Cryptocurrency Regulations Roundup
Summary:
- The total market cap of digital currencies is $1.7 trillion and over $90 billion worth is traded every day. Source: https://coinmarketcap.com/
- The article briefly touches upon crypto regulations since March – Kraken’s new operating license in Abu Dhabi, Ukraine’s cryptocurrency legalization, New York’s two-year crypto mining embargo, and much more
FLUID has compiled a list of the most important headlines from the past couple of months, including Kraken’s new operating license in Abu Dhabi, Ukraine’s cryptocurrency legalization, and New York’s two-year crypto mining embargo.
The Americas
New York State Assembly Passes Bitcoin Mining Moratorium
- The New York State Assembly enacted a two-year ban on bitcoin mining, pending an assessment of its environmental effect.
- If the bitcoin mining embargo goes through, it will be the most comprehensive piece of legislation of its sort in the world.
Central Bank of Cuba To Structure Digital Assets in the Country
- The Cuban central bank sought to organize digital assets in the country in April.
- Following a review of the project’s legality and commercial interest, the apex bank declared in an official gazette that it will begin awarding licenses to virtual asset suppliers.
Argentina Announces Buenos Aires Will Employ Blockchain Technology
- Argentina’s announcement that Buenos Aires will use blockchain technology to simplify its operations sent shockwaves across the sector.
- The mayor of Buenos Aires, Horacio Rodriguez Larreta, has said that the city will soon begin taking cryptocurrency tax payments.
President Biden Signs the Executive Order on Ensuring Responsible Development of Digital Assets
- The growth of digital assets presents an opportunity for the United States to strengthen its leadership in the global financial system and on the technology frontier, but it also has significant consequences for consumer protection, financial stability, national security, and climate risk.
- President Biden issued an Executive Order detailing the first-ever, whole-of-government strategy to tackling the dangers and realising the potential advantages of digital assets and the technology that underpins them.
- Consumer and investor protection, financial stability, illicit financing, U.S. leadership in the global financial system and economic competitiveness, financial inclusion, and responsible innovation are among the six primary themes outlined in the Order.
The Middle East and Africa
Dubai Enacted Law No. 4 of 2022 on the Regulation of Virtual Assets (“VAL”) and Established the Dubai Virtual Assets Regulatory Authority
- In February this year, Dubai rolled out the Regulation of Virtual Assets law (or VAL), and formed the Dubai Virtual Assets Regulatory Authority (VARA) to enhance the Emirate’s commitment to creating a digital asset-friendly ecosystem.
- This groundbreaking regulation represents Dubai’s goal to become one of the leading jurisdictions for entrepreneurs and investors in blockchain technology by creating a legal framework for enterprises linked to virtual assets.
Kraken Gets Licensed to Operate in Abu Dhabi after FTX and Binance
- At the end of April, Kraken became the latest exchange to be granted a license to operate in Abu Dhabi after FTX and Binance.
- Given the positive legislative climate in Abu Dhabi, Three Arrows Capital, a leading cryptocurrency hedge fund has moved its headquarters from Singapore to Dubai. “The energy in Dubai’s digital asset industry is electric right now,” said Su Zhu, co-founder of the hedge fund as more projects set their sights on the region.
Binance Has Been Granted a License to Operate as a Crypto Asset Service Provider In Bahrain
- Binance has been given a licence to operate as a crypto asset service provider in Bahrain, the first of its type in the Gulf nations, bolstering the company’s presence in the region as its trading platform receives more scrutiny from banking regulators abroad.
- Binance said the regulatory approval permits it to provide consumers crypto asset trading, custodial services, and portfolio management.
The Central African Republic (CAR) Becomes the Second Country To Adopt Bitcoin as Legal Tender
- According to President Faustin-Archange Touadera’s administration, CAR has embraced bitcoin as its official currency, making it the first in Africa and just the second in the world to do so.
- The action, according to Touadera’s chief of staff, is “a crucial step toward opening up new chances for our country.”
- According to a Thomson Reuters Foundation article, the Central African Republic (CAR) became the world’s second country to embrace bitcoin as legal cash on April 27, following El Salvador. This puts the African nation – one of the world’s poorest – in the spotlight.
Europe
Ukraine Legalizes the Crypto Sector
- Amidst the ongoing war against Russia, Ukraine legalized the crypto sector. President Volodymyr Zelensky signed a law to this effect on March 16, 2022.
- “From now on, foreign and Ukrainian cryptocurrency exchanges will operate legally and banks will open accounts for crypto companies. It is an important step towards the development of the VA (virtual asset) market in Ukraine,” the Ministry of Digital Transformation of Ukraine tweeted.
Bank of England Sketches Out First Regulatory Approach To Crypto
- The Bank of England has begun drafting the UK’s first regulatory framework for crypto assets, stating that while the industry is currently insignificant in volume, its rapid expansion might pose future dangers to financial stability if left uncontrolled.
- Concerns that crypto assets might be used to avoid financial restrictions placed on Russia since its invasion of Ukraine have prompted regulatory scrutiny.
EU Reviews Regulatory Framework for Crypto
- On March 14, the European Parliament approved a version of the Markets in Crypto Assets bill, or MiCA, that did not include wording that would have essentially prohibited proof-of-work cryptocurrencies. The bill is presently being discussed with the European Commission, the European Union Council, and the European Parliament.
- The European Parliament approved a version of the Markets in Crypto Assets bill, or MiCA, that did not include wording that would essentially outlaw proof-of-work-based cryptocurrencies.
Binance Gets Approval to Run Exchange in France
- The world’s largest cryptocurrency exchange by trading volume has been granted a regulatory license to operate in France.
- Binance France was granted permission to register as a digital asset service provider by the European country’s regulator, marking the first time Binance has been allowed a license to operate a significant crypto exchange in a European market in accordance with the legislation.
EU Official Calls for Global Crypto Regulations
- Cryptocurrencies, according to Mairead McGuinness, a European Union financial services commissioner, should not be left uncontrolled.
- The official addressed the hazards associated with bitcoin investments in a piece published by The Hill, including the use of cryptocurrencies to escape sanctions and the consequences on financial stability.
- “I believe that the EU and the US can together lead the way on a shared international approach to regulating crypto. Together, we can enable innovation in finance while protecting consumers and maintaining financial stability,” McGuinness wrote.
Asia-Pacific
South Korea Elects ‘Crypto-Friendly’ President.
- South Korea has elected a ‘crypto friendly’ president. The newly elected President of South Korea, Yoon Suk-yeol, is a crypto evangelist and even used NFTs in his election campaign.
- The newly-elected president stated that he would examine the 2017 ban on initial coin offerings (ICOs), and also raise the capital gains tax threshold on cryptocurrencies.
Indonesia Imposes Crypto Taxes
- On April 1, the Indonesian government announced the application of a 0.1 percent income tax on cryptocurrency earnings and a 1 percent value-added taxon cryptocurrency sales.
- Hestu Yoga Saksama, Director of Tax Regulations at the Ministry of Finance, stated to CNN Indonesia that the Indonesian government has chosen to tax capital gains from cryptocurrency investments at 0.1 percent.
- Value-added tax (VAT) on crypto purchases would be levied at the same rates. Both taxes would take effect from May 1. The administration is still working on putting tax laws in place.
The People’s Bank of China Aims to Become the First Major Central Bank to Issue a CBDC
- In 2020, the PBoC concluded a large pilot project for a central bank-backed digital yuan, under which it distributed ‘red envelopes’ – a reference to China’s traditional way of gifting cash – in the form of online wallets containing 200 digital yuan ($29.75) each to 50,000 randomly selected consumers.
- The People’s Bank of China is aiming for widespread domestic use of the e-CNY, or digital yuan, in 2022.
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