What’s new and cool in crypto regulations
We were reading our usual daily portion of blockchain and crypto related news when we suddenly realized that the web feed was filled with multiple government announcements. On a daily basis, countries worldwide are making official statements, exploring the technology, or declaring their revised policy towards cryptocurrencies.
At first glance, it may seem slightly overwhelming.
However, we shouldn’t forget about the fact that the crypto industry is relatively new and remains confusing for many. In fact, it is so confusing that, according to Coindesk, 73% percent of UK consumers have no clue what cryptocurrency even is. It’s no wonder the authorities have their hands full! Educating the masses, while figuring out the way to control a new tech industry committed to decentralization, is clearly not an easy task.
From this perspective, it’s not all that surprising that there is a load of crypto news from all corners of the world.
Inspired by Coindesk’s newsfeed, we’ve picked the most interesting announcements over the last two weeks to reflect on.
Republican senator, Daniel Hemmert, suggested that blockchain-related businesses should be exempt from the Money Transmitter Act. Moreover, the state of Utah is planning on creating a legislative group that will explore the possibilities of implementing the technology in the governmental sector. They also intend to run a trial project and afterward, make a report that will propose an appropriate legislation strategy.
The Argentinian government made a commitment to invest in up to 10 blockchain startups annually during the next 4 years. The applaudable initiative is backed by Binance. The famous crypto exchange believes that Latin American could become a major player in the industry and wants to help Argentina solve their local problems by creating workspaces and using the technologies to improve the quality of life.
The Eastern Caribbean Central Bank is planning on issuing a stablecoin as an alternative to the Eastern Caribbean dollar. The goal of this project is to provide citizens with an easy, accessible and affordable way to execute daily transactions, reduce the use of cash, and improve the financial situation of the country.
UNICEF is working on yet another good purpose as a part of Project Connectand hopes to provide an internet connection to all of the schools in Kyrgyzstan. The non-profit organization is currently discussing this initiative with the country’s government and is going to use blockchain technology to map all the schools in Kyrgyzstan and monitor the whole process.
Another North American lawmaker is exploring what blockchain has to offer. This time it’s about water rights management in the state of Colorado. After the necessary funds are raised, an affiliate of Colorado State University will study the relevant blockchain use cases such as water rights database management, water “banks” establishment, and general administration. Upon completion of the research, the University will make a report to the general assembly.
And if that’s not impressive enough, we’ve got even more news for you from Colorado. The city of Denver wants to provide an opportunity for US citizens who are overseas to take part in the upcoming municipal elections in May via dapp. Eligible voters should file a request and pass a verification in the mobile app. If the pilot project goes smoothly, we “might see more regular use of this technology.”
The state of Connecticut might soon authorize the commercial use of smart contracts. In fact, the corresponding act erases barriers between those companies that use traditional methods to secure transactions and those who do it via distributed ledger.
The German Finance Ministry is seriously looking into the regulation of the crypto security market. Based on a paper published on their official website, the Ministry acknowledges the importance of creating an appropriate framework that will be controlled by the government and that protects investors.
The EU Blockchain Observatory and Forum released a report that investigates the perspectives of blockchain adoption. The document suggests that smaller private platforms stand more chance as they are more flexible and thus, client-oriented. They also show better performance and security. The report also points out major technology issues that have yet to be solved including scalability, interoperability, and sustainability.
Malta is officially on a mission to protect “consumers, investors, and business partners” by implementing CipherTrace’s Compliance Monitoring. This solution is supposed to help with monitoring various crypto exchanges and other crypto organizations, look for money-laundering schemes, spot criminal activities, analyze ICOs, and in doing so, reduce risk.
The Securities and Exchange Commission of Thailand has agreed on establishing an official portal that will regulate the country’s ICO activities and protect investors’ funds. The platform will monitor the smart contracts of the projects and ensure the execution of KYC procedures.
The Basel Committee on Banking Supervision has sounded a note of warning regarding the spreading reach of cryptocurrencies. The committee presumes that this might threaten global financial stability. It also highlights the potential risks for banks such as liquidity, credit and market risks, fraud and cyber risks, money laundering and terrorist financing risk, and legal and reputational risks. It advises that banks should implement a certain risk-based approach when it comes to dealing with cryptocurrencies.
The USA, on the other hand, keeps on analyzing blockchain technology and looking for ways to use it on the government’s behalf. In his speech before the Select Committee on the Modernization of Congress, Republican leader, Kevin McCarthy, called to follow the example of the 21st-century technology and use it to make Congress “more effective, more efficient, and most importantly, more accountable.”
Canadian financial regulatory authorities are not hanging behind their American colleagues and have already started putting together rules for cryptocurrency exchanges. They have recently published a paper dedicated to the fintech community on developing suitable regulatory requirements. Considering the fact that most cryptocurrency platforms have a hybrid nature, authorities suggested treating them accordingly and developing appropriate regulation strategies.
Crypto and blockchain are obviously no longer just the fascinating ideas of a small group of enthusiasts. It is an independent industry acknowledged by multiple authorities worldwide and, as they say, “is here to stay.” The most progressive governments are not fighting it, they are looking for ways to use it for the good of their society.
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