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The German Burger King accepts payment in cryptocurrencies; IMF Managing Director urged regulators to ease the pressure. VanEck and SolidX have found a way to launch Bitcoin ETF in circumvention of SEC.
Visitors of Burger King restaurant chain will be able to pay in bitcoins. The company’s mobile application now has the opportunity to pay in cryptocurrency for lunch; however, there are still some restrictions. This chain has more than 10,000 restaurants around the world, but only buyers from Germany report such an innovation.
Back in 2017, Burger King has first received payment in cryptocurrency from its visitors, while the company noted the complexity of such payment method. There are no difficulties from a technical point of view, but some legal conflicts arise in matters of taxation. Each country adheres to its own position in relation to cryptocurrencies. In some countries, this asset is considered a commodity, while in others it is equated with money.
In late August, the British court declared cryptocurrency to be a property. A situation that actually forced to take such a step arose in course of the proceedings on theft of 100 BTC. Earlier, bitcoin was considered to be information data, thus and so, in case of their theft, the rightful owner could not demand the stolen data return.
It seems that so far Burger King has been able to solve legal issues in accepting bitcoins with the German authorities only. In these days, Europe showed itself to be the most comfortable place of living for cryptocurrency followers. For example, PricewaterhouseCoopers (PwC) starts to accept bitcoins to pay for services. However, there are some difficulties here in working with cryptocurrency.
The consulting company is included in the Big Four of the industry. It operates in 168 countries around the world. As of today, it was only PwC’s Luxembourg division which decided to response to customers’ requests and start working with cryptocurrencies. It became possible by means of cooperation with the local exchange, which will convert digital financial assets into fiat money.
During the meeting with members of the Committee on Economic and Monetary Affairs of the European Parliament, Christine Lagarde, the Managing Director of the International Monetary Fund, urged regulators not to put pressure on cryptocurrencies. The primary goal of authorities is to protect the consumers’ interests, and the legislative cryptocurrency oppression leads to the opposite result.
However, the attitude of IMF Managing Director to cryptocurrencies is constantly changing. In 2018, Christine Lagarde declared that digital financial assets did not pose a threat to the global economy. However, as early as May 2019, she said that a distributed registry could “arrange a shake-up that would lead to a loss of stability.” Now, the point of view has changed again, and IMF has sided with the cryptocurrency supporters.
It is expected that on November 1, 2019, Christine Lagarde will take up a position of the Head of the European Central Bank. This became known back in July, after a statement of Donald Tusk, the European Council President.
Such a certain flexibility of Christine Lagarde is a reaction to world events. After the publication of Libra White Paper, the US lawmakers literally turned against cryptocurrencies as they felt a quite real threat to dollar’s financial dominance. At the same time, the European authorities toned down the rhetoric.
Despite they expressed their concern and called for tightening control over cryptocurrencies, no steps have been really taken in this direction. Moreover, the Libra Association has established its headquarters in Geneva, Switzerland, which will bring certain benefits to the country in future. Perhaps, moving forward, the company will become one of the largest taxpayers in the country. That is, the more loyal the authorities are to cryptocurrency projects now, the more likely they are to be among the financial leaders in future.
VanEck Securities Corp. and SolidX Management investment companies plan to launch bitcoin ETF contracts in a limited mode this week. They used SEC 144A rule, which allows trading without regulator’s permission. Although, in this case, no retail buyer will be able to take advantage of this offer as it is designed for banks and hedge funds only.
When SEC once again postponed the decision on admission to trade for Bitcoin ETF fund on August 12, the investors expressed legitimate doubts on the prospects of this financial product. The next hearing is scheduled on October 18, but it is unlikely to lead to a positive result.
VanEck and SolidX representatives stated that they hoped to convince the regulator to issue permission for a full launch. Testing the product will make it possible to ensure its safety for investors in practical terms.
At this time, SEC has not approved a single application for the work of ETF funds linked to bitcoin. It assumed a hardline stance which has no logical explanation. Authorities raise claims on pricing mechanisms and require special conditions for risk hedging and custodial services. Meanwhile, similar financial instruments have been already functioning for quite some time now.
For instance, back in November 2019, the Exchange Traded Product (ETP) was launched on SIX Swiss Exchange. ETP created on a basket of five cryptocurrencies is quite popular. It is based on Bitcoin, XRP, Ethereum, Bitcoin Cash ABC and Litecoin, which most fully reflects the combined value of cryptocurrencies. For all that, despite this instrument is subject to serious volatility, investors have still no complaints about trade technical component.