Regulatory News
European Union (EU)
ESAs recommend enhanced monitoring of BigTech financial services in the EU - On Feb 1st, 2024, the European Supervisory Authorities (EBA, EIOPA, and ESMA) issued a report examining BigTechs' financial services in the EU, identifying services, risks and challenges. The cross-sectoral 2023 stocktake via EFIF revealed BigTech subsidiaries mainly operate in payments, e-money and insurance, with limited presence in banking and none in securities services. To intensify monitoring, ESAs propose a new matrix and advocate for a data mapping tool within EFIF. This aligns with the ongoing EFIF mission to facilitate cooperation and innovation in the FinTech sector across the EU single market, addressing concerns raised in the 2022 response to the European Commission's Call for Advice on Digital Finance.
ESMA consults on MiCA guidelines for reverse solicitation and classification of crypto assets - On January 29, the European Securities and Markets Authority (ESMA) released two Consultation Papers under the Markets in Crypto Assets Regulation (MiCA). The first focuses on reverse solicitation, addressing conditions and supervision practices to prevent circumvention. ESMA emphasizes the limited scope of crypto-asset services by third-country firms under MiCA, stressing that the client must exclusively initiate the service. The second paper seeks input on guidelines for classifying crypto-assets as financial instruments, aligning MiCA with MiFID II and ensuring consistency across the EU. The proposed guidelines aim to provide structured yet flexible conditions for classification, contributing to global standards in crypto-asset regulation. Stakeholders are invited to submit comments by April 29, 2024, with ESMA expecting to publish a final report in Q4 2024.
LATAM
Argentina excludes crypto regularization in Milei's economic reform - In a significant move, Argentina has removed the option to legalize crypto holdings, even for overdue tax declarations, from the Law of Bases and Starting Points for the Freedom of Argentines - the Argentine technology-centric publication iProUP disclosed on January 27. The clause, proposing a one-time tax on undeclared assets, was part of the omnibus bill introduced by President Javier Milei. The eliminated regularization scheme suggested a 5% tax on assets declared by March 2024, escalating to 15% by September 2024. The scheme covered various assets, including cryptocurrencies, real estate, personal property, stocks, and securities. The decision to exclude this clause was attributed to its impact on delaying parliamentary discussions, as stated by the Minister of the Interior, Guillermo Francos.
MENA
UAE celebrates CBUAE's 50th anniversary with first Digital Dirham transfer to China - The UAE marked the Central Bank of the UAE's (CBUAE) 50th anniversary with its inaugural cross-border Central Bank Digital Currency (CBDC) transfer, 'Digital Dirham,' amounting to Dhs50 million ($13.6 million) to China. The historic transaction utilized the mBridge multi-CBDC platform, employing blockchain technology. The UAE's CBDC initiative aligns with its digital transformation goals, addressing domestic and cross-border payment challenges and promoting financial inclusion.
UAE set to exit FATF Grey List in February - AML Intelligence has obtained information that the United Arab Emirates (UAE) is poised to be removed from the Financial Action Task Force (FATF) "gray list" this month. Sources from the FATF headquarters revealed that the UAE has successfully undertaken the required remedial measures, leading to its anticipated removal from the watchlist.
Growing confidence in digital assets fuels demand for clear regulations in UAE - In the UAE, institutional investors are growing more optimistic about integrating digital assets into their diversified portfolios, underscoring the importance of well-defined regulations in the region. Christian Borel from AMINA Bank (previously called SEBA Bank) emphasizes the notable advancements in cryptocurrency regulations across the MENA region, emphasizing that clear regulatory frameworks play a crucial role in positioning the UAE as a focal point for fintech and blockchain innovation. The increasing confidence among institutional investors signals a pressing need for comprehensive regulations to support the seamless integration of digital assets into the broader financial landscape.
Global News
Singapore authorities warn against growing threat of crypto drainers - On January 31, the Singapore Police Force (SPF) and the Cyber Security Agency of Singapore (CSA) issued a warning about the increasing use of cryptocurrency drainers for illicitly acquiring funds from investors. With the rising popularity of cryptocurrencies in the country, cybercriminals are utilizing crypto drainers to target crypto wallet owners. Crypto drainers, a form of malware often employed in phishing attacks, have not yet been observed in specific cases in Singapore but are part of a global trend. The SPF and CSA advise consumers to remain vigilant in the face of this emerging threat.
Industry News
European Union (EU)
Spain trials Euro-Backed stablecoin (EURM) in Regulatory Sandbox - Spanish fintech company Monei has initiated trials for EURM, a euro-backed stablecoin, under the supervision of the Bank of Spain. The regulatory sandbox trial, which commenced in January, involves a limited group of individual users to minimize the error margin. The trial focuses on testing EURM's transaction capabilities, where users verify their identity, deposit 10 euros to their account and exchange it for 10 EURM. The stablecoin is expected to facilitate fast transactions with minimal commission fees.
DZ Bank plans retail Bitcoin trading for customers - Germany's second-largest bank, DZ Bank, is gearing up to introduce a retail cryptocurrency trading service for its customers later this year. The move signifies a significant stride in traditional financial institutions embracing crypto. The pilot program aims to extend the service to over 700 affiliated community banks, enabling private customers to trade popular cryptocurrencies like Bitcoin and Ether. DZ Bank had previously launched a digital custody platform for institutional crypto investors and applied for regulatory licenses. The bank's initiative aligns with the growing interest in cryptocurrency solutions among German banks.
LATAM
Brazilian fintech BRLA Digital Secures additional investment in pre-seed round - BRLA Digital, a player in the cross-border payments and crypto infrastructure sector, has secured additional funding from 99 Capital for its pre-seed round. Endorsed by Dave Wang, founder of 99 Capital and former Head of crypto at Softbank LatAm, the investment brings the total round to over R$ 4 million. This strategic investment comes at a crucial time as BRLA Digital aims to reinforce its position in the cross-border payments and crypto infrastructure market.
Global News
PayPal Ventures invests in Mesh to boost embedded finance innovation - Mesh, a leading embedded finance solution facilitating seamless digital asset transfers and account aggregation, has secured an investment from PayPal Ventures. The investment, made using PayPal's stablecoin (PYUSD), reinforces Mesh's position in embedded finance and highlights PayPal's commitment to fostering innovation in digital payments. This marks the first use of PYUSD as a funding instrument for a PayPal Ventures investment. The investment follows Mesh's recent $22 million Series A funding round and positions Mesh as a key player in enabling businesses to integrate secure crypto transfers and payments seamlessly into their existing platforms.
