Laos Needs Strict Crypto Regulations, Not a Blanket Ban

Laos Needs Strict Crypto Regulations, Not a Blanket Ban
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Earlier this week, Inside Bitcoins, reported that the Central Bank of Laos had issued a warning ordering the country’s citizens to stay away from cryptocurrencies.

According to the report, the ban was due to concerns of how cryptos have become a favored payment method for criminals due to its anonymity feature. To make matters worse, the country’s of countermeasures makes them tools for money launderers and terrorists. The reason for Laos’ supposed ban is quite interesting. While it is true that digital assets have always been linked to various vices, progress has also been made in curbing these crimes.

AML and CFT are Better Options

Countries have notably enforced Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) standards for crypto businesses. These measures have gone beyond the basic measures, where users are required to provide personal details before they can trade on a particular platform. The Financial Action Task Force (FATF), an intergovernmental body will finalize an international standard where exchanges and other crypto service providers would be compelled to pass customer details when transferring funds between customers.

A post from the FATF on the standards read in part:

“Countries should ensure that VASPs [virtual asset service providers] are subject to adequate regulation and supervision or monitoring for AML/CFT and are effectively implementing the relevant FATF Recommendations, to mitigate money laundering and terrorist financing risks emerging from virtual assets. VASPs should be subject to effective systems for monitoring and ensuring compliance with national AML/CFT requirements.”

While Laos is closing its borders to cryptocurrency due to the dangers without weighing up the benefits, its neighbors are doing quite the opposite. They are putting in laws to regulate the sector.

Swiss Firm Gets Crypto License in Vietnam

Vietnam, about 890 Km away from Laos, recently had a debacle with crypto bans when its State Bank issued a sweeping ban on “illegal means of payment,” including digital currencies. Things seem to have simmered down, however, as Kronn Ventures AG, a Swiss blockchain firm, is reportedly planning to open a crypto exchange in the country.

Kronn signed a memorandum of understanding with Vietnam-based distribution company Linh Thanh Group to establish the first crypto trading platform in the country. They also reportedly working with the blockchain company to create a token for the exchange. Pakistan is another Asian country that has warmed up to cryptocurrencies, having initially banned them in the past. The South Asian country is reported to be developing regulations to help create a stable crypto market, while also fighting the various vices that are attracted to the sector, per a Tribune report.

Speaking on the regulations, the Tribune quotes an anonymous said, “These regulations will help to combat money laundering and terrorism financing while it will also help regulation of digital currency throughout the country.” 

In Thailand, the government has embraced Bitcoin with both hands. It has granted operational licenses to exchanges like Bx, Bitkub, and others. It also has a regulatory framework for Initial Coin Offerings in place. At the time, the move was seen as a step towards making Thailand a blockchain hub, particularly for those in search of “regulatory havens” in light of the Chinese crypto trading and ICO ban.

So, the solution to Laos’ crypto concern is pretty simple; take regulatory lectures from some of its neighboring countries, embrace AML and CFT laws, and ensure crypto business operating in the country comply with such laws. An outright ban makes crypto illegal, it won’t stop the citizens from trading or holding cryptocurrencies.

About Jimmy Aki

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Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.