Regulation
Cryptocurrency Regulation 2024: 5 Key Updates You Need to Know
Cryptocurrencies They are not as new as they were a few years ago, but they certainly retain the feel of a new and complex concept for regulators around the world. Therefore, the laws and rules on these assets are still a work in progress everywhere, with some already in place, some yet to come, and some still evolving along the way.
So far, several jurisdictions have weighed in on the issue, changing the rules for many cryptocurrency users and businesses in their territories. It is always important to stay up to date with these developments, considering that they could directly impact us and our cryptocurrency funds. So, let’s take a look at some notable regulatory updates for the cryptocurrency industry around the world in 2024, so far.
Stablecoins and MiCA
The Markets in Crypto-Assets (MiCA) regulatory framework is not exactly new, having been proposed in 2020 and approved in 2023 for all European Union member states. However, this year is crucial for its life cycle, being the implementation phase and coming into force from December 2024.
This regulation serves as a comprehensive guide for cryptocurrency service providers (CASPs) in the EU, aiming to strike a balance between encouraging innovation and protecting investors. Licensed financial entities must inform national authorities about their cryptocurrency activities, while unlicensed entities must go through a rigorous licensing process. MiCA also ensures that CASPs effectively handle customer complaints by requiring clear, accessible and annually reviewed procedures, adequate resources and qualified staff to handle issues promptly and fairly.
It goes without saying that CASPs, by definition, are centralized entities, even if they operate decentralized cryptocurrencies or crypto platforms.
A critical point of the law concerns stablecoinsof course, and it has caused concerns among major suppliers, namely Tethering (USDT) AND USD Coin (USDC)**Under MiCA, stablecoin issuers not tied to European currencies must cease issuance if daily transactions exceed €200 million, to prevent private entities from encroaching on the euro’s role. Both USDT and USDC, for example, far exceed that daily limit. \ 
Furthermore, even if they are tied to European currencies, they must meet strict requirements and obtain an appropriate license to operate. Starting in June 2024,only Circle (USDC issuer) has acquired an Electronic Money Institution (EMI) license to continue operating in the EU, while Tether Limited has not yet attempted to do so.
As a result, several cryptocurrency exchanges have started to delist this asset for their EU customers, while Tether it is expected that they to use it as a transactional gateway and not allow direct exchanges with fiat. The specific MiCA rules for stablecoins began to take effect on June 30, 2024.
Against a USD CBDC and Surveillance
Central bank digital currencies (CBDCs) can be a touchy subject for many people. Some of them (not all) are, technically, cryptocurrencies in the sense that they are built on Distributed Ledger technology (DLT) and available for transactions worldwide. However, they are also currencies completely controlled by governments, and concerns about surveillance and censorship around them have arisen more than once.
According to Atlantic Council“134 countries and currency unions, representing 98% of global GDP, are exploring a CBDC,” but most of them are in the research or pilot phase, and only three have successfully launched one as of May 2024. The other 17 are dormant, and at least two projects have been canceled. The United States joined this year as the third bill canceled because the House of Representatives passed a law banning the Federal Reserve from issuing a USD-denominated CBDC. This would make the United States the first country to ban its (potential) CBDC entirely due to oversight concerns.
Deceptive practices and data breaches have been reported, raising further questions about the project’s security and ethical implications. Here’s why it has been questioned by regulatory bodies in more than ten countries, and directly banned in Kenya, Portugal, Spain, Hong KongAND probably Italy.
FIT21 and self-custody in the USA
In addition to the ban against CBDCs, regulators in the United States have been very busy this year. Perhaps one of the biggest developments surrounding cryptocurrencies has been the Financial Innovation and Technology for the 21st Century Act (FIT21). This bill establishes a clearer regulatory framework for digital assets and gives the Commodity Futures Trading Commission (CFTC) authority over decentralized digital assets. and the authority of the Securities and Exchange Commission (SEC) over centralized ones.
In other words, the CFTC would govern digital commodities (most cryptocurrencies), while the SEC would only oversee those considered securities. New, clear definitions would be put in place so that every industry player knows what rules will be followed. FIT21 has been approved by the House of Representatives in May. The next steps for the bill to become law include passage in the Senate, where it will undergo further consideration, and then it will need to be signed by the President. The Biden administration has expressed opposition to the bill but has not threatened to veto it.
On the other hand, serious concerns about self-custodial wallets have been quite annoying for different suppliers to leave the country and its citizens. Acinq, Phoenix and Wasabi have withdrawn from the United States, while the Department of Justice (DOJ) he accused Samourai Wallet founders accused of money laundering due to that software, just as they had previously accused the founders of Tornado Cash. Probably in reaction to this, the states of Oklahoma and Louisiana they have approved their own bills to protect the self-custody rights of cryptocurrencies in their jurisdictions.
AML/KYC and new licenses
In 2021, as evidenced by a cryptocurrency regulation reportMost countries around the world already had AML/KYC rules and procedures in place for cryptocurrency exchanges. The number has only increased over the years, and sometimes new regulations have been added that are related to the former. This can be boiled down to proper customer identification for all cryptocurrency companies and the requirement for cryptocurrency users to share their identity and documents when trading with fiat currencies.
In addition, stricter requirements and licenses for cryptocurrency service providers have emerged. This is the case in Turkey, where the parliament has approved the bill on Amendments to the Capital Markets Act in June 2024. This framework now requires cryptocurrency service providers to obtain authorization from the Capital Markets Board (SPK) for establishment and operation, with technological criteria established by TÜBITAK (Scientific and Technological Research Council of Turkey). It introduces definitions for cryptocurrencies and service providers, requires independent financial audits, and imposes severe penalties for unlicensed operations.
Other countries, for their part, have introduced or modified their own AML regulations for cryptocurrencies this year. Among them, we can mention Singapore, Argentina, Kenya, Taiwan, India, Costa Ricaand even the European Union. In the last caseaim for tougher measures, whereby cryptocurrency service providers will have to apply the same AML rules as banks for transactions above €1,000. At the very least, they do not explicitly impose these rules on self-custody wallet providers.
Cryptocurrency bans come and go
Starting from September 2023, according to the Atlantic CouncilThere were at least 9 countries with a blanket ban on cryptocurrencies. One of them was Bolivia, and there is actually good news about it. In June 2024, the Central Bank of Bolivia (BCB) lifted a four-year ban on cryptocurrency transactions, allowing financial entities to use cryptocurrencies under new regulations.
This decisioncarried out in collaboration with the Financial System Supervisory Authority (ASFI) and the Financial Investigations Unit (UIF), it follows the recommendation of the Latin American Financial Action Task Force (GAFILAT) to regulate Virtual Asset Service Providers in the country. The BCB aims to modernize the country’s payment system, improve financial infrastructure and promote digital financial inclusion.
On the other hand, the Central Bank of the United Arab Emirates (UAE) has discussed issuing payment token services regulations aimed at licensing stablecoins, requiring that such tokens be backed by UAE dirhams and not linked to other currencies. For crypto advocate Irina Heaverthis could imply a practical ban on cryptocurrency payments within the country. The results of this discussion and subsequent comments are yet to be seen, however.
Obyte as a safe place
We can say that InhabitantBuilt on a Directed Acyclic Graph (DAG) system, it is positioned as a robust platform resistant to surveillance, seizure of funds, and censorship attempts. Unlike blockchain structures, Obyte’s miner-free DAG architecture allows for fully decentralized data storage and transaction validation, making it inherently resistant to centralized control.
This setup ensures that no single entity can disapprove, seize, or censor transactions, preserving user autonomy and providing privacy features. The platform’s focus on user control is further strengthened by the use of human-readable content smart contracts that run autonomously, without the need for intermediaries or encryption, reducing vulnerabilities to censorship attempts.
Leveraging its DAG technology, Obyte improve decentralization and autonomy, making it a potentially safer ecosystem for users concerned about privacy and security. This combination of features positions the ecosystem as a promising solution for those seeking a cryptographic platform that prioritizes user control and resilience against outside interference.
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