Exclusively for Covesting: Interview with Dmitry Filatov, Crypto Expert, on Future of Cryptocurrencies

 

 

 

 

 

Dmitry Filatov, a crypto expert and the founder of MatrixCIB, ICORating, Topface, answers a few questions on the future of cryptocurrencies exclusively for Covesting

What country has the most progressive approach to handling cryptos?
 
The approach of governments to regulation of cryptocurrencies is rather disjointed and separated: some are in favor of the industry, others oppose cryptocurrencies or refrain from getting involved and choose to observe. 
 
It is still too early to determine what government proposes the most progressive approach. Three to four years should pass before the impact of regulation on the market can be seen and any conclusions can be made on whether certain approach have succeeded or failed.
 
Most of the countries, where the cryptocurrency space is regulated, apply their existing legislation to the cryptocurrency industry. However, there are cases, when a government creates a completely new legislation for cryptocurrencies and blockchain. For example, Gibraltar is the first jurisdiction to introduce a Distributed Ledger Technology regulatory framework. This means that firms in Gibraltar that use DLT to store or transmit value belonging to others, now have to apply for a license from the Gibraltar Financial Services Commission.
 
How will crypto bans impact the cryptocurrency industry?
 
In our view, pioneers of the cryptocurrency industry are not affected by bans as much as institutional players. Bans on cryptocurrency will prevent an inflow of capital from institutional investors who are subject to strict regulations and may not invest in unregulated and outlawed products.   
 
How do you think cryptocurrency legislation will develop in the near term? And in the long term?
 
In the short term, governments will decide whether they are against or in favor of the cryptocurrency industry and will come up with solutions on how to regulate the industry. In the long run, after receiving feedback from the market participants, the governments may work on improvements of regulations they have previously proposed and on bringing clarity how to comply with such legislation.   
 
Can cryptocurrencies become an alternative to fiat in terms of legislation?
 
Theoretically, yes. However, in reality, each government sees their own national currency as an element of sovereignty. The use of foreign currency, or cryptocurrency, by citizens of a certain country may be considered as a threat to domestic currency and, thus, economic sovereignty of the country.
 
What civil law trends related to cryptocurrencies could you identify? What changes in the civil law would be desirable in terms of cryptocurrencies?
 
The main debate is whether cryptocurrencies should be treated as “property” or as a “currency”. The former approach causes additional VAT and capital gains tax issues. The latter approach would eliminate the issue with VAT, because operations with currencies are not subject to VAT.  

This interview has been published for informational purposes only, with no intent to advertise any products or services. The opinion expressed in the article may be different from the opinion of the Covesting's editorial board.