Update: June 20th - July 3rd, 2022
The House Agriculture Committee held a crypto hearing that highlighted key issues, the most important of which was who will get to regulate the industry...
Happy 4th of July to all my American readers!
What better way to celebrate freedom than by thinking of the financial freedom crypto offers us. However, before we can reap the benefits of this technology, we must wait and see what governments around the world choose to do with it. This week, I offer you the latest on domestic and international crypto regulation of the past two weeks.
I hope you enjoy and see you soon.
-Katja
June 20th - July 3rd, 2022
The House Agriculture Committee held a crypto hearing that highlighted key issues, the most important of which was who will get to regulate the industry.
Before reviewing the conversation, it’s important to note the witnesses present,
Jonathan Levin - Co-Founder and Chief Strategy Officer at Chainalysis (one of the largest and most respected blockchain data platforms)
Charles Hoskinson - Chief Executive Officer at Input Output Global (one of the world's pre-eminent blockchain infrastructure research and engineering companies responsible for the Cardano blockchain)
Vincent McGonagle - Director of the Division of Market Oversight at CFTC
Dr. Christopher Brummer - Law Professor at Georgetown University Law Center
The attitude among the witnesses and (surprisingly) the vast majority of representatives seemed to be pro-crypto. The discussion focused on two main bills (the Digital Commodity Exchange Act and the Responsible Financial Innovation Act) that do two things: 1) clarify definitions and 2) give the CFTC jurisdiction over most major cryptocurrencies.
CFTC seems to be the sweetheart of crypto regulation because of its principles-based approach, which stems from the 23 principles that guide the decisions of this organization. This is in contrast to the SEC that tends to make decisions based on changing criteria. In addition to this, CFTC seems more pro-innovation and has a better vantage point over crypto than the SEC.
However, in order for CFTC to step up as the main crypto regulator, it needs Congress to grant it more regulatory authority and give it more resources.
[For an extra read about the CFTC and SEC tensions, see this article.]
Increased interest in crypto is also fueling US politics in other ways.
As a couple of representatives brought up, 20% of Americans hold crypto (that number rises to almost 60% if you also consider the Americans who have owned crypto in the past). To put this in perspective, that’s the same percentage of Americans who own stocks. Such interest in crypto is playing into the upcoming midterms by fueling political activity on both sides of the aisle.
Check out these articles for more information,
Performance of crypto-linked PACs in last Tuesday’s primaries
Push by the Democrats towards a digital dollar [For background, read about Rep. Jim Himes’ white paper for the digital dollar.]
EU policymakers finally came to an agreement regarding the Markets in Crypto-Assets (MiCA) regulatory package.
Although the final version has not been made public, this framework is the first of its scale in the EU and will take years to implement. This news is massive; however, I will wait to discuss the legislation until the official document comes out. Until then, see these two articles that give some insight into the regulatory framework,
Reflections on Europe’s Markets in Crypto-Assets Framework
EU agrees on MiCA regulation to crack down on crypto and stablecoins
Russia continues its efforts to increase crypto adoption in the country.
The Russian parliament approved a draft law that exempts crypto (and digital asset) issuers from value-added tax (VAT). This same law would also establish a new tax rate on incomes from digital assets: 13% for Russian companies and 15% for foreign ones.
Just remember, Russia used to be categorically against crypto. However, it seems the longer the war continues, the more stress is put on the Russian economy, and the greater the embrace for cryptocurrencies.
More news …
Binance signed a memorandum of understanding with Securities and Exchange Regulator of Cambodia (SERC) to develop a digital asset regulatory framework in the country.
Faustin-Archange Touadéra, president of the Central African Republic, announced plans to back a crypto initiative that would help the country enter the crypto space and institute a crypto regulatory framework.
Singapore takes three steps forward and two steps back, as it provisionally approves more crypto firms for offering payment services in the country while also pledging to be “brutal and unrelentingly hard” on any “bad behavior” from the crypto industry.
The UK Government Backtracks on a data collection rule regarding un-hosted (private) wallets.
Coinbase cracks down on KYC requirements in the Netherlands, requiring customers to submit recipients’ information when transferring crypto off the platform.