Once upon a time, cryptocurrencies were known for having no rules. That’s quickly changing as governments globally seek to regulate these digital currencies.
Triggers like specific incidents have resulted in considerations for accounting and reporting guidance for crypto assets, as reported by Reuters last year. Even before crypto exchange FTX’s bankruptcy, the EU was crafting regulations.
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Here’s a quick overview of the latest regulatory modifications for cryptocurrencies in the US and British stablecoin regulation.
US cryptocurrency regulation
In 2023, the US made progress towards establishing rules for cryptocurrencies. However, since then, federal laws haven’t moved much.
The Financial Innovation and Technology (FIT) for the 21st Century Act and the Blockchain Regulatory Certainty Act are crucial laws. They establish whether a cryptocurrency is a security or a commodity, help oversee the sector more closely, and clarify which organizations are in charge of regulating crypto. However, these laws haven’t progressed much since being proposed.
EU’s cryptocurrency guidelines and future regulation
In May 2023, the European Union launched the first-ever detailed guidelines for cryptocurrency, the Markets in Crypto-Assets Regulation (MiCA). The European Securities and Markets Authority is discussing potential rules with the public.
Starting January 2026, all firms dealing with cryptocurrency will require a license. In addition, no matter the amount transferred, the names of both the sender and receiver will have to be recorded. Also, a verification process is necessary for transactions if you hold more than 1,000 euros in a personal crypto wallet.
When reflecting on the collapse of FTX, Elisabeth Svantesson, the Finance Minister for Sweden, who currently holds the EU presidency, emphasized the urgent need to impose protective measures for Europeans who have invested in these assets. Furthermore, she discussed the importance of preventing the crypto industry from being misused for money laundering and terrorism financing purposes.
Asia’s cryptocurrency regulation
Asia leads the world in using cryptocurrency, although rules fluctuate widely among countries in this area. Japan is crypto-friendly, viewing it as money and as legal property.
The nation’s Financial Services Agency oversees crypto and yen transactions, while its citizens can freely own or invest in crypto. The country recently tightened its information-sharing policies among crypto exchanges to curb money laundering.
South Korea improved cryptocurrency regulations in 2023 by introducing the Virtual Asset Users Protection Act. This law boosts user security with new rules on document maintenance and openness.
Financial officials plan to release rules for listing virtual assets around April or May 2024, reports News 1. China maintains strict policies on cryptocurrency, including bans on exchanges, trading, and mining.
India had previously banned crypto, but in 2020, their Supreme Court lifted this ban. Since then, a new bill, the Cryptocurrency and Regulation of Official Digital Currency Bill, has been lined up for parliamentary approval but has faced setbacks. This bill will let the Reserve Bank Of India establish an official digital currency.
Brazil and the United Kingdom’s cryptocurrency rules
In June 2023, Brazil established rules for dealing with cryptocurrencies. The country’s central bank is in charge of keeping an eye on anything related to digital money.
This new rule is meant to stop scams involving cryptocurrencies. It describes what counts as illegal use of crypto and what fines will be given if crypto is used for scams or money laundering.
The head of Brazil’s central bank wants to implement stronger cryptocurrency rules. This move comes after Brazil’s cryptocurrency imports soared by almost 45% from January to August 2023 compared to the previous year, hitting 7.4 billion USD.
Brazil’s Central Bank Governor, Campos Net Robertoo, noted that Brazilians increasingly use cryptocurrencies as a stable payment rather than just for investment purposes.
The United Kingdom is actively establishing regulations for the crypto sector. One significant rule is that the country’s Financial Conduct Authority must authorize any company offering a digital currency. According to the finance ministry, the government insists that firms dealing directly with UK retail consumers should seek compulsory authorization, regardless of location.
The UK’s Financial Conduct Authority and the Bank of England plan to introduce rules for stablecoins. They are cryptocurrency, but their value is linked to another asset to keep it steady.
Read More: Trading veteran Peter Brandt predicts Bitcoin price to soar to $125,000
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