Dubai, UAE, 16th July 2024, As digital currencies, particularly crypto, become more widely accepted, governments and regulatory bodies can no longer ignore their existence. However, as many still need to decide what place crypto may find within their economies and how much they would prefer to control, regulations vary immensely from country to country and even within one country with time. Let’s examine cryptocurrency regulations in some regions, exploring the approaches taken by various nations.
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North America
The North American crypto market gained much attention earlier this year when the American investment giant BlackRock launched its Bitcoin exchange-traded fund (ETF), signaling that the USA is moving one step further toward making crypto a valid part of the investing landscape. This event was met with great excitement, with people from both the US and other countries believing that this means that crypto is fully legalized in America. However, the reality is more complex as the USA has taken a somewhat fragmented approach to crypto regulation, with various regulatory agencies involved and different states treating crypto and related products differently.
Some states have favorable regulations for cryptocurrencies to stimulate local economies, while others impose stricter rules on blockchain companies. This reflects a trend where larger states aim to regulate blockchain technology while smaller states seek to attract more crypto companies.
Unlike the USA, Canada has adopted a more unified approach. However, their regulatory framework is still in the making, with the government gradually making changes to enhance user experience and protection. Recently, Canadian regulators have suggested new rules to offer clearer guidelines and risk management strategies for public investment funds that deal with crypto assets. The presented regulatory amendments would limit the activities related to cryptocurrencies that public investment funds can undertake. These assets would have to be listed on exchanges recognized by a Canadian regulator. They would also need to be insured and held in cold wallets, with a yearly review of the custodian’s managing practices required.
Europe
While European countries may have their own policies to oversee crypto, the European Union (EU) works hard to build a unified framework and address pressing security concerns, such as money laundering or terrorist financing. The proposed framework is called the Markets in Crypto Assets Regulation (MiCA) and is aimed to guarantee transparent control of the crypto industry, ensuring consumer safety and maintaining the soundness of the financial system, all while accommodating legislative differences across the region.
This is being carried out through three consultation packages, the first two of which were released in the second part of 2023 and the third in April 2024. The implementation phase for the adoption of MiCA is scheduled to conclude in December 2024, with a subsequent 18-month transitional period ending in July 2026. By this time, all entities offering crypto asset services must fully comply with EU regulations.
UK
In the UK, which is now not part of the UN, crypto assets have been legal for quite some time but have yet to be regulated. This means that purchasing, possessing, and exchanging cryptocurrency is allowed, but the government does not have any power to intervene if something goes wrong. However, this will change soon.
The UK government is finalizing legislation for crypto assets, including stablecoins and crypto staking and exchange. It aspires to finally regulate crypto and associated services, allowing it to safeguard crypto users much more efficiently.
Asia-Pacific Region
In the Asia-Pacific region, countries like Japan and Singapore have emerged as leaders in crypto regulation. Japan, for example, has established a licensing system for cryptocurrency exchanges to ensure compliance with strict regulatory standards and protect consumer interests. Singapore, on the other hand, has taken a proactive approach by introducing the Payment Services Act, which regulates cryptocurrency payment services and digital payment token services.
Conversely, countries like China and India have taken a more restrictive stance. In China, cryptocurrency trading, ICOs, and mining have been banned, and authorities have imposed strict measures to control and limit the use of cryptocurrencies in the country since 2017. India has also expressed concerns about the use of cryptocurrencies, with the regulatory authorities even considering a potential ban on private cryptocurrencies.
Conclusion
The global nature of cryptocurrencies presents unique opportunities for individuals and businesses to participate in both the global digital economy and the traditional regional economy. Therefore, governing bodies need to speed up the decision-making process regarding the regulations they will employ not to hinder the development of this industry.
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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Economy Prime journalist was involved in the writing and production of this article.