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From belarus to the kingdom of Bahrain, the small states are going to be big in cryptocurrency

LONDON (Reuters) – the belarus President Alexander Lukashenko met an entrepreneur Viktor Prokopenya, in March 2017, the discussion was scheduled to last an hour but went on for three times as long.

Belarusian to THE investor, and the entrepreneur Viktor Prokopenya, is pictured at his office in London, united Kingdom, July 15, 2019 at the latest. Photo of July 15, 2019 at the latest. REUTERS/Thomas Wilson

In the meeting, Prokopenya said, and ended up with sinti and roma and with that he set the rules for the raising of the country’s tech sector. Prokopenya been working with companies and attorneys, to draft guidelines in order to cash in on the emerging digital industry, cryptocurrencies.

Two years later, the rules are in place. Investors are able to trade bitcoin on an exchange run by Prokopenya, while other companies are launching their own cryptocurrency platforms.

“The idea was to make it from scratch,” Prokopenya, told Reuters in an interview in London. “In order to make sure that it is free of charge, in a few of the things that are required in order to be free, and to be very rigorous in other aspects of the company.”

Contacted for a response, Lukashenko’s office directed Reuters to an account of the meeting here at the president’s web site.

The white Russian is one of only a handful of smaller countries have come up with a special rule book for the digital currency. In their efforts to contribute to the development of the global market, and the growth rate of the who’s who of the industry, from the exchange with real estate agents.

So far, cryptocurrency, companies have often had to choose between the two extremes and the decision as to where to set up shop.

In the major financial centres such as London and New York, which are applicable to our financial regulations to make the sector attractive to large organizations that are the safety and the respect of the complexity and cost prevent many of the startups in the heart of the young industry.

Conversely, the light-regulated jurisdictions such as the Seychelles and Belize, and allows much easier access to the market. But the states with the bright lines could provide less protection to investors, and to have more control of the laundering of the money, the lawyers have to say.

With the likes of belarus, russia and the other new entrants, including saudi arabia, cyprus, Malta, and Gibraltar, are looking to offer a third way: the construction of specific rules and regulations for the cryptocurrency industry, is betting it can attract businesses through the provision of the regulations to safety and security and perks such as tax breaks.

Even though there is no guarantee of success, cryptocurrencies represent a rare opportunity for these countries or regions, to extract a slice of an emerging market country, may be the attraction of investment and creation of new jobs, at a time when the major financial hubs in the adoption of a more conservative “wait-and-see” approach.

“If you are a consumer in the see-no-evil, hear no evil in the camp,” said Jesse, a bidet, a lawyer at Clifford Chance in New York, New York, specializing in crypto-regulation. “On the other hand, in the u.s., the u.k., and the european union. In the middle, and that’s the real juicy part of the spectrum.”

The general said that both the countries and the companies will be able to take advantage of the rise of frameworks, especially for cryptocurrencies. However, the member states, the rules are wrong, it would be able to fall to the fault of the general rules to eliminate the illegal use of digital currencies, he added.

Indeed, there are significant questions as to whether these countries will be able to be consistent and to avoid hacking, and illegal activities such as money laundering, all of which plague the non-transparent sector, and was able to back up their reputation as a safe and secure urban centres.

Another risk of using these rules in an unpredictable and fast-changing industry is the fact that they could quickly be out of date.

‘CARROTS NOT STICKS’

ZPX, a Singapore-based computer company, is to launch a cryptocurrency trading platform, Qume, and next month, catering to institutional investors, such as a high-frequency proprietary trading companies and hedge funds.

She has decided to run the business in the kingdom of Bahrain’s capital, Manama, and the considerations are confronted with the characteristics of the dilemma and confront it, many of the players in the industry.

ZPX, CEO of Ramani Ramachandran said that the mind works in so-called offshore jurisdiction with low or no regulation. Such a foundation would be able to scare off big investors, like a review of digital coins of the warm-up of global regulators and politicians, ” he said.

“As the market matures, similar to the traditional capital markets, the mainstream institutional capital is becoming more and more in order to come to the regulated markets such as the Qume, in contrast to the ‘light-touch’ sites in the offshore jurisdictions.”

Saudi arabia-launched of the rules in February for cryptocurrency companies, including trading platforms, including strict customer background checks, and governance standards and controls to cyber security risks.

It is also generally a lot cheaper in terms of compliance and administrative costs to set up in smaller sized locations, such as in saudi arabia than it is in a major financial hubs, said Ramachandran.

ZPX, estimates of these costs to be approximately $200,000 per year in Japan, compared to at least $ 750,000 a year in London.

A further advantage of the set-up of a small country, it said, ZPX, co-founder, Aditya Mishra was in close communication companies would be able to talk with the authorities, something that is very difficult, it would be a major financial centre. Saudi arabia also provided an easy access to the Gulf markets, he added.

One of the other cryptocurrency trading, iExchange, the operation of the belarusian capital, Minsk, this week, with the aim of attracting investors from the CIS countries the market of Russia and the former Soviet states of america.

Co-founder, Igor Snizhko said: “belarus has to be the best option, because it was a regulatory framework that other countries in the region are lacking.

Belarus, requirements of audits of issuers of digital coins, and the details of the projects that are at the basis of all the issues. For trading systems, the rules for tracking suspicious transactions in order to comply with international money laundering standards.

“For many of the CIS market is very promising, and it is very dangerous to at the same time,” he added. “A lot of big and talented players are still scared by a factor of a lack of transparency. We don’t want to work in a ‘grey’ area of competence.”

Dairy products, which are offered by belarus are the tax benefits for companies in the mining industry or trading cryptocurrencies. The rules, which are described by PwC as “carrots, not sticks, will also give the companies more rules relating to foreign exchange controls and visa requirements.

In the United States of america, on the other hand, the digital currency’s transactions are taxable. In the Uk, the tax levied on the added value of the application.

iExchange said that there was, in the first instance, have looked at other countries, such as Estonia and Malta, but it was made in belarus, due to the close proximity of the target.

TAILOR-MADE APPROACH

The size of the global cryptocurrency industry, it is difficult to measure due to its complexity and lack of transparency. Still, Ireland-Research and Markets estimates that the sector will grow to $1.4 billion by 2024 from $1 billion this year. The other estimates show a higher growth rate.

Encryption schemes vary throughout the world. While on Facebook, the unveiling of the Scale is mint and has asked to sign on as a co-ordinated protest against the cryptocurrencies of the major economies, made up of a patchwork of approach is still in the rules from country to country.

China has even banned cryptocurrencies, frankly, as a government panel last week recommended a similar measure.

It After of Computer services, a London-based cryptocurrency futures exchange, stated that there are clear advantages to being an important financial hub, which is to have access to a highly educated and skilled workforce.

“You have to be in a place where you can get the staff,” he said. “Our product teams, development teams of the financial institution’s experience.”

That will be the subject of a well-established center will also allow the company access to a deeper, more liquid markets and to provide greater certainty as to the effects of law, said Ann Sofie Cloots, one of the co-authors of a study from the University of Cambridge on cryptocurrency regulation.

“It may be an indication that you are a more sophisticated investor base, greater access to capital,” she said. “It’s a reputation thing.”

To be sure, it’s not just the likes of belarus, russia, and saudi arabia have come up with their own crypto-a set of rules: Some of the larger countries, such as France and Japan is also moving in that direction as well.

However, it is the smaller countries, which tend to be at the launch of the most advanced of the “bespoke” approach, according to a University of Cambridge study.

This could bring clarity to both the cryptocurrency, companies, and other related services, such as banks, previously on the look-out of the sector by the unclear legal status, he said Cloots.

Slideshow (3 Images)

Belarus is an entrepreneur Prokopenya, whose Instagram posts of a sports car in Cyprus and on the beaches of Dubai will be followed by the increase of 5.6 million people and recognized the risks that came with the blockchain technology, including the potential for money laundering.

However, he said that this could be mitigated by clear rules, and that in countries such as belarus, russia should not miss out on a chance to grab a slice of the emerging market.

“The greatest risks come from not taking the risk,” he said.

Report by Tom Wilson; Additional reporting by Andrei Makhovsky in MINSK; Editing by Pravin Char

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