BANKEX is realizing a project under unstable conditions in the international legal field. We reviewed the changes taking place in the legislation of various countries relating to the use of blockchain technology and cryptocurrency.

An increasing number of countries are, on the level of regulators and national banks, developing regulation for the introduction of blockchain technology, smart contracts, tokenization of assets etc., considering their convenience, low cost and high speed. Some countries, on the contrary, lack effective mechanisms and are hindering the development of blockchain technology. In most countries of the world, smart contracts are currently not even partly regulated on the legislative level. A detailed report on the legalization of Bitcoin in various jurisdictions was produced in 2014 by the U.S. Library of Congress [1]. In the European Union, the NASDAQ stock exchange and the Deutsche Borse in Frankfurt commissioned research into the use of blockchain technology in stock markets, and an analysis of the legal basis for crypto-asset circulation in line with articles of the Uniform Commercial Code [2]. This article provides current information on the main actors influencing the implementation of cryptocurrencies and blockchains into the global financial system.

Japan has pioneered the legalization of smart contracts, blockchain and cryptocurrencies, where, over a period of seven years, Bitcoin is in circulation while the blockchain is used for property accounting [3]. The technology was definitively legalized in Japan in 2017. The Japanese government is currently actively implementing fintech technologies in capital-intensive industries.

China was initially on the path towards legalization of the technology, but, due to the large amount of miners, issued a ban and, after some time, relaxed the ban. Currently, China has partly legalized money transfers in Bitcoin between China and South Korea [4] and smart contracts. Chinese leadership realizes the necessity of developing a modern financial system, but the active implementation of technology is hindered by a lack of trust in the flawlessness of the code as well as conservatism, traditionalism, prejudice and legal limitations. [5]

Vietnam declared Bitcoin illegal in 2014, but has now begun the partial legalization of smart contracts and cryptocurrencies [6]. The prime minister of Vietnam has announced that the country will recognize Bitcoin as a legal means of payment in August 2018, and relevant institutions have been tasked with preparing documentation and working out a taxation mechanism for this purpose.

The United Arab Emirates have discussed the necessity to implement and legalize smart contracts in parliament, but for now, only the decision to not ban Bitcoin has been reached [7].

Australia is currently seeing the broadest use of blockchain technology in corporate finance, with the Australian Securities exchange having announced in January 2016, in Sidney, its intent to rework its clearing and settlement systems to employ blockchain technology. On the other hand, the financial scandal involving the Commonwealth Bank of Australia — the largest Australian bank — is putting pressure on the government to tighten regulation [8]. The political leaders of Australia are nonetheless planning to approve Bitcoin as an official currency to strengthen the competitiveness of the Australian financial system.

As recently as 2013, the European Union warned its member states of the tax evasion, fraud and misuse risks posed by cryptocurrencies.

In the USA, following a Congressional report on the necessity of legalizing blockchain, the decision was made to adopt a law on the taxation of cryptocurrencies like Bitcoin. In Arizona in February 2017, authorities discussed a draft bill proposing to recognize the legitimacy of signatures stored in the blockchain [2].

Using the blockchain for share ownership registration will help solve many problems relating to the storage of shares and recordkeeping of ownership. As blockchain keeps developing, it will be able to execute self-fulfilling smart contracts such as share options owned by both employees and external investors.

Developing markets may become the first to recognize the possibility of implementing and developing blockchain technology for the integration of stock and capital markets. The legalization of blockchain technology will increase the reliability of existing accounting methods and raise trust and transparency in relations with both investors and market regulators, as well as the penetration of information technology into business.

But. BANKEX Proof-of-Asset Protocol is working regardless any change in legislation. It requires changing only the part of the smart contract that is subject to the change, without a need to amend the entire protocol. So, BANKEX can work with any country.