Currency.com, a cryptocurrency-related exchange, has announced the launch of the world’s first regulated tokenized securities exchange – sending token rights into the hands of the masses.
Currency.com is the first crypto enterprise of its kind to be licensed in Belarus under the Decree on the Development of a Digital Economy and regulated by the High Technology Park (HTP). The state’s innovative legislation, ratified in December 2017, set out to liberalize the conditions for setting up IT product companies within Belarus.
Since then, the Decree has changed the way cryptocurrency and blockchain-related enterprises are able to go about their business. By formulating the world’s first discrete legislative framework dedicated to crypto assets, rights, and ownership, such businesses – like Currency.com – are able to provide institutional acceptance and a clear legal status for tokens, smart contracts, and operations related to the mining, holding, buying, selling, distributing, and exchanging of cryptocurrencies.
Crucially, by mandating that the source of rights remains with the token, the HTP legislation distinguishes itself – and Belarus – as an attractive location in which to do business in the cryptocurrency sector. The result is an ecosystem which, unlike most jurisdictions, allows tokens to be withdrawn with their rights intact. It is a whole new kind of exchange economy.
Belarus Leads The Way
The idea of a ‘tokenized security’ is non-existent in the European Union. There are securities and there are tokens: but a security is a security and a token is a token. Conventionally, transferring a token doesn’t transfer the source rights of a security. Under the new Belarus law, the token becomes the source of rights to a security. Other platforms attracting attention include DX.Exchange, which allows clients to buy a limited number of shares using crypto. However, these shares are not tokens.
The desire for an organically regulated tokenized securities exchange like Currency.com is reaffirmed by the 130,000 people who signed up to our waiting list without any advertising spend. With over 45,000 clients now onboarded and volumes growing substantially, it is a very encouraging launch.
The introduction of advanced anti-money laundering laws has secured Belarus’ place at the forefront of fraud prevention in crypto-related ventures. The framework includes strict data and customer protection regulations that are aimed at protecting consumers and guarantee data protection to the same standard as the EU’s General Data Protection Regulations (GDPR). As well as this, heightened business standards have been implemented whereby firms operating in this industry must now meet certain operational requirements that must be verified by an extensive audit from one of the ‘Big Four’ accounting firms.
Belarus had previously demonstrated its proficiency in fostering innovative technology-based companies with its special economic zone, the High Technologies Park (HTP), offering tax incentives for IT businesses in order to encourage development in this sector. The Decree on the Development of a Digital Economy has furthered that cause.
Are Other Countries Joining?
It is expected that this regulation will bring an influx of foreign investment into Belarus, with hopes of many US technology and blockchain-related companies coming to set up shop in the High Technologies Park. “We are looking forward to more U.S. tech and blockchain companies doing business in Belarus following the establishment of these new regulations,” David Baron, Chairman of the Belarus-US Business Council, said. “Many U.S. IT companies already know Belarus as a place to set up their software development division, but Decree No. 8 will further increase Belarus’ attractiveness as a top destination for cryptocurrency ventures and value-generating global IT product companies.
“Of course, it will be important for companies that want to establish themselves in the HTP and do business in the U.S. or with U.S. citizens to respect and adhere to U.S. laws and regulations. For example, under U.S. regulations if a non-U.S. company is operating a cryptocurrency trading platform and allows U.S. citizens to participate, the company must be registered as a money transmitter in the U.S. The U.S. securities laws may also apply to cryptocurrency ventures and will require that the platform be registered as an alternative trading system in the U.S.”
Legislators were keen to consult with world experts on financial regulation and were pleased to engage with Martin Hess, Partner at Wenger & Vieli. Hess, who previously worked at the Swiss National Bank drafting financial regulations in Switzerland, said that the framework now in place is a ‘stand-alone, comprehensive regulation for digital assets.
“Cryptocurrency regulation is the future because only regulation provides legal certainty. The distributed consensus provided by algorithms is not sufficient,” Hess said. “The Belarus approach has the benefit of speed and simplicity because it does not require an understanding of the whole Belarusian legislation, court and legal practice in order to start a business. On the other hand, the Belarus approach lacks the basis of an established legal system and practice in order to interpret the regulations. Furthermore, the start from a clean slate makes it difficult to compa
Currency.com’s Next-Generation Platform
The platform created by Currency.com allows the user to access and benefit from price action across the world’s most popular markets without putting their crypto holdings under price pressure. Currency.com is accessible to all types of investors who pass AML and KYC procedures and is planning to issue over 10,000 tokenized securities that will track the underlying market price of common financial instruments such as global equities, indices, and commodities.
For example, clients can purchase a token that mirrors the performance of an Apple share on the Nasdaq (APPLE.CX) and offers the same economic costs and benefits of said share. These tokens can be bought directly using cryptocurrencies Bitcoin (BTC) or Ethereum (ETH) and will be able to be traded with leverage. Currency.com will leverage the technology of its sister platform Capital.com, regulated by both the FCA and CySEC, to offer access to a tokenized version of a contract for exchange for specific equities, commodities, and indices.
Belarusian entrepreneur, initiator of the Development of a Digital Economy and founder and CEO of VP Capital, has spoken promisingly of Currency.com’s capacity to “disrupt and revolutionize financial technology on a large scale. Access to global financial markets has historically been available through one primary medium – the stock exchange – but Currency.com leverages groundbreaking cryptocurrency technology to create opportunity for investors who might not have access to traditional stock markets otherwise.
“Belarus has become one of the most forward-looking countries when it comes to blockchain technologies and the first country in the world to create a dedicated legislative framework tailored to cryptocurrencies and their industry,” Prokopenya said.
Currency.com will be onboarding new users to the platform gradually to ensure optimal functionality as the service scales. Users can apply to the waiting list on the Currency.com online platform at https://currency.com/. The company will also be rolling out a referral program whereby traders will receive invitation codes that they can share with their friends. Once a user onboards, they will have the chance to participate in this exclusive referral program. Currency.com will regularly distribute referral invites to its traders, who can invite friends and subsequently earn 50% of their trading commission for their first six months of trading. The Currency.com iOS and Android apps will be available for beta testing from March 2019.