Regulatory News
European Union (EU)
Digital Euro shadow sceptical on its practical application - The Centre for European Policy Studies (CEPS) hosted a roundtable discussion on October 25 to introduce its report on the Digital Euro project. A new report discusses the potential benefits and challenges of the digital euro, offering recommendations for prerequisites before its launch. It underscores the importance of providing a compelling value proposition to drive adoption among consumers and merchants in the EU. The report also emphasizes the need for an EU legislative framework that allows gradual benefits emergence while preventing the crowding out of European private solutions, ensuring competition in the European payments market. Jose Antonio Alvarez, Chair of the Round Table and Vice Chairman of Santander, highlights the importance of public and private sector collaboration in shaping the future of payments.
Spain to implement MiCA by December 2025 - Spain will adopt the EU's MiCA Act by December 2025, ahead of the EU-wide deadline in July 2026, shortening the transition period to 18 months. The move aims to enhance investor protection and legal certainty. The country's central bank, Banco de España, is also considering the benefits of a digital euro as it acknowledges the limitations of physical cash in the digital economy.
United Kingdom (UK)
FCA offers guidance for UK crypto firms to navigate new promotion rules - The UK's new crypto asset promotion rules, effective since October 8, have led to low compliance and confusion among crypto firms. To address this, the Financial Conduct Authority (FCA) released guidance on November 2 to help these firms comply. FCA's director, Lucy Castledine, emphasized that the rules align with existing high-risk investment regulations and are designed to support crypto firms in adhering to them. Despite warnings and extended deadlines, some market players have left the UK due to the rules. The 32-page guidance does not introduce new obligations but reflects a secondary international competitiveness objective and provides answers to common questions.
UK publishes plans for regulating stablecoins - On October 30, the UK government has announced plans to regulate fiat-backed stablecoins. The Treasury aims to introduce legislation in 2024 to bring these stablecoins under the Financial Conduct Authority's (FCA) oversight. Local companies will play a role in ensuring overseas stablecoins meet local standards, authorized by the FCA. Non-fiat-backed stablecoins, including algorithmic ones, will remain unregulated. The FCA will require standard stablecoin issuers to hold reserve funds in a statutory trust, with terms outlined in its rules. In cases of issuer failure, procedures under the Insolvency Act 1986 will apply. The use of fiat-backed stablecoins in payment chains will be subject to the Payment Services Regulations 2017 (PSR 2017), while the issuance and custody of such stablecoins within or from the UK will fall under the purview of the Financial Services and Markets Act 2000 (FSMA 2000).
Mintable CEO warns UK risks misregulating NFTs - In an interview with Cointelegraph, Mintable CEO and founder, Zach Burks, expressed concerns about the United Kingdom's potential misregulation of nonfungible tokens (NFTs). Burks believes that a recent report from a UK parliamentary committee overemphasizes NFTs' role in copyright infringement while failing to recognize their broader utility beyond digital art. He points out that issues like copyright protection and intellectual property rights are not exclusive to NFTs and exist across the internet. Burks advocates for a more nuanced approach, suggesting that NFTs have diverse use cases, from property records to supply chain management. He highlights Singapore as a model for regulating NFTs based on their specific use cases rather than broad frameworks.
Former FCA boss warns against treating crypto assets as regular investments - According to Financial Times, Charles Randell, the former chair of the UK's Financial Conduct Authority (FCA), has raised concerns about the UK government's plan to regulate the crypto industry in a manner similar to traditional financial investments. Randell warns that categorizing crypto assets as regular investments could lead to "consumer harms" because the nature of the crypto industry is rife with fraud. The government aims to bring the crypto sector into the mainstream by requiring all crypto companies to be authorized by the FCA, asserting that it will enhance investor protections. However, Randell criticizes the government's approach, saying that crypto will be labeled as an "investment" without quantifying the potential risks to consumers. Despite growing calls for crypto regulation and positioning the UK as a "crypto hub," disputes between the government and the FCA persist.
PayPal gains approval for crypto services in the UK - PayPal, the global payment giant, has been granted approval by the Financial Conduct Authority (FCA) to offer certain crypto services in the United Kingdom, as per official FCA records. The approval, granted on October 31, 2023, comes with restrictions, including limitations on onboarding new customers and restricting existing customers to holding and selling cryptocurrencies. PayPal is not permitted to expand its current offerings in crypto assets, including crypto exchange services, participation in initial coin offerings, staking, peer-to-peer exchanges, and decentralized finance activities like lending and borrowing.
LATAM
Bill proposing tax on crypto-assets approved in Brazil's Chamber of Deputies - On October 25, The Chamber of Deputies in Brazil approved Bill No. 4173/2023, which introduces a tax on offshore investments by individuals and the anticipation of tax on closed-end funds, including crypto-assets. The bill aims to tax individuals with foreign income exceeding R$6,000 per year at a rate of up to 15% of their income tax. The proposal has the potential to generate more than R$7 billion in revenue and is now headed to the Senate for a vote. The Brazilian Crypto Association (ABCripto) has raised concerns, considering the taxation of crypto-assets under this bill as illegal and calling for a legal framework that respects their unique characteristics.
MENA
Abu Dhabi Global Market introduces groundbreaking DLT Foundations Regulations - On November 1, The Abu Dhabi Global Market (ADGM) has introduced groundbreaking Distributed Ledger Technology (DLT) Foundations Regulations, a first-of-its-kind framework for Web3 organizations. These regulations cover blockchain foundations, Web3 entities, decentralized autonomous organizations (DAOs), and traditional foundations transitioning to DLT. The regulations allow the creation of "DLT Foundations" by submitting a charter with governance details, initial assets, and token issuance plans. Key figures remain private, and foundations must end their name with "DLT Foundation." Activities licensable by the ADGM Financial Services Regulatory Authority are prohibited. The ADGM is aiming to set global standards for transparency and efficiency in the Web3 space, further establishing itself as a hub for blockchain and digital assets.
Global News
Swiss wholesale CBDC pilot begins with central and commercial bank collaboration - SIX, the Swiss National Bank (SNB), and six commercial banks are collaborating on a pioneering pilot project in Switzerland for tokenized central bank money, termed wholesale central bank digital currency (wCBDC). The project, named Helvetia Phase III, aims to settle digital securities transactions using a Swiss Franc wCBDC and will be hosted on SIX Digital Exchange (SDX), a regulated Distributed Ledger Technology (DLT)-based financial market infrastructure. It builds on the findings of earlier phases conducted by the BIS Innovation Hub, SNB, and SIX. Participating banks will issue digital Swiss Franc bonds, settling against wCBDC on a delivery-versus-payment basis. The pilot will run from December 2023 to June 2024, marking a significant advancement in digital finance innovation in Switzerland.
Project mBridge reveals details ahead of commercial debut - The Bank for International Settlements (BIS) released an update on Project mBridge, a central bank digital currency (CBDC) bridge, with a focus on its upcoming commercial launch. The update provides detailed information on the project's governance structure, technical aspects, and the use of the Dashing consensus algorithm. It highlights the reduction of steps in cross-border payments and the use of legal entity identifiers for Anti-Money Laundering and Countering the Financing of Terrorism. The update also reveals a list of observer organizations, including central banks and institutions like the International Monetary Fund and Federal Reserve Bank of New York. Project mBridge, initiated in 2021 by central monetary authorities, is moving towards becoming a Minimum Viable Product for commercial deployment.
BIS releases report on offline payments with CBDCs for central banks - The Bank for International Settlements (BIS) has issued its fourth report under Project Polaris, focusing on the high-level design of offline payments with Central Bank Digital Currencies (CBDCs). The report aims to provide crucial insights to central banks for decision-making, architectural design, and implementation planning related to CBDCs. It discusses technology solutions, design choices, and central bank requirements while offering guidance on mapping CBDC objectives for offline payments. Central banks are encouraged to consider the report's key takeaways when evaluating CBDC infrastructure and implementation.
MAS partners with policymakers in Japan, Switzerland, and UK for digital asset innovation - On October 30, The Monetary Authority of Singapore (MAS) announced its partnership with Japan's FSA, Switzerland's FINMA, and the UK's FCA to advance digital asset projects in fixed income, forex, and asset management. Under MAS' Project Guardian, they've conducted successful industry pilots on asset tokenization. This collaboration aims to address legal, policy and accounting aspects of digital assets, identify risks and policy gaps, establish common standards, promote interoperability, facilitate regulatory sandboxes for pilots and encourage knowledge sharing among regulators and the industry. MAS and its partners seek to support sustainable growth in the digital asset ecosystem.
Turkey to strengthen crypto asset regulation to exit FATF 'Grey List' - According to Reuters, Turkey is preparing new legislation to regulate crypto-assets in an effort to persuade the Financial Action Task Force (FATF) to remove it from the "grey list" of countries with insufficient measures against money laundering and terrorist financing. The FATF downgraded Turkey to the grey list in 2021, with one remaining compliance issue related to crypto assets. Finance Minister Mehmet Simsek announced that they will submit a law proposal on crypto-assets to the parliament to address this issue and potentially exit the "grey list". No specific details of the proposed regulations were provided.
Industry News
European Union (EU)
BitGo secures BaFin license for crypto custody in Germany - BitGo, a major crypto custody firm, has obtained a crypto custody business license from Germany's BaFin. This move cements BitGo's presence in the European market after operating under BaFin's transitional regime since 2019. According to Cointelegraph, BitGo's European Managing Director, Dejan Maljevic, emphasized BaFin's role in crypto regulation and the need for a secure regulatory framework for digital currencies. BitGo had previously established regulated custodial entities in Germany and Switzerland in 2020. This milestone follows BitGo's $100 million Series C financing round in August 2023, raising its valuation to $1.75 billion.
Deutsche Telekom's subsidiary joins Aleph Zero as validator - Deutsche Telekom's subsidiary, Deutsche Telekom MMS, has become a validator for Aleph Zero, a privacy-enhancing Layer 1 blockchain. They have set up validator nodes on the mainnet and testnet, contributing to the network's security, governance, and decentralization. This collaboration marks Deutsche Telekom's first partnership with a privacy-focused network and is seen as a significant step towards institutional adoption of privacy-enhancing blockchains. Aleph Zero offers robust privacy technology through zero-knowledge proofs (ZK-SNARKs) and secure Multi-Party Computation (sMPC). These technologies provide privacy options for communications, transactions, and records. The partnership reflects the growing importance of security, privacy, and decentralization in the Web3 space.
United Kingdom (UK)
ShareRing achieves UK accreditation for digital identity solution - Australian digital identity blockchain firm ShareRing has received accreditation under the UK's "Digital Identities and Attributes Trust Framework" (DIATF). This accreditation empowers ShareRing to offer its digital identity solution for identity verification and land registry purposes in the UK. ShareRing's technology provides businesses with end-to-end customer identity verification while enabling individuals to maintain control over their personal data. The DIATF ensures data integrity and privacy in digital identity ecosystems. ShareRing plans to collaborate with Australian and UK public and private sectors to enhance operational efficiency and reduce identity fraud.
MENA
WadzPay gains initial approval from Dubai's VARA for virtual asset services - WadzPay has received "Initial Approval" from Dubai's Virtual Assets Regulatory Authority (VARA), marking a significant step towards obtaining a Virtual Asset Service Provider (VASP) License for virtual asset services and activities. This achievement reflects WadzPay's commitment to adhering to high regulatory standards and contributing to the UAE's fintech ecosystem. The Initial Approval enables WadzPay to prepare for offering virtual asset services under the VASP License for Transfer & Settlement and Broker/Dealer activities. While this is a vital milestone, WadzPay is actively working towards securing the final approval from VARA, a critical step for full operation in the UAE. WadzPay is dedicated to enhancing financial inclusion and transforming the virtual asset landscape.
Backpack crypto wallet launches VASP-licensed exchange in Dubai - Backpack, a Web3 wallet and NFT provider, has received a license from the Dubai Virtual Assets Regulatory Authority (VARA) to launch a regulated cryptocurrency exchange in Dubai. The license covers the operation of Backpack Exchange in Dubai, with a focus on transparency and security. The exchange will use technologies like zero-knowledge proof of reserves and multi-party computation for custody. A private beta for existing Backpack customers will commence in November, offering spot crypto trading, followed by a full public launch in the first quarter of 2024. Backpack CEO Armani Ferrante stresses the need for transparent and secure crypto exchanges.
Global News
Adidas Web3 platform to auction limited-edition Bugatti-inspired shoes - Adidas and Bugatti have collaborated to auction 99 limited-edition soccer boots inspired by Bugatti's car designs through Adidas' web3 platform. The auction will run from November 8th to 11th, with each shoe accompanied by a digital twin. Bidders can use MoonPay, a crypto and NFT payment service, to place bids using fiat currency for crypto transactions. The shoes are built around Adidas' X Crazyfast laced boot, available in black and "Bugatti Blue,'' inspired by early Bugatti Grand Prix cars. Winners will receive an exclusive digital shoebox that can be redeemed via Adidas Collect starting from November 13th.
Wirex introduces innovative Metal Card - Wirex has launched a Metal Card as part of its upgraded membership plan, offering a premium Visa Signature card made of durable metal with no additional fees. The Metal Plan costs £30 per month or £300 annually, with opportunities to have fees waived under certain conditions. Users can enjoy rewards, up to 15% Cryptoback rates, and exclusive privileges. Wirex provides various membership tiers, including a free Standard Plan, the enhanced Metal Plan, and an exclusive Private Plan. This development enhances Wirex's offerings, although the summary does not emphasize the crypto aspect of the news.
