[News release period: February 2 – February 10, 2019]
A lot has happened on the tokenisation front around the world in the week of February 2 to February 10, 2019. Most notably, the governments in many significant regions announced new cryptocurrency and token regulations which will give the much-needed boost to the economy. Here’s a look at the most important updates on tokenisation.
South Africa Amends Crypto-asset Laws
In a significant development from Africa, Cyril Ramaphosa, the South African President, signed the Taxation Laws Amendment Act earlier in February. With this amendment, crypto-assets, including security tokens will now be classified as “financial instruments” rather than being considered currency. As far as tax matters are concerned, these instruments will be afforded the hobby status.
It is important to note that the region has demonstrated a lot of interest in cryptocurrencies and digital tokens. The recent initiatives by the government are likely to boost activity in the space. These will also welcome more investors into this ecosystem and increase interest in security tokens as well.
New Digital Token Regulations In The Philippines
The Cagayan Economic Zone Authority (CEZA), which regulates Philippine’s Cagayan Special Economic Zone and Freeport has plans to establish a blockchain hub and attract the attention of international investors. Touted as Philippine’s Silicon Valley, the regulator has announced new regulations that will establish a legal framework to protect the interests of investors.
Called the Digital Asset Token Offerings (DATO) laws, these will establish the regulations to be observed when issuing and acquiring crypto assets which include both security and utility tokens. Under the DATO regulations, companies desirous of issuing their own security and utility tokens must first ensure that the requisite DATO documentation is in place including the details about the project, the issuing agency, the advisory, and experts’ certification.
Stock Exchange of Thailand Plans Security Token Trading
The SET (Stock Exchange of Thailand) has sought approval for trading security tokens by planning to obtain a “Digital Assets Operating License” from the country’s Finance Ministry. The SET has plans to launch its security token exchange.
This move places Thailand at par with other nations including Singapore and Malta that are striving to emerge as security token trading hubs. SET, it appears, will soon catch up with the Malta Stock Exchange and might even emerge as the winner with a first of its kind security token trading platform.
Clarification From SEC: Security Tokens
This is in line with the popular opinion that utility tokens that are functional are not likely to be called securities.
With this clarification, it has now become evident that it is important for companies planning ICOs to consider the way their tokens are structured.
Governments around the world are now taking concrete steps to establish the necessary legal framework for the crypto and security token space to mature.