Regulatory News
European Union (EU)
European Parliament approves 'Data Act' to foster data access and innovation - The European Parliament has endorsed the "Data Act," a legislative initiative aimed at promoting innovation by addressing barriers to data access. The law clarifies conditions for data access, facilitates sharing of data from connected products and services, and allows users access to the data they generate. The legislation, which supports the development of services in artificial intelligence, also grants public sector bodies access to private sector data during emergencies. MEPs ensured safeguards against unlawful data transfers and defined trade secrets to prevent unauthorized data leaks. The Act received strong support in the Parliament and awaits formal approval by the Council to become law.
EBA proposes stringent liquidity rules for stablecoin issuers - The European Banking Authority (EBA) has proposed new guidelines for stablecoin issuers, outlining minimum capital and liquidity requirements. The proposed rules, currently in a three-month public consultation phase until 8 February, aim to be effective from June 2024. The guidelines focus on ensuring quick redemption of stablecoins even in turbulent market conditions to prevent bank runs and contagion risks. Stablecoin issuers must offer fully redeemable stablecoins backed by a currency at par, and the liquidity stress test will identify shortcomings, allowing the EBA to strengthen liquidity requirements for approval. The proposed rules apply to non-bank institutions. A public hearing is scheduled for January 30, 2024.
EU eID proposal adopted - On 8 November a final trilogue agreement was reached on the eID proposal between the EU Parliament, Council and the Commission, endorsing the technical work done on the file following the provisional agreement reached earlier in the year. The eID text does also establish the concept of “zero-knowledge proof” for the first time in the recitals of an EU legislative text. The EU Parliament Committee vote is expected in late November/early December, with a plenary vote likely in early 2024. The European Commission (EC) is expected to start preparatory work on the relevant implementing acts immediately.
Spanish Securities Regulator initiates sanction proceedings against MIOLO DESARROLLOS, S.L. for Cryptocurrency Advertising Violations - The Executive Committee of the Spanish National Securities Market Commission (CNMV) has decided to initiate sanction proceedings against MIOLO DESARROLLOS, S.L. The action is in connection with two mass advertising campaigns conducted in September and November 2022. The company faces allegations of two serious violations related to non-compliance with administrative control measures for cryptocurrency advertising, as outlined in Circular 1/2022 that mandates the inclusion of information and warnings about the risks of crypto-assets. This marks the first sanction proceeding under the circular regulating cryptocurrency advertising, emphasizing the importance of adherence to established guidelines and the need to inform investors about associated risks. The outcome of the proceeding remains pending, and the company is entitled to defend its rights under the legal framework.
United Kingdom (UK)
UK government releases Discussion Paper on regulating fiat-backed stablecoins - The UK government has announced plans for a phased financial services regime for crypto assets, with an initial focus on fiat-backed stablecoins used in payments. The Discussion Paper outlines the proposed regulatory approach, covering issuance and custody under the Financial Services and Markets Act 2000. Additionally, the use of these stablecoins for payments will be regulated under the Payment Services Regulations 2017. The objective is to ensure a secure and regulated environment for facilitating payments using fiat-backed stablecoins, with the paper aimed at informing the development of the regulatory regime.Comments on this Discussion Paper (DP) are invited until 6 February 2024.
LATAM
The Brazilian government considers blockchain for enhanced oversight of public expenditure - The Brazilian National Court of Audit (TCU) discussed the potential use of blockchain technology to monitor government expenditures in contracts and tenders during a meeting on November 1. The meeting focused on enhancing the National Public Procurement Portal (PNCP) to provide greater transparency in the use of public resources. The TCU suggested evaluating opportunities for implementing blockchain within the PNCP, particularly for analyzing data related to items frequently acquired by the public administration with significant budgetary relevance. The use of blockchain is seen in conjunction with data analysis and artificial intelligence resources. According to the Portal do Bitcoin article, this development comes after TCU Minister Jorge Oliveira revealed audit findings indicating shortcomings in the implementation of the National Public Procurement Portal.
MENA
NAMLCFTC issues guidance to combat unlicensed Virtual Asset Service Providers - The National Anti-Money Laundering and Combating Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC) in collaboration with UAE supervisors has released guidance to address the use of unlicensed virtual asset service providers. Aligned with Federal Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism, the guidance educates licensed financial institutions (LFIs) and the public sector on risks associated with unlicensed virtual asset service providers. It follows the risk-based approach outlined by the Financial Action Task Force (FATF) and provides LFIs and other entities with a roadmap to enhance governance and operational processes. The guidance emphasizes compliance with AML legislation and regulations and outlines penalties, including financial sanctions, for unlicensed VASPs operating in the UAE. HE Khaled Mohamed Balama, Governor of the CBUAE and Chairman of NAMLCFTC, highlights the importance of raising awareness and ensuring compliance in the face of evolving digital financial landscapes.
VARA Vice Chair Deepa Raja Carbon emphasizes collaborative approach in Dubai's crypto regulations - In an interview with Cointelegraph, Deepa Raja Carbon, Managing Director and Vice Chair at VARA, highlighted the collaborative ethos behind Dubai's Virtual Assets Regulatory Authority (VARA). VARA consulted stakeholders, legislators, and the public to develop comprehensive crypto asset regulations. Established in March 2022, VARA aims to position Dubai as a hub for virtual assets and related services. The regulatory framework, released in February, includes compulsory rulebooks and activity-specific guidelines for Virtual Asset Service Providers (VASPs). Carbon emphasized VARA's agility, collaboration, and responsiveness as key factors in successfully navigating the challenges of regulating the nascent virtual assets industry.
Global News
International coalition joins forces for global implementation of Crypto-Asset Reporting Framework - A joint statement from 46 countries, including the United States, the United Kingdom, Japan, and others, outlines their collective commitment to implementing the Crypto-Asset Reporting Framework (CARF). Developed by the OECD to enhance tax transparency in the rapidly growing crypto-asset market, the CARF aims to combat tax evasion and ensure compliance. The signatory nations, hosting active crypto markets, plan to incorporate CARF into domestic law and activate exchange agreements by 2027, pending national legislative procedures. Additionally, they will align with amendments to the Common Reporting Standard, fostering a global system of automatic information exchange to leave no room for tax evasion.
Swiss National Bank launches a wholesale CBDC Pilot Project with six banks on SDX Platform - On December 1, the Swiss National Bank (SNB) is set to commence a pilot project, named Helvetia Phase III, in collaboration with six commercial banks, introducing wholesale central bank digital currency (CBDC) on the SIX Digital Exchange platform. Running from December 2023 to June 2024, the project involves real Swiss franc wholesale CBDC for settling bond transactions on a distributed ledger technology (DLT) infrastructure. Participating banks include UBS, Commerzbank, and Zürcher Kantonalbank. The pilot aims to explore the settlement of tokenized assets with CBDC and does not commit the SNB to a permanent introduction of wholesale CBDC.
BIS Conference Addresses Cyber Security Challenges for CBDCs - Agustín Carstens, General Manager of the BIS, opened a conference on "Securing the future monetary system: cyber security for central bank digital currencies" in Basel, Switzerland. Carstens highlighted the critical importance of addressing cyber security for central bank digital currencies (CBDCs) and the evolving challenges in the digital financial landscape. He emphasized the need for CBDCs to meet requirements such as user-friendly design, a robust legal framework, and, above all, stringent security measures. Carstens outlined the BIS Innovation Hub's projects on CBDC security and the efforts of the Cyber Resilience Coordination Centre in fostering collaboration and operational readiness among central banks. He encouraged private sector collaboration, considering cyber security and resilience as public goods essential for maintaining trust in the financial system.
U.S. Internal Revenue Service highlights success of J5 Alliance in 'The Cyber Challenge' against crypto tax crimes - The U.S. Internal Revenue Service reports on the recent success of the Joint Chiefs of Global Tax Enforcement (J5) in their annual event, "The Cyber Challenge", aimed at combating international tax fraud and money laundering. The collaboration, involving tax agencies from Australia, Canada, the Netherlands, the United Kingdom, and the United States, saw active participation from Financial Intelligence Units (FIUs) and private sector blockchain analysis companies in 2023. The event's effectiveness in uncovering significant leads, including exposure of multimillion-dollar crypto Ponzi schemes, emphasizes the crucial role of public-private partnerships in addressing illicit activities within the dynamic crypto landscape.
Industry News
Global News
SEBA bank secures Hong Kong SFC license for crypto services expansion - Swiss crypto bank SEBA Bank has announced that its Hong Kong subsidiary, SEBA Hong Kong, has received a license from the Securities and Futures Commission (SFC). This license enables SEBA Hong Kong to conduct regulated activities, including dealing in and distributing all securities, advising on securities and virtual assets, and conducting asset management for discretionary accounts. The approval allows SEBA Hong Kong to offer its licensed services to institutional and professional investors, including corporate treasuries, funds, family offices, and high-net-worth individuals. SEBA CEO Franz Bergmueller highlighted the significance of this development in establishing the SEBA Group's presence in the Asia-Pacific region and Hong Kong's role in the global crypto economy. The SFC license complements SEBA's existing licenses in Switzerland and Abu Dhabi.
HSBC Partners with Ripple's Metaco to launch tokenized security custody platform - HSBC has joined forces with Ripple-owned tech firm Metaco to introduce an institutional custody platform for tokenized securities. The collaboration aims to meet the rising demand for custody and fund administration of digital assets from institutional clients. Expected to launch in 2024, the new digital asset custody service will complement HSBC's existing digital asset issuance platform, HSBC Orion, and its offering for tokenized physical gold. The move reflects HSBC's commitment to the evolving digital asset markets, with a focus on security tokens rather than cryptocurrencies like Bitcoin and stablecoins.
Turkish Lira emerged as top fiat trading pair on Binance in September 2023 - According to Cointelegraph, in September, the Turkish lira claimed a dominant position as the leading fiat trading pair on Binance, representing 75% of all fiat volume. This surge in lira trading is linked to a recent influx of crypto investors in the Turkish market. Binance's research reveals that 27% of participants started their crypto journeys within the last year, with 8% joining in the last six months. The appeal for Turkish investors lies in factors such as profitability, ease of monitoring, no minimum threshold, and low transaction costs.
