Comic Chat | What is the attitude of various governments towards blockchain?

We are here again to talk about blockchain in comics.

As usual, let’s start with a review. This is the fourth series, so let’s review the topics we’ve discussed before.

Series 1: Comics on blockchain: It will be easy to prove "my mother is my mother" in the future

Series 2: Let’s talk about comics | How will blockchain technology change our lives?

Series 3: Let’s talk about comics | Who is the man behind the blockchain?

This series mainly discusses the changes in the attitudes of mainstream governments towards Bitcoin and even its underlying technology, blockchain, since the birth of Bitcoin.

Bitcoin's price fluctuations have been controversial along the way, from being worthless at the beginning to 8,000 yuan at its peak.

Some countries view Bitcoin as a scourge and ban it from the door; some countries welcome it; and the rest mostly take a wait-and-see attitude.

To understand the reason, we need to start from Bitcoin itself. Its biggest feature is decentralization, which means that it cannot be controlled by a certain country or group. This is absolutely unacceptable for some countries with strong national currencies.

Although some countries have always been pessimistic about Bitcoin, their positions on the blockchain technology used by Bitcoin are very different. Next, we will look at the two stages of the Bitcoin era and the post-Bitcoin era respectively.

The Bitcoin Era: Walking on the Edge of the Law

1. Supporting Countries

1. Germany: The first country in the world to recognize the legal status of Bitcoin

In August 2013, Germany announced that it recognized the legal status of Bitcoin and incorporated it into the national regulatory system. Germany is the first country in the world to recognize the legal status of Bitcoin.

The German government stated that Bitcoin can be used as private currency and monetary unit. Personal use of Bitcoin is tax-free within one year, but commercial use is subject to tax.

2. United States: Classifying Bitcoin as a “commodity”

In June 2014, the AB-129 bill signed by the Governor of California stated that alternatives to the US dollar, including digital currency, points, and coupons, are legal currencies; while New York is stricter on digital currency. On December 18, it incorporated virtual currency management and Bitcoin license-related regulations into the "New York Financial Services Laws and Regulations" and began to implement regulation of Bitcoin.

On January 26, 2015, Coinbase, in which the New York Stock Exchange holds a stake, was approved to establish a Bitcoin exchange, and the process of Bitcoin regulation legislation in the United States, represented by New York State, was initially completed. In June 2015, the New York Department of Financial Services released the final version of the regulatory framework for digital currency companies, BitLicense.

3. UK: Positive attitude towards Bitcoin

In November 2014, UK Treasury officials stated that “cryptocurrencies and cryptocurrency exchanges are not currently regulated in the UK.”

In March 2015, the Ministry of Finance released a report on digital currency, suggesting that anti-money laundering regulations will apply to digital currency exchanges in the UK. The UK Treasury will discuss the regulatory model for digital currency at the meeting, and the government will work with the British Standards Institution (BIS) and the digital currency industry to develop an "optimal" regulatory framework.

In addition, the British government has increased funding by 10 million pounds for research on digital currencies.

4. Japan: Defining Bitcoin as an asset

In March 2014, the Japanese Cabinet decided to prohibit banks and securities companies from engaging in Bitcoin business, but it did not take any regulatory measures on Bitcoin transactions and adopted a flexible policy on the collection of consumption tax on Bitcoin purchases.

In June 2014, Japan's ruling Liberal Democratic Party announced that it had decided not to regulate Bitcoin for the time being.

In August 2015, the CEO of Mt.Gox was arrested and the Japanese government considered regulating Bitcoin.

In May 2016, Japan approved its first digital currency regulatory bill and defined it as property.

5. Canada: Recognizes Bitcoin’s “currency status”

In December 2013, the world's first Bitcoin ATM was put into use in Vancouver. Many Bitcoin entrepreneurs in the United States chose to move to Canada to start their own businesses due to legal and regulatory issues in different states in the United States.

6. France: Bitcoin trading is not illegal, but be cautious when investing

In its 2011 annual report, the French Financial Intelligence Agency mentioned the use cases of Bitcoin, in fact recognizing the full legality of using Bitcoin, that is, using Bitcoin to avoid the related fees of foreign exchange conversion and transfer between the euro zone and non-euro zones using US dollars.

In response to the fluctuations in Bitcoin prices, the French government warned users to invest with caution.

2. Opposition countries

1. Thailand: The first country to ban Bitcoin

In the view of Thailand's Foreign Exchange Control and Policy Department, the following activities are considered illegal: buying and selling Bitcoin, using Bitcoin to buy or sell any goods or services, and having Bitcoin transactions with anyone outside of Thailand.

Thailand is the first country in the world to ban Bitcoin.

2. China: It does not have monetary attributes and is not a real currency

On December 5, 2013, the People's Bank of China and five other ministries and commissions issued the "Notice on Preventing Bitcoin Risks", which clarified the nature of Bitcoin, stating that Bitcoin is not issued by monetary authorities and does not have monetary attributes such as legal tender and compulsion, and is therefore not a real currency. At the same time, financial institutions are prohibited from providing Bitcoin trading services.

As soon as this notice was released, the price of Bitcoin fell by nearly 50%.

3. Russia: Tough stance on Bitcoin

In February 2014, the Russian Prosecutor General's Office issued a statement announcing that Bitcoin could not be used in Russia.

In August 2014, Russia released a draft bill that mentioned a series of administrative fines, including for companies and citizens who issue, create or deliberately disseminate information about the production or operation of digital currencies.

In March 2015, Russian Deputy Finance Minister Alexei Moiseev issued a statement that the Russian government will enforce the Bitcoin ban issued in August last year.

4. South Korea: Refusing to recognize Bitcoin as a currency

The South Korean government believes that Bitcoin is not a real investment and will not impose capital gains tax on Bitcoin because this will increase the legitimacy of virtual currencies.

5. Netherlands: Warning of Bitcoin Risks

The Dutch government issued a statement warning of the risks of Bitcoin, questioning the fact that Bitcoin storage is not guaranteed and is not issued by the government or the central bank. This statement caused the price of Bitcoin to fluctuate violently.

Post-Bitcoin Era - Be Open to Blockchain

1. European Parliament: Open to new technologies

In February this year, the European Commission put cryptocurrencies at the top of its fast-developing target areas. This move has promoted policy research on digital currencies by various institutions.

From April 18 to 21, the European Digital Currency and Blockchain Technology Forum (EDCAB) held a blockchain-focused “expo” for policymakers from the European Parliament.

At the same time, the European Central Bank is open to new technologies and said it plans to evaluate the relevance of blockchain and ledger technology to banking operations such as payments, securities custody and mortgages.

2. Dubai: Establishing a Global Blockchain Committee

The committee was established in early 2016 and currently has more than 30 members. These include government entities (Smart Dubai Office, Dubai Smart Government, Dubai Multi Commodities Centre (DMCC), international companies (Cisco, IBM, SAP, Microsoft) and blockchain startups (BitOasis, Kraken and YellowPay)).

On May 30, 2016, Dubai Global Blockchain Committee (GBC) held its 2016 industry theme meeting and announced seven new blockchain concept verifications, including: medical records, jewelry transaction protection, ownership transfer, business registration, digital wills, tourism management, and improved freight.

3. South Korea: Top-down blockchain innovation

At the end of 2015, South Korea's Shinhan Bank participated in the financing of blockchain companies.

In February 2016, the Bank of Korea proposed in a report to encourage the exploration of blockchain technology.

In the same month, Korea Exchange (KRX), South Korea’s only stock exchange, announced that it was developing a trading platform based on blockchain technology.

4. Russia: From tough to moderate attitude

Russia has traditionally taken a tough stance on Bitcoin, but that has changed recently.

In early 2016, the Russian Central Bank began to consider legalizing Bitcoin and regulating Bitcoin transactions, especially P2P transactions and personal business custody.

5. Australia: Exploring blockchain technology in multiple fields

In late 2015, the Australian Stock Exchange (ASX), Australia’s largest exchange, was considering applying blockchain technology to improve its trading systems as an alternative to its clearing and settlement systems.

In March 2016, media reported that Australia Post (the country’s largest express delivery service company) has begun exploring the application of blockchain technology in identity recognition.

Blockchain technology is also being used in the political field in Australia. A new political party, Flux, is trying to use blockchain technology to rewrite the political currency system.

6. The United States: Giants’ layout

At the end of 2015, major financial institutions stepped up their research on blockchain technology. IBM, JP Morgan, the London Stock Exchange and Wells Fargo announced an open ledger project, a new alliance that will help companies more easily build their own blockchain technology.

In December 2015, the U.S. Securities and Exchange Commission (SEC) approved Overstock to issue its own shares through the Bitcoin blockchain.

In addition to financial institutions, Silicon Valley technology giants have also taken action. IBM launched the "Open Ledger Project" to develop enterprise-level blockchain software structure and promote the commercial use of blockchain technology; Microsoft uses the Azure platform to provide users with "Blockchain as a Service" (BaaS); Intel also released SawtoothLake, an efficient modular platform for building, deploying and running distributed ledgers.

Government agencies are also making plans. In June 2016, the U.S. Department of Homeland Security subsidized six companies dedicated to the development of government blockchain applications to allow companies to study government data analysis, connected devices and blockchain.

7. China: Rapid rise of industry alliances

From the perspective of government departments, in February 2016, Zhou Xiaochuan, the governor of the central bank, pointed out that digital currency must be issued by the central bank, and blockchain is an optional technology. Prior to this, the central bank also held a seminar on digital currency.

From an industry perspective, a number of industry alliances are being established.

In December 2015, the Blockchain Research Alliance and the Blockchain Application Research Center were established; in January 2016, the Global Shared Finance 100 Forum announced the establishment of the "China Blockchain Research Alliance" in Beijing; in February, the Zhongguancun Blockchain Industry Alliance was established; in April, the China Distributed Ledger Infrastructure Alliance (ChinaLedger) was announced.

From a corporate perspective, many startups related to blockchain technology have emerged one after another.

8. UK: Encourage in-depth research on blockchain technology

On January 19, 2016, the British government released an 88-page white paper titled "Distributed Ledger Technology: Beyond Blockchain". The British government believes that it is very important for the government to participate in the legislation of digital currency and blockchain networks, and the government encourages in-depth research on blockchain technology. The British government is actively evaluating the potential of blockchain technology and considering using it to reduce financial fraud and lower costs.

In addition, the British government plans to develop an application system that can be used between the government and public institutions. Walport, the chief scientific adviser to the British government, and his research team will collaborate to integrate distributed ledger technology into government management to ensure government privacy and security.

How to tell if new technology is just hype or actually works

Amir Taaki, a core developer in London, explained the phenomenon of repeated ups and downs over the years by citing the well-known hype cycle in the industry: "You can say that Bitcoin follows the 'Hype Cycle' of market research firm Gartner. This refers to the theoretical curve of a technology from adoption to maturity. This cycle is divided into four stages: the germination of technology, then the overheating period, the trough of disillusionment, the recovery period and the productivity plateau period."

2015 Emerging Technology Maturity Curve Report

In early 2016, Gartner released the "2015 Emerging Technology Maturity Curve Report", which evaluated the market type, maturity, commercial application and future development of more than 2,000 emerging technologies in 112 fields.

It can be clearly seen from the figure that the cryptocurrency and virtual currency trading platform represented by Bitcoin has gradually fallen from the peak of hype in 2014 to the trough of disillusionment.

The report lists technologies worthy of attention, including virtual reality, machine learning, cryptocurrency and exchange, and claims that these technologies will reach their peak in the next 5-10 years.

Compared with 2014, virtual currency trading platforms are new technologies, mainly based on the development of closer digital business.

On the 2015 annual curve, a large number of technologies are related to mobile interaction technologies, including: virtual personal assistants, neuro-commerce, digital office, intelligent consultants, self-fulfilling advanced analysis, virtual currency and trading platforms, etc.

It is important to understand that different groups take different amounts of time to adopt new technologies. Technology enthusiasts make up the early market, while conservatives make up the subsequent mainstream market.