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US and UK: It’s Time To Get Ready for a Struggle for The Digital Market

19 September 2018 23:12, UTC   |    4074
US and UK: It’s Time To Get Ready for a Struggle for The Digital Market
By Oleg Koldayev, Anna Zhygalina

Following France, Great Britain and the United States of America have become aware of the regulation of the virtual assets turnover. On the same day, on the opposite shores of the Atlantic Ocean, two documents from two departments with a very similar argumentation appeared. It is hard to believe in such an accident, especially when the rates in the geopolitical game for future markets are rising.

In its report, the Treasury Special Committee of Great Britain called the digital coin market "the Wild West industry". Claims to virtual assets are the same as those repeatedly announced by the authorities: high volatility, poor consumer protection, the possibility of hacking and theft, as well as money laundering and terrorist financing.

Today, in the world there are no tokens “working properly”, the document writes. And as an example, officials mention the fact that at the moment, there are at least 1500 digital currencies on the market trading on 190 exchanges. Few of them have real value. Most of them are, probably, just witty means for cheating citizens. "Investors have very few tools to protect against a variety of risks," the report said. "In particular, there is no formal mechanism for the return and compensation of the lost funds and assets."

Moreover, the organization asks the legislators to accept digital coins as “assets” at last so that the market could fall under the jurisdiction of the Financial Conduct Authority (FCA). The competent persons of the Treasury accepted ICO just as it is, as “a problem for the financial inspectors” only.

The representative of the Committee, Nicky MORGAN, in one of her interviews emphasized that the uncertainty of the governments and regulators concerning the development and adopting of a normative framework, while the consumers suffer, is a weak position.

The British self-regulating independent association CryptoUK agreed, surprisingly.

"Self-regulation was always seen as the first step - now it is for the parliament and the government to decide," Iqbal GANDHAM, the Chairman of the Association said. – “Supervision of regulators is necessary for security, protection from fraud, and ensuring transparency in this fast-growing industry. So, it's nice to see that the Committee supported our idea of how this can be implemented by proposing to bring this sphere into the FCA's area of responsibility."

In its turn, the Office of the Attorney General of the State of New York published its report, which describes the results of monitoring the exchanges where digital coins are presented. The inspection was initiated by the former Head of the Cabinet, Eric SCHNEIDERMAN, who resigned several months later because of a sexual scandal. But this decision remained in force.

As a result, the servants of Themis came to the conclusion that the risk of manipulating and using insider information for deceptive purposes was high on the New York digital trading platforms. In addition, the market has a great threat of conflict of interest, violations of consumer rights, and thefts.

"The industry has not yet realized all the opportunities of the market control, similar to traditional exchanges," the report says. In addition, generally accepted audit measures do not work in the digital economy, which affects the confidence limit of clients and regulators. The Attorney Office also referred the use of bot trades on some exchanges to negative factors.

These two documents are interesting not so much in content, although the information put in writing is true, as in the time of appearance and context.

Just last week, France joined the market of digital assets loudly, having adopted a pretty liberal legislation regulating the turnover of virtual assets. No one expected this from the Fifth Republic, since its legal system, unlike the economy, is characterized by certain conservatism. And also, shortly before the appearance of the regulatory document, the French authorities reduced the tax on transactions with digital coins in half - to 19%.

Seemingly, the president and the government of the French Republic acknowledged the elephant in the room: the hesitating West is already losing the struggle for digital markets and digital capital to the brave and aggressive East. Japan, South Korea, Thailand, and the Philippines already play a significant role in the circulation of virtual money. Next in turn are: China, which is cleaning its domestic market, but does not intend to leave the global one; India, which still tends to adopt a new economic reality, and Russia, which is also on the verge of adopting a legislative framework for digital coins. This is a huge power.

"Let's remember the crisis of 2008, which took a heavy toll on us. People lost their jobs, economic development stalled. But only India and China continued to grow,” Amardeep SINGH, the professor and the founder of the DLT-company based on AI technologies said in an exclusive comment to Bitnewstoday.com. - And Russia was fine due to the flexibility of its economic policy. Each of these countries focused on what is basic for its economy. And what do we see now? China is the absolute world leader in the industrial production of consumer goods, Russia holds the leading position in the production of arms, and India leads in terms of using human capital. And I see that these countries want to unite. China, India, and Russia are joining a new union, the goal of which will be the capturing of a new digital world space. America and its friends have few chances to resist such a triumvirate, which has money, technologies, and human resources."

The expert mentioned the crisis of 2008 not without reason. A new global cataclysm is growing stronger every year, and one of its main reasons may be a conflict between two economic systems against the backdrop of the crisis of traditional financial instruments credibility.

Of course, one can fantasize and assume that the British and American reports came out at the same time because someone agreed on the publication date. Most likely, it is not so. But their appearance is by no means accidental. This is a signal to the political authorities from the economy that, at last, it is necessary to hasten to regulate this segment of the market not only because the consumers of financial services suffer (although, there is that, too), but also because the one who seizes it today will dominate world politics and economy tomorrow.





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