Regulatory News
European Union
DAC8: European lawmakers overwhelmingly approved the Parliament’s opinion on DAC8, the eighth iteration of the Directive on Administrative Cooperation, during plenary session on 13 September. DAC8 now also includes crypto assets under the tax reporting rules. 535 MEPs voted in favor, 57 against and 60 abstained. The report does not impact DAC8 itself, as the Council already reached an agreement on this file in May. However, it can now be formally published. EU member countries have until December 31, 2025, to put the rules in place before they officially start on January 1, 2026.
France - The Autorité des Marchés Financiers: French Financial Markets Authority has introduced a "Responsible Influence Certificate" for financial influencers, including those promoting cryptocurrencies, as a step towards regulating and licensing them. This certificate, initially introduced in 2021, now includes a specialized course for influencers covering various investment products, including crypto assets. While not legally mandatory, non-compliant influencers can have their certificate withdrawn by the Professional Advertising Regulatory Authority.
Portugal - Bank of Portugal: At a conference on the Digital Euro at Lusofona University, keynote speaker, Helder Rosalino, from the Bank of Portugal shed some light on the complex process of the Digital Euro project - the effort to create a digital version of the Euro currency, regulated by central banks, for electronic transactions and payments. Martinho Lucas Pires from BlockReg Advisors also participated in the panel debate, offering valuable insights into the Digital Euro project and its potential impact on the dynamic world of crypto assets and stable coins.
United Kingdom
Financial Conduct Authority: The regulator has introduced upgraded screening checks for financial advertisements. The final policy statement outlines the position regarding the introduction of a gateway for firms that approve financial promotions. It supports legislative changes within the Financial Services and Markets Act 2023, requiring authorized persons to apply for permission to approve financial promotions for unauthorized persons. The new regime aims to improve oversight and the quality of approved financial promotions, addressing issues of non-compliance in the industry.
Global
IOSCO: IOSCO has issued nine policy recommendations to address concerns about DeFi, focusing on market integrity and investor protection. Their goal is to standardize regulations for crypto-asset and securities markets across IOSCO jurisdictions, following the "same activity, same risk, same regulatory outcome" principle. These recommendations are part of IOSCO's collaborative efforts with global entities such as FSB, FATF, BIS, and BCBS regarding DeFi. IOSCO plans to finalize these DeFi recommendations by late 2023, as outlined in its Crypto-Asset Roadmap from July 2022, along with its Policy Recommendations for Crypto and Digital Asset Markets (CDA) published in May 2023. Feedback can be submitted to [email protected] before October 19, 2023.
BIS: The Bank of International Settlements released a paper on digital safety nets that differ from traditional ones by using smart contracts and decentralized methods. These innovations aim to reduce income inequality and volatility. The paper emphasizes smart contracts' role in recording agreements, securing escrow commitments for insurance funds, and enforcing rules. It also highlights the benefits of smart contracts in promoting risk-sharing and privacy within safety nets.
G20: On September 9-10, the G20 Heads of State convened for the semi-annual G20 summit, which occurred this time in New Delhi. During the summit, all 20 Member Countries came together to sign a declaration. In the context of crypto assets, smart contracts, and DeFi, the declaration primarily endorsed the efforts of international organizations like the FSB, IMF, BIS, and FATF. All the reports from these organizations have primarily emphasized the risks associated with technologies linked to the crypto assets sector.
Industry News
European Union
Cyprus - Cyprus Security and Exchange Commission: The local unit has announced the removal of Binance Cyprus Ltd from the Register of Service Providers of Crypto-assets. This action was taken in accordance with the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007, as amended, and Directive for the Register of Crypto Asset Service Providers. The removal was due to the company's failure to provide crypto asset services for a continuous period of six (6) months.
LATAM
Brazil - Central Bank of Brazil: The Banco Central do Brasil (BC) has published a report on DREX, the digital version of the Brazilian real, designed to simplify virtual transactions in the Brazilian market. The BC reports successful testing of DREX, with 500 transactions conducted since July, involving 11 institutions or nodes, including a consortium led by Mercado Bitcoin and Mastercard. The digital real is expected to be available to the public in early 2025, following these initial simulation phases.
MENA
Dubai - Cryptopolitan: TOKO FZE, a Web3 FinTech backed by DLA Piper, secures a full operating license from Dubai's VARA regulatory authority, enabling virtual asset broker-dealer services. TOKO will offer data-rich tokens tied to various assets like real estate, digital art, and more, enhancing Dubai's role as a global virtual asset hub. This marks the third VASP crypto broker license issued by VARA in recent months.
Global
Reuters: Deutsche Bank has partnered with Swiss crypto firm Taurus to offer custody services for institutional clients' cryptocurrencies and tokenized assets. This collaboration marks Deutsche Bank's entry into the crypto space, allowing it to hold a limited number of cryptocurrencies and digital versions of traditional financial assets for its clients. While the bank had expressed its intention to offer crypto trading in a 2020 World Economic Forum paper, crypto trading is not part of its immediate plans, as it proceeds cautiously in compliance with regulations and focuses on supporting clients within the digital assets ecosystem.
Startle Labs: Sony is partnering with Startale Labs to create its own blockchain network, based in Singapore. This joint venture aims to leverage Sony's expertise in IoT and AI alongside Startale's blockchain focus to build a global infrastructure for the Web3 era and foster innovation across industries. While Sony holds a 90% stake in the venture, Startale retains 10%, and the CEO of Startale believes that Sony's blockchain could surpass Coinbase's.
Finance Magnates: PayPal is expanding its cryptocurrency support by introducing off-ramp services in the United States, complementing its existing on-ramp services for buying cryptocurrencies. These services can be integrated with Web3 platforms, wallets, dApps, and NFT marketplaces, enabling users to trade cryptocurrencies with fiat currencies. This move is aimed at Web3 merchants and offers a seamless and secure way to connect to PayPal's extensive user base while avoiding strict fiat payment regulations in the crypto industry.
Crypto News: Italian luxury watchmaker Panerai is incorporating NFT-based "digital passports" with every watch sold after October 3. These digital passports, developed in partnership with Arianee and powered by blockchain technology, will verify each timepiece's authenticity and provide extensive information about it. Additionally, they extend the international limited warranty for up to eight years, enhancing the customer experience and aligning with the luxury industry's adoption of blockchain and NFTs to combat counterfeiting and enhance product authenticity.
