One of the smallest countries of the world, the Republic of San Marino has issued a new regulatory policy for companies powered by blockchain technology.
Nicola Selva and Michele Muratori, the captains regent of the Republic of San Marino country have addressed a new governmental rule on token and token offerings, reports according to documents.
The new law mentions, blockchain organizations of the Republic of San Marino or a European country or any other country not rated as ‘high risk’ and determined appropriate within the scope of San Marino legislation, can apply to register with the institute.
The new law issued by the captains regent highlights the steps for registering a blockchain powered business in the Republic of San Marino. Any blockchain based organization within the legislative scope of San Mario, now need to follow the procedures issued by the Republic of San Marino to register itself with the ‘Istituto per l’lnnovazione della Repubblica di San Marino’ or with San Marino Innovation Institute. More countries are now approaching news techniques to register blockchain technology businesses in their country by issuing regulations.
The institute offers a set of services to blockchain based organizations such as regulatory safety along with supervision, further ensure those regulations and provide an anti-money laundering (AML) policy especially for initial token offerings or initial coin offerings (ITOs or ICOs).
In accordance with Initial Token Offerings, the institute will differentiate the utility tokens and security tokens by stating as follows, for purchasing services or goods provided by the blockchain organization utility tokens will be considered as vouchers and Security tokens will be considered as digital assets that act alternatively, on the basis of following two instruments namely:
a) Participating instruments of the issuer and
b) Debt securities of the issuers’
Apart from these, governmental law adds tax policies for both the tokens, utility tokens, and security tokens. Moreover, utility tokens will be considered as an international currency for tax objectives, and Security tokens will be considered as debt securities or participating equity instruments, mostly depends on the type of security token.
Income tax standards will eventually exclude both the tokens, utility tokens, and security tokens for generating income through activities by using the tokens.
A crypto source reported the law was originally introduced on February 28, 2019, in Milan, Italy.