Veriscope Regulatory Recap - 27th February to 5th March
Monday blues? Not anymore, as you can start the week on a strong note with Veriscope Regulatory Recap.
So, what have we got this week? A recent G20 meeting of finance ministers and Central Bank Chiefs concluded with strong commitments to the crypto sector, France moves ahead with its plan to strengthen its crypto licensing mechanism, US SEC Chair proposes a measure that he believes will protect crypto investors, Australia to come out with crypto regulations in 2024.
Needless to say, the increased crypto regulatory scrutiny is now making users concerned about potential infringement of their privacy and experience.
Although the recent events that led to ordinary investors losing billions of dollars necessitate crypto regulations, it is equally important to prevent a heavy-handed approach here, as it could stifle innovation and create further issues for the end users.
Let’s now dive straight into it.
G20 FM Meet Concludes with Strong Commitments for Crypto Sector 🤝🌍
At the recent G20 meeting in India, finance ministers and Central Bank chiefs asked the International Monetary Fund (IMF), The Bank for International Settlements (BIS), and the Financial Stability Board (FSB) to propose regulatory recommendations and draft roadmaps for the crypto sector.
According to FSB Chairman, his organization was already preparing recommendations for regulating the crypto and DeFi space, whereas IMF Chief Kristalina Georgieva said that the meeting attendees favored increased regulations in private issuances and digital money.
Reportedly, the only aspect of the crypto space appreciated by those in presence were the fully reserve-backed stablecoins, as they called it, “reasonably good space for the economy.”
France to Tighten Crypto Licensing Rules 🇫🇷
The French National Assembly has voted overwhelmingly to legislate stricter licensing rules for new crypto firms to align with the proposed EU standards, with more than 60% of the votes supporting introducing the legislation.
With the Senate members already having passed the bill, President Emmanuel Macron has 15 days to approve it or send it back to the legislature.
The new legislation - if passed - would require France-based crypto service providers to adhere to proper segregation of customer funds, guideline-based reporting to regulators, detailed disclosures of risk and conflict of interest to strengthen consumer protection, and more.
US SEC Chair Advocates for Increased Crypto Investor Protection 🎙️
Gary Gensler has supported a proposal advocating extending asset custody rules to cryptocurrencies, which he believes will boost investor protection measures already in place.
The proposal wants to expand the 2009 rule to reduce the risk of advisers embarking on Ponzi schemes to all asset classes, with execution happening through written agreements between advisers and custodians.
Firms wanting to become qualified custodians must first ensure that all their assets are appropriately segregated, undergo annual audits, and implement several similar transparency measures.
Australia 🇦🇺 to Publish Crypto Legislation Consultation Papers in Q2 2023
The Australian Government will hold stakeholder roundtables on crypto licensing and custody in the third quarter, with final submissions to the cabinet to happen late in the year.
Any concrete decisions on the Australian crypto legislation may well expand into 2024 and beyond.
On February 2nd, 2023, the Australian Treasury released a token mapping consultation paper. The Treasury had declared the document a part of a multi-step reform agenda in developing an appropriate regulatory setting for the crypto sector.
Striking a Balance Between Effective Regulations and positive User Experience ⚖️
The call to regulate the nascent crypto sector has gained increasing momentum in recent years.
And amid such an intense regulatory environment, it’s easy for regulators to miss the good side of cryptocurrencies, especially after a string of failures that rocked the entire crypto ecosystem and wiped off billions of dollars from the market cap.
Despite what transpired recently, cryptocurrencies are here to make a true difference by enabling their users to transact with utmost privacy, which is a global human right (Art. 12, Declaration of Human Rights).
Hence, while devising ways to regulate cryptocurrencies, authorities need to apply a user-focused approach, protect the users and allow them to choose between decentralized or centralized options.
Certainly, governments should not meddle in and take away any of these options from the end users, as that’s something only the user themselves should decide.
On the other hand, crypto companies must strive and develop solutions with better user experience and security, as it’s the key to the industry ecosystem's future. a
Shyft Network is working with both the regulators and industry stakeholders to bring them to the table and get them to collaborate for the betterment of the end users and the ecosystem at large. At Shyft, we prioritize user experience and privacy to strengthen the trust in the ecosystem.
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