While some countries still don’t see that others are actively adapting to this new reality
By Josef Werker, spokesperson at the Noah Foundation
Since appearing in 2009, Bitcoin has become the poster child of a new economic reality that is attracting greater attention from financiers, journalists, and state authorities. It is clear that both cryptocurrencies and blockchain that made their creation possible are about to revolutionize the world.
Initially, Bitcoin’s arrival was met with a certain distrust and plenty of questions, but within a few years it became the most profitable investment, gaining 1,300% in value during 2017. The growth in popularity of cryptocurrencies in general and Bitcoin in particular forces us to rethink financial and economic systems. Blockchain has evidently become the “runway” and Bitcoin “the leap” into a new digital economy.
That new economy is here. The era of traditional economic and financial systems is coming to a close. This has not yet been fully understood by most of the world’s governmental institutions, but the most developed economies clearly see that this is an inevitable step forward and that they have to adapt to this new economic reality.
Crypto and the Law
In the United States, for example, the process of legalizing cryptocurrencies began back in 2013, and in 2016 the Supreme Court called them “literally a form of cash” and equated them with any other world currency. In 2017, the world’s largest derivative exchanges, CME and CBOT, launched trading in Bitcoin futures.
In Japan, Bitcoin has been a legal tender since 2016, and since April 2017 there has been full legislative support for cryptocurrency: the term “virtual currency” was defined and rules were established for handling such currencies.
In Germany, legal circulation of cryptocurrency has been discussed since 2013, and as of 2018 they have “private money” status and are permitted for any transactions subject to standard VAT.
In the UK, the financial regulator, the FCA, supports the circulation of cryptocurrency, although their circulation does not yet have the proper legislative basis. But taxes are already being levied on Bitcoin there, and the Bank of England intends to issue its own cryptocurrency in 2018.
In France, financial regulators have already issued statements that they are working to develop their positions regarding cryptocurrencies, and the use of tokens in the country is not prohibited.
In Canada, not only are cryptocurrencies legal and subject to taxation, but Bitcoin vending machines are permitted.
In India, the situation is uncertain due to the Reserve Bank’s decision to ban banks and financial institutions from dealing with cryptocurrencies. Yet despite that crypto trading volume in the country is on the rise. In early May, Bitcoin prices jumped to 618,000 rupees ($9,270) which is 76 percent up from the rate recorded during the central bank’s announcement a month ago.
Investors hope the government will not ban trading in crypto but even if formal channels cannot be used, people will move to crypto-crypto trading platforms, said Shivam Thakral, head of cryptocurrency exchange BuyUcoin.
Why do I mention these countries in particular? As of 2018, these countries account for over 50% of the world economy, or about $42 trillion versus $75.2 trillion for the world as a whole (according to IMF data). All of these countries are in the top 10 by nominal GDP.
The only one missing from this list is China, which accounts for over 20% of the world economy, which is over $14 billion. There, the circulation of cryptocurrencies is prohibited for organizations, but at the same time China has the largest cryptocurrency market in the world, since average citizens of that country can exchange virtual currencies amongst themselves, which they do quite readily. For now, cryptocurrencies are not welcome in the country at the governmental level, there is a chance that the authorities in China will soon recognize the need to legalize the crypto field.
Cryptocurrency circulation is not prohibited in Cyprus, Finland, Switzerland, the Czech Republic, Denmark, Sweden, Norway, and many other countries. Singapore is even considering transitioning its national currency to a digital format based on Ethereum.
The Digital Economy Will Come from Asia
In general, the markets in Southeast Asia are very open to innovation. As previously mentioned, Japan, China, and Singapore are on the front lines of the crypto movement, and many crypto startups have Asian roots. That is why, in developing our strategy, our fund – Noah Foundation – settled in this particular region. We decided to get a bit ahead of world trends and start right away in creating an urban environment where crypto and blockchain technologies will be widely used and developed. It is in Asia where the tech-savvy cities of the future are being built, fully automated and managed by a few people. This includes Masdar in Dubai and Songdo in South Korea. We will be building our crypto city in the Philippines.
This country’s economy has been growing well in the last few years, and it has good potential for developing innovation: a large share of young people in its population, a rapidly growing middle class, and a high level of IT penetration. There is a lot of interest toward this country, especially in Japan.
That was why in 2016 we founded the Noah Project, which was initially intended to create new opportunities for business between citizens of these two countries. The Noah Project forms the whole new ecosystem for life and business based on blockchain. Its foundation is built on Noah City, a hub where cryptocurrency will be the primary form of payment. It will be located in the new Horizon Manila business district in Manila, Philippines.
We have issued Noah Coins (NOAH), which are tokens that will circulate in this urban environment, and have also been developing a special virtual crypto wallet. We plan for NOAH token holders to have special privileges, including discounts, cash back, and loyalty programs. In the not-so-far-off future Noah Citycan become the main global hub for all cryptocurrency acolytes, where any organization can transact in tokens, including those working B2C, such as stores, restaurants, and hotels.
It will be the world’s first experiment in implementing a real digital economy. We think that it will become a model for the entire world: Noah Project (https://t.me/noahproject_community) will demonstrate for all what the future can look like.
About the author
Josef Werker is the spokesperson for Noah Foundation – a parent organization of the Noah Project that is contributing to the creation of crypto hub in the Philippines and the world’s first crypto city. A graduate of the Cambridge University, Josef is also the Co-Founder of Media Werx and Managing Director of Penbrothers. An expert in business development and operations in Asia, he was previously the Account and Operations Manager of Jardine Engineering Corporation (Philippines).