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As ether’s price has crashed spectacularly over the last couple months, a lot of people have been talking about ICOs. And for good reason: it’s no secret that ether’s rise to over $1,200 earlier this year was due in large part to the ICO frenzy happening at the same time. Instead of pursuing traditional financing routes, companies were raising millions of dollars worth of crypto, often from ordinary people who could never get in on a traditional investment round. Many of these startups were building ERC-20 tokens and were raising funds in ether, which in turn drove up the price of the token.
As the ICO boom has subsided, ether has lost a major source of demand. Furthermore, startups that raised funds in crypto but need fiat money to pay their expenses have been selling their ether for U.S. dollars or other fiat currencies. This sell-off is pushing down the price of ether, and has the potential to push it down even further. Meanwhile, everyone is suffering the consequences of a volatile market.
This close relationship between ether and the ICO market isn’t good for anyone. The most obvious risk is to startups who face enormous uncertainty about how much funding they actually have. A sustained bear market like the one we’ve been in for the past couple months could all but wipe out their funding. Of course, projects that raise funds in ether and then see the price increase could end up with more funding than they anticipated, but I’d argue that these gains aren’t worth the uncertainty that comes with them. How can you possibly follow a product roadmap when you can’t even create a reliable budget?
What’s not talked about as much is the fact that this situation is also bad for investors. The primary measure of success for these people is return on investment, but it’s much harder to predict or measure ROI when you’re not actually sure how much you’re investing. What was intended to be an investment worth $1,000 could be worth $500 or $2000 two months later. If you’re trying to measure ROI in fiat terms, this is a problem. Furthermore, if the price of ether is expected to increase, the expected return to make an investment worthwhile will have to be higher than the expected return of simply holding ether, potentially disincentivizing investment and making it more difficult for companies to raise funds.
In order for ICOs to be solidified as a legitimate and useful fundraising scheme, they need a stable unit of account. This will give certainly to both startups and investors about how much funds are being raised, how much the company is worth, and how much return investors are making down the road.
One possibility is for blockchain startups to simply raise funds in fiat. This type of ICO would have one foot on the blockchain and one foot off, with investors providing fiat investment in return for the startup’s tokens. However, this sort of solution seems to go against the spirit of ICOs as a new, on-chain fundraising method. It could also introduce new layers of friction, where crypto investors who want to invest in a blockchain startup, potentially with their profits from the cryptocurrency market, have to take their wealth off the blockchain, just to put it right back on when they acquire the ICO tokens.
A much better option would be for startups to raise ICO funding using stable coins, such as EURS for European companies or TrueUSD for their American counterparts. These tokens provide a stable unit of account, giving clarity to both startups and investors about the amount of capital invested. They also allow the entire process to happen on the blockchain, removing unnecessary friction and promoting cryptocurrency markets as a robust financial ecosystem.
Of course, these days you can’t talk about ICOs without mentioning fraud. After so many scammy projects, the perception of ICOs has gotten so bad that even legitimate projects are associated with fraud. Stablecoins can help with this as well. Having a stable unit of account gives both investors and regulators clarity about how much money a startup actually has, making it easier to demand transparency about how they spend that money. If a startup raises funds in ether, and you’re not sure how much cash they actually have, then it’s more difficult to infer whether they’re spending that cash responsibly or appropriately. There are plenty of other issues with fraudulent ICOs that using stablecoins won’t solve, but it’s a move in the right direction.
It’s time for the ICO market to move out of infancy and start to mature, allowing more accountability and providing more protection to investors, hopefully without cutting off access for everyday people. There are projects, such as Civil’s upcoming ICO, that are guiding us in the right direction. Using stablecoins to establish a reliable unit of account and bring clarity to ICOs would be a significant step toward a safer, more legitimate ICO market.
In August, STASIS celebrated its one year anniversary. And what a year it’s been! In the past twelve months, we’ve worked with two government organizations on major initiatives, seen Malta introduce pioneering legislation around the blockchain ecosystem, and launched our own stable coin, to name a few developments. As we pass the one-year milestone, it seems like a good time to share an overview of what we’ve accomplished so far.
Establishing government partnerships
STASIS began with the initial goal of helping regulatory bodies streamline legislation around blockchain technology in order to foster innovation-friendly local ecosystems and prevent regulatory arbitrage. Our first such partnership was with the Maltese government, which in July passed pioneering blockchain legislation. We offered guidance and advice to the government throughout the process of researching and drafting this legislation. We also had the honor of welcoming both the President and the Prime Minister of Malta to our EURS launch press conference in a show of support for the local blockchain ecosystem.
We’ve also partnered with the Astana International Financial Centre (AIFC) in Kazakhstan to offer guidance on their new blockchain legislation and to help the nation launch a stable digital currency. The AIFC’s goal is to develop financial markets within Kazakhstan, and we’re excited to see them recognize the benefits of digital assets.
Developing our own stable coin
Regulatory risk isn’t the only thing keeping institutional investors from entering the cryptocurrency market. Extreme price volatility significantly enhances the risk associated with any crypto-based investment. That’s why in July we decided to enter the stable coin space with our own token, EURS. EURS is a fully collateralized, fiat-backed stable coin that will allow investors to hold a digital asset without exposing themselves to the price volatility generally associated with cryptocurrencies. Anyone can check our on-chain asset balance on the home page of our website.
In July we also onboarded our first institutional client. Furthermore, EURS is already trading publicly on multiple exchanges, including Bancor, and is a supported currency on ePayments.
Ensuring versatility for any blockchain
As various blockchains continue to develop, we want to make sure we’re on the best one. That’s why we’ve developed a backend that will work on any blockchain. EURS currently operates on the Ethereum blockchain, because Ethereum offers the highest level of security available right now. Our wallet is also integrated with the bitcoin blockchain, allowing it to support BTC balances and transfers. And our team has already tested integration with the Stellar blockchain, which enables lower transaction fees. We’re ready for a smooth transition to whichever blockchain offers the most value for our partners moving forward.
Creating the wallet our users need
There are tons of cryptocurrency wallets out there, but even though we searched for one, we couldn’t find a wallet to meet our needs—one that would allow users to transact between various currencies with a simple and easy-to-use interface. So we made our own.
In May, we launched the STASIS wallet app. Originally, it only supported EURS and ether, but in August we added support for bitcoin as well. Now users can hold their EURS, ETH and BTC balances all in the same place. Users can also exchange between supported tokens in-app, and can of course send or receive those tokens with their ETH and BTC addresses. We’re planning to add more supported tokens soon.
Providing the legal framework to make it all safe
In addition to creating EURS, we’ve established a legal framework to make acquiring the token safe and easy for our partners. Our legal documents were prepared by Ganado Advocates, who were involved in the creation of Malta’s cryptocurrency regulation, and Tiang&Co, a PwC-associated firm and one of the world’s most progressive legal firms in the crypto space.
We’ve also developed four streams for institutional investors to enter the cryptocurrency market. They can acquire EURS via a bank wire transfer, a payment institution, a cryptocurrency trade, or a brokerage account using securities, bonds or other financial instruments. We’re the only platform in the stable coin market that offers all four options.
Moving Forward
We’re proud of everything we’ve accomplished this past year, but we’re also just getting started. The next year will see EURS trading on even more exchanges, the STASIS wallet supporting more tokens and, perhaps most importantly, the entrance of more institutional partners into the EURS ecosystem. We also know that the market will change, and we’ll have to adapt in ways we can’t necessarily plan out in advance. But whatever happens, we’ll continue to work on the cutting edge of blockchain regulation and stable coin technology, making the benefits of digital assets as accessible as possible for institutional investment.
These days, it seems like nothing gets crypto enthusiasts talking like the possibility of a bitcoin ETF. If cryptocurrency was a gold rush, you’d think ETFs were the shovel. They’re going to take bitcoin “to the moon,” right?
If that were the case, the SEC’s ruling on August 22 to reject 9 ETF proposals would be devastating. While the ruling isn’t terribly surprising, given that the SEC has rejected ETFs in the past, the latest round was notable because the ETFs under consideration were based on bitcoin futures, rather than the actual asset. This would give investors another layer of protection from volatility in the bitcoin spot markets, and would mean that the funds themselves don’t have to directly take on the risks associated with holding cryptocurrency, such as handling cryptographic keys.
Apparently, this wasn’t enough to get the SEC on board, and now it seems likely that a bitcoin ETF is a long way off for American investors. That’s the bad news. The good news is that to see this decision as a reason for despair is to greatly overestimate the importance of ETFs.
To illustrate this, let’s go way back, to about 8700 BC. That’s the estimated date for when humans first used copper. For almost 5,000 years, copper was the only metal humans knew of, and even after the introduction of precious metals such as gold and silver, or metals such as iron for creating tools and weapons, copper has remained an important natural resource all the way up to the present day.
And when was the United States’ first copper ETF launched? 2011. The copper market existed for thousands of years before it had an ETF. It did just fine.
Obviously, bitcoin and copper aren’t the same thing. For one, you can’t fashion tools out of bitcoin. And unlike copper, lines of code are not a resource with constrained supply (though it’s worth noting that bitcoin does have limited supply). The point is simply that an ETF is not crucial for a healthy market. The SEC decision may not have been ideal, but the market will be alright. The technological benefits of cryptocurrency—such as the fast, secure transfer of funds—haven’t gone away. There are already other financial instruments investors can use to get into bitcoin without going through an ETF, such as futures contracts or the recent arrival of a bitcoin ETN on American shores.
In many ways, your outlook on the future of cryptocurrency depends on what you’re hoping to achieve. If your goal is get-rich speculation, and you’re only interested in whether an event will lead to short- and medium-term gains or losses in the price of various cryptocurrencies, then the ETF decision may sting a little more. If, on the other hand, you really believe in the value of blockchain technology and digital assets to improve the financial system, then you have plenty of reasons to be optimistic.
A recent survey by ING found that 25% of Europeans expect to own cryptocurrency at some point, presenting the possibility of a huge increase in adoption from the 9% who own it today. In a recent survey of senior executives, Deloitte found that 84% of respondents either somewhat agree or strongly agree with the statement that “Blockchain technology is broadly scalable and will eventually achieve mainstream adoption.” This sort of adoption isn’t guaranteed to take bitcoin “to the moon,” and that’s okay. When it comes to integrating digital assets with the everyday operations of our financial system, we don’t need sky-high prices; it’s actually stability we want. For those of use who want a stable, sustainable future for digital assets, there is plenty of reason to be optimistic, with or without an ETF.
Intro
While stable coins aren’t an entirely new idea, the last year has seen a significant boom in new projects. These projects have a surprising amount of versatility, covering the three main categories (for now, at least) of stable coin: fiat-backed, crypto-backed, and algorithm-backed digital assets. Even within these categories, companies are taking different approaches to the same idea: some fiat-backed tokens, such as EURS, are backed by a single currency, while some are backed by a basket of currencies; some algorithmic mechanisms involve issuing bonds, some involve freezing tokens; etc.
The proliferation of these different approaches underscores the fact that so far no one has developed a proven method for maintaining price stability over time. To an extent, everyone is still experimenting. But the level of innovation needed to develop these different approaches should also give us confidence. It’s unlikely that we’ll ever achieve total price stability (and unclear whether we would even want to); even fiat currency doesn’t do this. But with each legitimate, high-quality project that enters the stablecoin market, we get a little closer to refining both the technology and the methodology necessary to provide the financial system with a reliable, predictable digital asset.
Of course, there’s another major issue for companies trying to create price-stable digital assets: regulation. If we were to try and put stable coins under an existing regulatory framework, we would have two options. The first is to consider stable coins as bearer puttable bonds with no specified maturity date—a debt instrument where the token can at any time be returned to the issues for the principal, and where the right to redeem them as such goes to whoever holds the tokens, regardless of whether he or she was the original purchaser.
The main issue here is that bonds are classified as a security, putting them under close regulatory scrutiny. While a certain amount of regulation would bring clarity to cryptocurrency markets and benefit the industry, a securities classification could drastically limit what can be done with cryptocurrencies, which would be especially problematic considering that, unlike stocks and bonds, many cryptocurrencies are intended to function as an everyday means of exchange. Another issue is that the U.S. government has banned the issuance of new bearer bonds. This could be a damaging precedent for stable coins, if they end up being considered similar to or the same as bearer bonds.
The second possibility, under existing regulation, is to consider cryptocurrencies as e-money. This would bring them under a body of legislation regulating the likes of both PayPal and notorious former e-money service Liberty Reserve. On the surface, this may seem like a good fit; cryptocurrencies are, after all, a digital asset used to make electronic transfers. However, there are some fundamental differences between cryptocurrencies and past e-money products that make the existing regulation unhelpful. Most significantly, e-money platforms in the past have operated using centralized databases, meaning that consumers had to place significant trust in the platform not to misuse or steal their money. Cryptocurrencies, on the other hand, operate on a decentralized ledger. This doesn’t necessarily mean that there are no centralization risks within the cryptocurrency market, but it still holds that e-money regulations aren’t written to address this new technological reality.
When it comes to stable coin regulation, there really isn’t a good regulatory framework available right now. As you evaluate different projects, it’s important to keep this challenge in mind.
In this post, I’ll discuss a few projects that we at STASIS find particularly interesting (though not always promising), and then discuss what makes the EURS stable coin unique among so many projects.
USD Coin
Circle has been making waves in crypto finance—and FinTech in general—for years. So it shouldn’t be surprising that the payments company would want to try its hand at stable coins. Enter USD Coin, or USDC. USDC is being created by CENTRE, an open-source project that was founded by Circle but is seeking to expand to include more members in the future. As a fiat-backed stable coin, USDC is intended to maintain a value equal to one U.S. dollar. This parity is achieved through a transparent reserve system, where each USDC is backed by one fiat USD held by Circle or another member of CENTRE. Of course, this only works if investors and other crypto-users can reliably verify that the reserves really do equal USDC in circulation. To this end, all CENTRE members will be required to provide publicly audited financial statements annually and every quarter.
TrueUSD
Like USDC, TrueUSD is a fiat-backed stable coin. It’s value is backed by a 1-1 collateral reserve held in fiat dollars. What make TrueUSD slightly different is that reserves are held in an escrow account, and TrustToken, the organization behind the token, never has to handle any of that money. Allegedly, this helps resolve a major trust issue, because token holders don’t have to worry about a central organization mishandling the reserves or lying about their bank balance. On the surface, escrow accounts may seem like a promising solution, but they raise questions about the company’s business model. If TrustToken can’t use the reserves to conduct money market operations, their options for generating revenue are limited. They can still generate fees for subscription and redemption of tokens, but there’s no way to guarantee consistency of these activities. If there is no subscription or redemption activity for a period of time—even if TrueUSD is still being actively traded on secondary markets, then TrustToken won’t make any money to cover their operating costs.
DAI
Dai, the token from blockchain startup MakerDAO, is primarily a crypto-collateralized stable coin, though the company also claims to use interest rates to stabilize the price. Unlike TrueUSD, which is fiat backed with a 1-1 collateral ratio, Dai is overcollateralized, with investors having to put up the equivalent of $1.50 worth of ether in order to create one Dai, supposedly worth about $1. This overcollateralization is supposed to protect the price of Dai from volatility in the underlying collateral.
Unfortunately, with the dramatic volatility of general cryptocurrency markets, $1.50 worth of ether can lose its value about as easily as $1’s worth. Because of the recent slide in the value of ether, the MakerDAO team was forced to deposit more ETH as collateral to avoid Dai liquidation. As long as the market for the underlying collateral remains volatile, MakerDAO will have a hard time maintaining sufficient reserves, and the price stability of Dai will be tentative at best.
Basis
We’ll let Basis be the representative for algorithmically-backed stable coins here, though obviously not all algo-backed coins work exactly the same way. The idea behind Basis is fairly simple: algorithms can respond to the price of the coin by buying/selling the coin in order to restrict/expand supply and stabilize the price.
This sound great in theory; it’s the execution that will likely be the problem. Having an artificial intelligence program identify how much supply should be added to or taken out of the market is one thing, but having a program that can actually perform these actions is much harder. In addition to monitoring supply and demand, the program will have to execute the creation and destruction of tokens, and handle and regulatory compliance processes involved. Even with the significant development of AI technology in recent years, that’s a lot to ask.
How does EURs fit into all this?
Again, these are just a few examples from a robust area of cryptocurrency development. For a more expansive list, you can go here or here.
The question for us here at STASIS is how the EURS stable coin fits into all of this. What makes EURS different? What do developments in the broader market teach us about how to provide institutional investors with an accessible, reliable digital asset?
One of the first insights the STASIS team had was that the primary bottleneck for stable coin creation will be the regulatory framework. The technological innovations happening in cryptocurrency, as exciting as they are, only mean so much if there’s no clear regulatory framework or, worse, governing bodies implement regulation that is unfriendly to cryptocurrency markets. To this end, STASIS began by working with regulatory bodies to help them develop blockchain regulations that reduce uncertainty for companies while protecting consumers and investors. This is still a major part of what we do.
After this, the team moved on to the tech component and built our own stable coin. EURS is pegged 1-1 to the euro, and is fully collateralized. Our three verification streams—daily statements, quarterly verifications by a Big Four auditing company, and on-demand verifications by a Big Four company for institutional partners—allow us to bridge the gap between current financial reporting practices and the new world of on-demand audits made possible by the blockchain. Our primary revenue stream will come from managing the fiat reserves as a money market fund with a conservative strategy.
There is an abundance of stable coin projects in the market, many of them experimenting with different approaches. It’s still unclear what the best path is toward a stable, widely adopted digital asset. But as the technology and the market continues to develop and mature, we’re excited to be on the front lines, helping to drive progress forward.
On December 17th CME Group, the world’s largest exchange company, launched a bitcoin futures contract. CME is the second exchange to do so, following Cboe’s bitcoin futures launch about a week earlier.
The price of Bitcoin dropped after the futures launch, from nearly $20,000 earlier in the day to $18,576.53, according to the Wall Street Journal. There were predictions that the introduction of futures would spell the end of bitcoin’s super-high prices, because skeptics would now have a vehicle for betting against the cryptocurrency.
So what does the introduction of bitcoin futures mean for the overall crypto landscape, as well as for the value of bitcoin and other cryptocurrencies moving forward?
According to Tim McCourt, Managing Director of Equity Products at CME Group, the company decided to launch Bitcoin futures based on a number of converging factors, including interest from a diverse group of traders and the recent establishment of CMEs Bitcoin Reference Rate (BRR), which provides a reliable daily price market for bitcoin.
When it comes to institutional investment, one of the most important events in the development of a new asset class is the introduction of a reliable index. An index allows investors to track their performance against that of the overall market and, perhaps more importantly, provides a relatively clear picture of overall trends in the market, making possible the introduction of derivative products such as futures contracts. While we haven’t yet seen the emergence of a definitive cryptocurrency index, the BRR can play a similar role for the bitcoin market specifically, if not the cryptocurrency market in general.
As an example of how indexes affect investment, let’s consider the Goldman Sachs Commodities Index (GSCI), which was created in the early 1990s. Before the creation of the GSCI, commodities futures were generally traded by organizations with a business stake in the physical commodities themselves. The point was to protect your business model by hedging against the supply fluctuations inherent to agriculture, not to get rich on a rising market; Wall Street was a world away. After the introduction of the GSCI, however, institutional investors began to take a real interest in commodities trading, directing large amounts of capital into futures contracts and boosting prices.
Whenever institutional investors get involved with a new asset class, there are naturally more long than short positions. Sustained capital inflows create an upward trend in the price of the asset—a trend supported by the fact that far more people are betting in favor of rising prices than betting against them. These dynamics played a significant role in the increase in grain prices after the introduction of the GSCI, and a similar trend is possible for digital assets.
Of course, the case for cryptocurrency growth is complicated by the fact that several high-profile investors, such as Jamie Dimon of J.P. Morgan and Warren Buffett, have already taken skeptical positions toward the new asset class (though Dimon has backpedaled somewhat). However, these positions seem to be more of a reaction to the hype and speculation surrounding cryptocurrency markets than a judgement on the technology itself. In our opinion, it is the usefulness of the underlying blockchain technology that makes digital assets so valuable: they bring speed, security, and transparency to transactions in a way that is distinct from any other asset class. (Again, notice the parallels with the commodities market, where financial vehicles were built on top of underlying assets with real-world usefulness.) As the hype fades away, and institutional capital becomes a larger share of the cryptocurrency market, we hope that the conversation will focus less on get rich schemes and more on underlying market dynamics, where history is our greatest teacher. When this happens, familiar trends will emerge, institutional investors will indeed go long on blockchain—pushing up prices, though not necessarily “to the moon”—and the financial system will start to reap the benefits of a new class of asset accepted on its merits as a vehicle for wealth, not its ability to make millionaires overnight.
Chinese regulatory bodies moved in September to collapse the nation’s cryptocurrency marketed, shutting down exchanges and declaring ICOs illegal. Taken together, the new regulations indicate a harsh condemnation of bitcoin and other virtual currencies, and dims hopes that China might follow other nations, including it’s neighbor Japan, in pursuing regulation that allows the blockchain industry to develop while, at the same time, protecting consumers and investors.
On September 4th The People’s Bank of China, the nation’s central bank, declared ICOs illegal, and stated that the tokens generated in these fundraising events do not have legal monetary status. While the regulation, Circular 99, sent a shock through the cryptocurrency community, it was not immediately clear whether there would be further action taken against the industry.
Less than two weeks later, the government ordered cryptocurrency exchanges to stop trading, effectively halting the commercial exchange of bitcoin and other virtual currencies. While the order did not address over-the-counter trading platforms, there were indications that peer-to-peer trading might also be challenged as the government moved aggressively to stomp out what it sees as a danger to China’s financial system.
The regulations were targeted specifically at cryptocurrency, so it is unclear what the government’s stance is toward other applications of blockchain technology. While blockchain startups trying to disrupt other industries tend to use cryptocurrency as the sole method of exchange on their platform, there are merits to distributed ledger technology without the use of publicly available tokens. It seems unlikely that this sort of blockchain industry would receive the same amount of community involvement or attention as cryptocurrencies have, but it may allow the technology to continue developing in China, albeit in a different direction.
Notably absent from the coverage of China’s decision is any mention of input from the nation’s cryptocurrency industry. This stands in stark contrast to the establishment of new cryptocurrency regulation in Japan just five months earlier. Those regulations were developed in close collaboration with industry leaders, so it’s not surprising that they were much more industry-friendly.
Another factor likely at play here is China’s closed capital account. Unlike other tech hubs such as the United States, Chinese regulation makes it difficult to transfer money into or out of China, theoretically protecting the currency from the devaluation that comes with large amounts of selling. Cryptocurrency, on the other hand, is borderless; it can easily be transferred anywhere in the world, often with a high level of anonymity. This poses a threat to Chinese regulators who want to control the flow of money into and out of China. We don’t know for sure that this is a major factor in the recent decisions, but it doesn’t seem like a coincidence that a nation with a closed capital account would take such a hard stance against cryptocurrency. Whether Chinese regulators actually stand a chance at stamping out this growing, borderless industry is another story.
On April 1st, Japan implemented the Virtual Currency Act, marking the nation as a pioneer in cryptocurrency regulation and starting an international competition to attract cryptocurrency companies. The act, which was passed by the Financial Services Agency (FSA) as an amendment to the Payment Services Act, formally defines “virtual currency” and allows the FSA to regulate and license cryptocurrency exchanges operating in Japan. While most of the conversation around the act is focused on Bitcoin, the rules are applicable to other cryptocurrencies as well.
The Virtual Currency Act recognizes virtual currency as a legal form of payment in Japan, but it does not recognize Bitcoin, or any other cryptocurrency, as a legal currency. This can be confusing, but essentially the FSA is just recognizing that cryptocurrency is used to purchase things, and saying that’s okay. The new regulations regard cryptocurrencies as assets.
The regulations also require cryptocurrency exchanges operating in Japan or soliciting Japanese users to register with the FSA. However, the agency will extend a grace period to exchanges that are currently operating in Japan, in order to give them time to complete the license application.
In some ways, the development of the new regulations can be traced back to the collapse of the Mt. Gox exchange in 2014, which wiped out $450 million worth of Bitcoin and is widely regarded as one of the biggest disasters in the brief history of cryptocurrency. Fortunately, Japan’s government didn’t use the event as an excuse to write off or condemn cryptocurrency, choosing instead to recognize the need for oversight and work with Japan’s blockchain industry to develop regulation that would protect consumers and investors without stifling the emerging industry.
By implementing the Virtual Currency Act, Japan has set off a competition among governments to lay the regulatory framework necessary to attract and retain blockchain companies and talent. The cryptocurrency industry may be global, but legislation is still local, and companies will go to whatever nation offers the most friendly set of rules. As the blockchain industry continues to expand and generate more profits, the gains in tax revenue will be significant for nations where successful companies choose to plant themselves. The intellectual capital also presents an alluring reward, especially considering that blockchain technology is still in early stages of development, and there is no universal consensus on how it should be designed. For now, Japan has set the standard for clear and business-friendly cryptocurrency regulation, and it will be up to other nations to respond.