Regulations Round-Up: Bitcoin Bad in Ukraine and Indonesia, ICOs Reviewed in Thailand

In recent days, several governments have issued statements pertaining to bitcoin regulations. The Indonesian and Ukrainian central banks have clarified that bitcoin will not be recognized as a means of payment, whilst Thailand’s Securities and Exchange Commission (SEC Thailand) has made preliminary statements regarding initial coin offerings (ICOs).

Also Read: Russian Prosecutor’s Office Summons Burger King for Issuing Cryptocurrency

The Central Banks of Indonesia and Ukraine Will Not Recognize Bitcoin as a Means of Payment

Speaking at a recent Ukrainian Financial Forum event, the deputy chairman of the National Bank of Ukraine, Oleh Churiy, has revealed key insights into the government’s determinations regarding impending Ukrainian bitcoin regulations. Churiy stated that Ukrainian officials have concluded that bitcoin is not a currency due to the absence of a government issuer and that bitcoin will not be legally recognized as a form of payment. “We can say that it is definitely not a currency as it has no central issuer. We also cannot recognize cryptocurrency as means of payment”.

At the start of the month, Ukrainian lawmakers met to conduct preliminary discussions regarding the legality of bitcoin and other cryptocurrencies within the country, agreeing to finalize their determinations within “3 weeks”. The preliminary discussions suggested that Ukraine may move to develop a permissive regulatory apparatus pertaining to cryptocurrency and blockchain technology, with the Chairman of the National Securities and Stock Market Commission stating that “blockchains, bitcoins, tokens and other technology solutions have already become an integral part of the financial market”. Less than a week later, Reuters reported that Ukraine’s Justice Ministry had conducted the country’s first trials of blockchain technology being conducted by the state, with the ministry planning on utilizing blockchain technology in conducting auctions of seized assets as part of an initiative designed to “modernize state institutions and eliminate corruption.”

Indonesia’s central bank, the Bank of Indonesia, has reaffirmed that bitcoin transactions are not legally recognized according to its “Service Provider of Payment System” (PSJP) legislation. Indonesia media outlets have reported that Executive Director of Payment System Policy Department, Eny V Panggabean, stated that Bank of Indonesia “forbid[s] Bitcoin to be transacted in PJSP,” at a recent Indonesia Banking Expo seminar.

CNN Indonesia reports that Oscar Dermawan, the CEO of Bitcoin Indonesia, has criticized the central bank’s position, implying that the government has failed to fully recognize the technological phenomenon and innovative potential that bitcoin encompasses. Dermawan described bitcoin as “a remarkable technological achievement”, stating that “the workings of [bitcoin] are even commented on by Bill Gates as … a technological tour de force.” When asked to discuss the development of Indonesia’s domestic bitcoin economy, Dermawan said that “transactions in Indonesia are still very low.”

SEC Thailand Has Issued a Preliminary Statement Regarding ICO Regulations

The Securities and Exchanges Commission of Thailand has warned that ICOs issuing tokens that “resemble financial returns, rights and obligations in similar ways to securities under the Securities and Exchange Act” will fall under the regulatory jurisdiction of the SEC Thailand. The SEC states that “in cases where an ICO constitutes [the] offering of securities, the issuer will need to comply with applicable regulatory requirements under the SEC Thailand’s purview.”

The SEC Thailand is seeking to adopt a balanced policy with regard to ICOs, expressing a desire to “strike the balance between supporting digital innovation and protecting investors from potential ICO scams.” The SEC highlights concerns that “in some cases ICO may be deliberately used as a tool for fraud or scam”, before stating that the “SEC Thailand encourages access to funding for businesses, including high potential tech startups, and realizes the potential of ICO in answering startups’ funding needs.”

Ultimately, Thailand’s SEC “realizes that ICO may not yet fit neatly with SEC Thailand’s current regulatory framework…. and welcomes comments and suggestions from the private sector.”

What governments do you think will be next to recognize bitcoin as a means of payment? Share your thoughts in the comments section below!

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