A quick a dirty review of how major governments are treating cryptocurrencies. What's their stance toward bitcoin and other cryptos? Do they plan on having their own central-bank backed token? What are the major obstacles to overcome?

1. How Governments See
Cryptocurrencies
Amilcar Chavarria
www.fintechportfolio.com
amilcar@fintechportfolio.com
@bamilcar

3. 2016 ICO Funding Volume

4. 2017 ICO Funding Volume

5. 2018 ICO Funding Volume

8. Looks great. But...

10. “It’s worse than tulip bulbs. It won’t
end well. Someone is going to get
killed,” Dimon said in remarks at a
Barclays banking conference
reported by CNBC.
Oh, and that wasn’t all. Dimon also
reportedly proclaimed bitcoin to be
a “fraud” and that “it will blow up.”
He also noted this:
Jamie Dimon Beats Up on Bitcoin, Says
It's 'a Fraud'

11. “The blockchain is real,” Dimon
said. “You can have cryptodollars
in yen and stuff like that. ICOs
[initial coin offerings], you got to
look at every one individually.
The bitcoin was always to me
what governments are going to
feel about bitcoin when it gets
really big. And I just have a
different opinion than other
people.”
BITCOIN BACKPEDAL: JPMORGAN CHASE CEO
JAMIE DIMON REGRETS CALLING
CRYPTOCURRENCY A FRAUD

13. “In terms of cryptocurrencies, generally, I can say almost with certainty that
they will come to a bad ending,” Buffett said on CNBC,

17. How do governments see crypto
including their own “central-backed”
tokens?

18. Regulatory
Action
recent examples
Venezuela jails BTC miners
SEC -- the DAO is in fact a security (JUL)
China’s ICO Ban
Shutdown of Korean Exchanges
SEC Shutdowns
● Jan 30th Arise Bank ($600mm)
● Dec PlexCoin ($15mm)
● Dec Munchee (pre-raise)
● Aug
○ CIAO Group
○ First Bitcoin Capital Corp

20. China
Cracking Down
● Central Bank has “FULL”
control over ICOs
● Tougher Actions
○ Banned ICOs last year
○ Cracking down in trading and
mining
● 2014 - Digital Fiat Money
● Ripe conditions for tech
adoption
● Seeks payment efficiency and
control over currencies

21. Japan
Cash still King
● Authorities may be forced to
take action on the sector,
however, after nearly $500
million in digital tokens was
stolen from the Coincheck Inc
● 300,000+ stores accept Bitcoin
but they know BTC is primarily
traded for speculation
● BOJ no plan to issue a digital
currency
● Doing so means opening their
“kimono” and showing their
accounts to the public

22. South Korea
On high alert. Watching closely
● Creating legislations to crack
down on exchanges
● Setting up special team to
“probe” crypto trading
● Starting “real name” trading
accounts in Jan
● BOK seeking more research
and monitoring
● Worried “crypto” adoption might
corrupt their youth

23. India
Simply No
● Crypto is not allowed on the
basis of prior history of
“crime-related” activity
(laundering and terrorist
financing)
● Crypto trading is a violation of
FX trading rules
● Studying whether digital
currencies backed by global
central banks can be used as
legal tender.

24. Russia
Pyramid Schemes
● Central bank has expressed
concerns about digital
currencies calling them
pyramid schemes that they
wont legalize
● Opposed to “private money” in
physical or virtual form
● Blocked citizens from
exchanges
● Delaying official regulation of
these instruments
● See -0- demand for
cryptorubble with concerns it
might bless illegal activity

25. Australia
Speculation >> Payments
● Criticized cryptos as an asset
that is likely to appeal more to
criminals than consumers
● It’s more about speculation
than about payments
● No plans to issue it’s own
digital coin
● They see electronic bank notes
to be used in country’s peer
group

26. Singapore
Investor protection is top of mind
● Dec: “is concerned that
members of the public may be
attracted to invest” due to price
volatility
● Very concerned with investor
protection issuing statements
about “loss of principal”
● Asks citizens to report fraud
and suspicious crypto activity
to the police

27. United States
Concerned & Cracking Down
● The Fed Reserve isn’t psyched
about issuing a central-bank
issued crypto citing
“meaningful” challenges
● Concerned about privacy
● Dec: Worth thinking about a
policy to regulate BTC
● Trading volume is still “small”
but total crypto volume could
impact monetary policy in the
future
● SEC has created an assembly
line to look into ICOs

28. Brasil
Embrace innovation
● Crypto poses no risk to the
financial system in Brasil
● Nov - the central bank pledged
“to support financial innovation,
including new technologies that
make the financial system safer
and more efficient.”

29. Canada
Crypto isn’t money
● Nov- central bank’s deputy
governor said that crypto
currencies arent true forms of
money
● These are
○ Assets
○ Securities
● Vouches for Blockchain and
DLT as a means to gain
efficiency
● Exploring conditions upon
which it makes sense to have
their BOC-backed crypto for
retail

30. United Kingdom
Long way away from its own
crypto
● Central bank started FinTech
accelerator in 2016
● Bank of England Governor
Mark Carney has cited
cryptocurrencies as part of a
potential “revolution” in finance
● Supports Blockchain as means
to strengthen their defenses
against cyber-attacks and
overhaul payments
● Long way away from a digital
sterling

31. Germany
Thread with caution
● Cash is king here too.
● Wary of Bitcoin and the onset
of cryptocurrencies
● Acknowledges speculative
nature
● Staying on the sidelines in
terms of involvement
● Sep: shift into blockchain
deposits clearly disrupts
banking business models
● Lots of tech R&D for payments

32. Netherlands
The dare devil
● Two years ago the central bank
created its own cryptocurrency
called DNBcoin.
● DNBcoin is nternal use only
pilot to understand the
mechanics
● Sees promise in blockchain in
settlement of complex financial
transactions

33. France
All private currencies have
ended badly
● Jun - major investor warnings
from BOF re: BTC as there’s
no physical backing behind it
● Historical Lesson -- ALL private
currencies have ended badly
● Use at your own risk
● Concerned about the “dark
side” of bitcoin transactions

34. Scandinavia
Exploring Options
● The world’s oldest central bank
in Sweden is exploring options
for digital cash
● E-krona pilot with account
balances held on an app, card
or central database
● Digital currency poses no major
obstacles to monetary policy
● Denmark is concerned that
access to the central banking
system could enable “runs on
the bank” and dialing back
● Norway exploring individual
accounts at the central bank,
plastic cards or an app

35. What are the challenges?

36. Regulatory Challenges
Cryptocurrencies represent a loss of revenue and oversight and a huge fraud risk
1) Financial Securities
a) Investor Protection (e.g. limits, holding period, accreditation)
b) Registration
c) Compliance → KYC, AML, Anti-Terrorism Finance
2) Licensing
a) Securities Licensing (exempt offerings from registration, investment adviser)
b) Exchanges
c) Money Transmission
3) Taxation
a) IRS has rules but what about other countries?
4) Reporting
a) Fincen

37. One takeaway!