/Trending Bitcoin News and Market Sentiment February 23, 2020: Cyprus SEC Welcomes Crypto Despite Absence of Regulation as Israeli Academics Urge for Gentler Approach to Crypto Regulation

Trending Bitcoin News and Market Sentiment February 23, 2020: Cyprus SEC Welcomes Crypto Despite Absence of Regulation as Israeli Academics Urge for Gentler Approach to Crypto Regulation

Bitcoin

  • Bitcoin continues to seek firmer ground as price trades around USD 9,900
  • Although Cyprus doesn’t yet have crypto legislation, the SEC there welcomes it
  • Two Israel academics have called for a gentler, more patient approach to crypto legislation

 

Bitcoin markets have failed to produce any significant movements so far today, making it a rather uneventful weekend, with neither bulls nor bears willing to commit to any actions that would show their hand to each other so early in the year. Altcoins continue to maintain the same cautious approach in the market as Bitcoin, but will likely be very pleased with where they are now. Though most are some distance away from the year’s high in US dollars, they still maintain a healthy growth rate from where they started on 1 January 2020.

As markets seek some serious indicator of direction, we look back on a week of good news for Bitcoin and crypto in terms of regulatory developments, beginning with Cyprus, where the Cyprus Securities and Exchange Commission (CySEC) has issued recent statements via a report from its Innovation Hub. The Hub was launched in October 2018 to engage with fintech and regtech sectors, and today has 19 different firms engaged directly, of which nine utilize blockchain. Some of the projects employ distributed ledger technology (DLT) to transfer and verify ownership of financial instruments, or use the tech to trade facilities. One is a venture capital fund that makes investment in virtual currency startups.

The Hub has been deemed successful to get regulators and innovators to share knowledge while promoting the development of regulations that nurture innovation, while getting industries to seek compliance. Several third party firms from legal, credit and education institutions are also involved.

CySEC Chairwoman Demetra Kalogerou declared: 

“The update on the Innovation Hub is a timely reminder of the work we are doing to strengthen investor protection by embracing new innovations in financial and regulatory technology. CySEC’s approach to innovation fits into the broader national agenda of aiming to create a robust ecosystem in which fintech firms can flourish responsibly in Cyprus. We are committed to ensuring our supervisory aims are aligned to national and international standards.”

All this, while the country actually doesn’t have crypto regulations! Kalogerous had said earlier that CySEC was “evaluating the risk and benefits of crypto innovation to determine whether further actions and legislative requirements are needed to ensure full investor protection.”

And it appears, Cyprus aren’t the only ones who recommend a gentler approach to crypto regulations. In Israel, two experts have also said that regulators should avoid being dictators and instead seek to influence public behavior with regards to new industries such as blockchain.

Hada Jabotinsky and Nassim Cohen issued their opinions in a new paper called ‘Nudge Regulation and Innovation Policy’, which was also published by the University of Oxford Law Department blog recently.

The paper says that:

“Under uncertainty, using strict regulatory measures might kill the innovation before the market matures, resulting in inefficiency. Moreover, strict regulation can infringe on entrepreneurs’ right to conduct a business. In addition, using strict regulation without fully understanding the technology and the harm it might cause consumers might not provide them with the needed protection.”

It argues that regulators continue to show how hard it is to understand the subtle and obvious implications of innovative technology, especially since the tech development is gathering pace. And to decide on tech like DLT, crypto, IoT and autonomous cars, it is better to let experts and the Wisdom of Crowds to find the best solutions.

In essence, the authors recommend using “nudges” as a policy tool that they believe more advantageous than other tools, as it allows for technological developments to happen while giving the opportunity to regulators to use crowd intelligence to identify the most efficient direction to move regulation.

They do note that the regulators’ “gut instinct” would always eventually determine the direction of the nudge, so they could still make mistakes. However, different than binding regulations, should that instinct prove wrong, they could still ignore the nudge or accept part of the solution from crowd wisdom.

Let’s see if that implementation in Cyprus brings results!

 

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