Regulatory News
European Union
European Central Bank: Fabio Panetta, an ECB executive, acknowledges the progress in the digital euro project, emphasizing public involvement in shaping an inclusive digital payment solution. He highlights the legislative proposals that aim to protect monetary sovereignty, accessibility and user privacy in the digital age. He also underlines the importance of preventing private sector dominance and preserving financial stability while promoting innovation with digital euro.
Reuters: Speaking at a conference held by consultancy Bruegel, Mairead McGuinness, the EU's financial services chief, has advised against rushing the draft law for a digital euro ahead of the European elections. She stressed the need for a thoughtful examination by the new Commission. The proposed digital euro aims to provide a cash-like digital alternative, addressing the declining use of physical cash. The final decision on its implementation rests with the European Central Bank in October, aiming to address the shortage of European payment service providers and maintain public money accessibility. McGuinness emphasized the importance of offering consumer choice and preserving cash accessibility alongside digital options.
United Kingdom
Financial Conduct Authority: The FCA’s financial promotions regime will apply to the marketing of crypto asset products from October 8, 2023. These rules require that crypto firms' marketing be "clear, fair, and not misleading", in addition to several other requirements set by the regulator. . In response to industry feedback, the FCA announced on 7th September that MLR-registered or otherwise authorised firms can apply for an extension until January 8 2024 to implement certain features that require greater technical development. The financial regulator also published further guidance on good and poor practices they have observed in firms’ preparations for the incoming regime.
Dubai
Gulf News: As of August 31, all cryptocurrency businesses in Dubai must operate as licensed and fully regulated entities under the oversight of the emirate's virtual assets regulator, VARA. This transition requires these businesses to demonstrate their credentials for crypto-asset operations, ensuring that clients are in a position to receive compensation in case of any issues.
Global
Reuters: The Financial Stability Board and the IMF raised concerns about noncompliance with existing regulations exacerbating these risks and noted that many touted benefits of crypto assets have yet to materialize. The paper also called for clear tax treatment of crypto assets and the application of existing laws to the sector while warning against large government deficits that could lead to inflation and boost the adoption of crypto assets.
Be in Crypto: Vitalik Buterin, co-founder of Ethereum, has co-authored a paper suggesting that privacy-enhancing systems like "Privacy Pools" can coexist with financial regulation. The paper explores how blockchain privacy can be maintained while ensuring compliance with regulatory requirements. Unlike Tornado Cash, which has faced scrutiny and sanctions, Privacy Pools allow users to publish zero-knowledge proofs that demonstrate their withdrawals are not associated with illicit deposits, offering a potential solution to the challenges posed by privacy and regulation in the cryptocurrency space. The paper encourages collaboration among various stakeholders to develop privacy-enhancing infrastructure that aligns with regulatory frameworks.
Industry News
Portal do Bitcoin: The consortium led by MB (Mercado Bitcoin), in collaboration with Genial Investimentos, Mastercard, CERC, and Sinqia, has made progress in its pilot project for the Digital Real, officially referred to as Drex. They achieved this by integrating their node into the Banco Central's network. This integration enables the consortium to conduct practical tests with Drex, such as issuing tokens and conducting transfers, in coordination with the Banco Central's blockchain. The first formal test is scheduled for December 4, marking the beginning of the implementation journey for the Digital Real.
Google: Google has announced updates to its Cryptocurrencies and related products policy, specifically regarding the advertising of blockchain-based games involving NFTs (Non-Fungible Tokens). These changes will go into effect on September 15, 2023. Allowed promotions include in-game item purchases to enhance gameplay. However, ads for NFT games involving gambling or real-money gambling are prohibited. Advertisers wishing to promote such content must follow gambling and games policies and get Google Ads certification. This policy applies globally and comes with a prior warning before any account suspension.
CoinTelegraph: Coinbase is targeting the European Union, UK, Canada, Brazil, Singapore, and Australia for expansion due to their clear cryptocurrency regulations. The company plans to acquire licenses and strengthen operations in these markets as part of its "Go Broad, Go Deep" phase. Coinbase also aims to engage with G20 countries to establish global crypto standards and is focusing its efforts on Brazil, which will chair the G20 in 2024. This expansion comes amid ongoing regulatory challenges in the United States.
Financial Times: The London Stock Exchange (LSE), Europe's largest stock exchange, plans to become the first major exchange to use blockchain technology to offer a wide range of traditional financial asset trading. While LSE doesn't plan to work directly with cryptocurrencies, they see blockchain's potential to enhance the efficiency of trading traditional assets. The exchange aims to have its first blockchain-based market in operation next year, pending regulatory approval.
Finance Magnates: The Open Network Foundation (TON Foundation) has officially launched as a Swiss non-profit organization to support The Open Network (TON). Switzerland's favorable regulatory environment for blockchain and cryptocurrency played a crucial role in the foundation's decision. TON Foundation aims to provide transparency through tokenomics reports, engage with the TON community through annual events like "Gateway," and promote TON's mission of building a Web3 ecosystem within Telegram Messenger for widespread digital asset ownership and data control.
Binance: Binance is rolling out "Send Cash" in Latin America, allowing users in nine countries to transfer cryptocurrency via Binance Pay to recipients' bank accounts. Initially available in Colombia and Argentina, this service aims to simplify digital transfers and reduce costs, collaborating with licensed transfer processing providers. Binance is committed to enhancing financial inclusion and addressing local needs in regions where a significant portion of the population lacks access to traditional banking services.
CoinTelegraph: Paris Hilton, Andreessen Horowitz, and Samsung have invested in Story Protocol, a blockchain-based open IP collaboration network. The platform, which recently closed a $54 million funding round, aims to help content creators manage and monetize their content in the age of AI-generated fakes. Story Protocol will serve as an IP ownership repository for various content types and offers artists the ability to sell licensing rights through connected services. This initiative addresses concerns in the entertainment industry related to deep fakes and copyright infringements facilitated by generative AI.
Reuters: Coinbase Global is set to launch a digital asset lending platform targeting large institutional investors, with $57 million raised for the project, according to a regulatory filing. This move comes as the cryptocurrency industry received a boost following a legal ruling in favor of Grayscale's proposed bitcoin ETF. Coinbase recently secured approval to offer cryptocurrency futures to U.S. retail customers, marking a significant regulatory achievement.
