Regulation
REALITY CHECK | A look at how crypto regulations are progressing across the world in 2024 – BitKE
Last May [2023] in an article entitled “Ways of regulating crypto-assets: a global approach“, the World Economic Forum (WEF) has highlighted the need for countries to harmonize their cryptocurrency regulatory frameworks despite the challenges involved.
“As with certain other emerging technologies, the regulation of this ecosystem [crypto-assets] It’s like walking a tightrope: it requires a delicate balance between preventing harm, protecting users and promoting innovation,” said Arushi Goel, author of the paper.
Since then, the WEF has updated its findings, tracking how different countries and economic regions have dealt with the challenges of introducing crypto regimes.
The Challenges of a Comprehensive Approach to Crypto Regulation
- Different jurisdictions do not have universally agreed upon taxation systems, classifications and definitions for crypto asset markets. Participants in crypto trading are often hampered by misunderstandings and have a poor understanding of financial risks.
- Arbitrage is the practice of buying cryptocurrencies from one entity and selling them almost immediately to another. The idea is to take advantage of marginal price variations between different jurisdictions whose financial frameworks are not synchronized and develop independently. Of course, this poses a headache for regulators in these different jurisdictions, who must apply different tax codes and legislative guidelines to such transactions. This further hinders the development of holistic oversight across the entire crypto ecosystem.
- Insufficient coordination among multiple law enforcement agencies hampers policing, monitoring and supervision of the crypto industry, thereby hindering the establishment of consistent and seamless regulatory frameworks.
Some countries and/or regions have attempted, with varying degrees of success, to address the challenges of establishing regulatory frameworks for crypto assets.
The WEF has noted the following updates in countries or regions since the publication of its white paper:
US Crypto Regulation Updates
Although the WEF noted that progress in US crypto regulation is currently at a standstillthe following results were obtained:
Crypto Regulation Updates in the EU
- The EU has started to introduce the Markets in Crypto-Asset Regulation (MiCA) in June 2023, and is the first economic region or country to develop and implement a comprehensive regulatory framework for cryptocurrencies.
- The EU’s supervisory and regulatory body, the European Securities and Markets Authority (ESMA), has reached a three-month agreement public consultation period on aspects of the implementation of MiCA at the end of April 2024.
- The EU hopes fully integrate MiCA under the economic region’s cryptocurrency regulatory framework in December 2024 and, from January 2026, all cryptocurrency trading service providers must verify and disclose the identity of all original senders and destination beneficiaries, regardless of the amounts exchanged.
UK Crypto Regulation Updates
- The Financial Conduct Authority, with which entities wishing to trade cryptocurrencies must be registered, and the Bank of England (BoE) have both took firm positions on the regulation of stablecoins.
- The BoE believes that this regulation will increase the convenience of British consumers while preventing financial crime.
For another perspective on how the US, EU, and UK approach crypto regulation, click here.
Crypto Regulation Updates in Asia
Asian countries’ approaches to crypto regulation are numerous and varied. Some examples are:
- Japan recognizes crypto as legal tender, and a recent novelty identification rules stock exchange transactions aim to combat money laundering.
See also
- India banned crypto trading in 2020, but since then, progress has stalled. However, the proposed law on cryptocurrency and regulation of official digital currency is promising.
- China currently has a Pure and simple ban on cryptocurrencies.
Crypto Regulation Updates in South America
Meanwhile, in South America, Brazil took action towards crypto regulation in June 2023.
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