Regulation
REALITY CHECK | A look at how cryptocurrency regulations are progressing around the world in 2024 – BitKE
Last May [2023] in an article titled “Pathways to crypto-asset regulation: a global approach“, the World Economic Forum (WEF) has highlighted the need for countries to harmonize their regulatory frameworks on cryptocurrencies despite the challenges involved.
“As with some other emerging technologies, they regulate 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 study.
Since then, the WEF has updated its findings, keeping pace with how different countries and economic regions have addressed the challenges of introducing crypto regimes.
Challenges for a comprehensive approach to cryptocurrency regulation
- Different jurisdictions do not have universally agreed upon taxation systems, classifications and definitions for cryptocurrency markets. Cryptocurrency trading participants 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 profit from marginal price variations between different jurisdictions that have unsynchronized and independently developing financial frameworks. Naturally, this is a headache for regulators in those different jurisdictions who must apply different tax codes and legislative guidelines to such transactions. This further inhibits the development of holistic oversight across the crypto ecosystem.
- Insufficient coordination between multiple law enforcement agencies impedes control, monitoring and supervision of the cryptocurrency industry, hindering the creation of coherent and coherent regulatory frameworks.
Some countries and/or regions have attempted, with varying degrees of success, to address the challenges of establishing regulatory frameworks for cryptocurrencies.
The WEF has noted the following updates in countries or regions since the publication of its White Paper:
Updates on crypto regulation in the USA
Although the WEF noted that progress in cryptocurrency regulation in the United States is currently at a standstillthe following was obtained:
Updates on cryptocurrency regulation in the EU
- The EU has started to introduce the Cryptocurrency Regulated Markets (MiCA) in June 2023 and is the first economic region or country to develop and implement a comprehensive framework for regulating cryptocurrencies.
- The EU supervisory and regulatory body, the European Securities and Markets Authority (ESMA), has concluded a three-month period public consultation period on aspects of the implementation of MiCA at the end of April 2024.
- The EU expects to do so fully integrate MiCA in the economic region’s cryptocurrency regulatory framework in December 2024 and, from January 2026, all cryptocurrency trading service providers will be required to verify and disclose the identities of all originating senders and destination beneficiaries, regardless of the amounts exchanged.
Updates on cryptocurrency regulation in the UK
- The Financial Conduct Authority, with which entities wishing to trade in cryptocurrencies must register, and the Bank of England (BoE) have both took firm positions on the regulation of stablecoins.
- The BoE believes this regulation will increase convenience for UK consumers while preventing financial crime.
For another perspective on how the US, EU and UK are approaching cryptocurrency regulation, click here Here.
Updates on cryptocurrency regulation in Asia
Asian countries’ approaches to regulating cryptocurrencies are many and varied. Some examples are:
- Japan recognizes cryptocurrencies as legal tender and is a recent development identification rules for stock market transactions aim to combat money laundering.
Look also
- India did not ban cryptocurrency trading in 2020, but progress has since stalled. However, cryptocurrency and the regulation of the official digital currency invoice are promising.
- China currently has a absolute ban on cryptocurrencies.
Updates on cryptocurrency regulation in South America
Meanwhile, in South America, in Brazil took action towards cryptocurrency regulation in June 2023.
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