any wise man knows, if you can’t beat them, join them – and it is good to see this reasonable attitude taking hold.
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