Biweekly Global Crypto Regulatory Round up (March 12 – March 26)

Regulation News

Thai central bank plans stablecoins regulations this year

Thailand’s central bank expects to issue regulations on asset-backed stablecoins this year, an assistant governor said, after warning against use of a new baht-denominated stablecoin that was created abroad.“The central bank is receiving opinions from market regulators and participants before announcing regulations,” Siritida Panomwon Na Ayudhya told a briefing.

The Bank of Thailand (BOT) will regulate foreign currency-backed stablecoins, asset-backed stablecoins, and algorithmic stablecoins that are not illegal, she said. The rules will not cover those without asset backing, such as Bitcoin or Ethereum and investors will have to take their own risks, Siritida said, reported Reuters.

Thailand’s central bank warns against ‘illegal’ THT stablecoin

The Bank of Thailand has issued a stern warning against a privately issued stablecoin pegged to the national currency, the Thai Baht.

According to a Bangkok Post report on March 18, the central bank has told citizens that Thai Baht Digital (THT) has no legal assurances or protection and that users could be at risk of cyber theft or money laundering

Citing a sixty-year-old law, the central bank’s assistant governor of the legal group, Pruettipong Srimachand, stated that any activities involving the stablecoin are considered illegal: “The creation, issuance, usage or circulation of any material or token for money is a violation of Section 9 of the Currency Act 1958.”

Other News

China CBDC Research Head: Digital Yuan Has Highest Privacy Protection 

According to a claim made by Mu Changchun, the head of the central bank’s digital currency research institute of China, the country’s digital yuan has the highest privacy protection.

Changchun made the remarks at the China Development Forum 2021, saying that there should be no concerns regarding privacy.

Crypto Exchange OKEx Korea to Close as New AML Rules Come Into Force 

The South Korean arm of the cryptocurrency exchange OKEx has decided to shut up shop rather than attempt to navigate revised regulatory hurdles that come into effect.

According to a reports, the cryptocurrency exchange has earmarked April 7 as the last day users can withdraw their digital assets and fiat currency. A spokesperson of the exchange told that the local currency market would become too difficult to navigate due to new anti-money laundering (AML) safeguards for cryptocurrency businesses.

South Korea faces strict crypto regulation and fears of centralization

According to reports, the growing cost of compliance in South Korea could push smaller crypto businesses out of the country. South Korea’s tightened crypto regulations are also coming amid updates to the Financial Action Task Force’s, of FATF’s, guidelines on cryptocurrency regulations. The intergovernmental body continues to call for heightened restrictions on the crypto space, predicated on exerting strict oversight of centralized entities like exchanges and custodial services.

On March 25, updated cryptocurrency regulations under the Act on Reporting and Using Specified Financial Transaction Information, commonly referred to as the Specific Financial Transactions Act, will come into effect in South Korea. These new laws herald significant policy changes for virtual asset service providers, or VASPs, in the country.

Morgan Stanley Reportedly in Talks for Bithumb Acquisition

Morgan Stanley has entered into negotiation to acquire stakes in Bithumb, the largest South Korean cryptocurrency exchange, according to local media.

An anonymous source from within the exchange has revealed that the US investment bank has approached Vidente, which owns around a 10 percent stake in Bithumb Korea, and is considering to invest anywhere between 300 billion and 500 billion Korean won (between $254 million to $441 million)

South Koreans Are Required to Pay Taxes for Crypto Holdings in Overseas Exchanges, Authorities Warn

According to reports, South Korean tax authorities are unstoppable in keeping crypto holders in their eyes and making them accountable to pay taxes. The National Tax Service (NTS) has issued a warning to the crypto traders that they have to report their earnings even from tokens held in foreign exchanges.

VoloFin to launch blockchain invoice financing platform

Specialty finance firm VoloFin will launch a blockchain invoice financing platform on April 1 for investors and small and medium-sized firms (SMEs) in the United States, India and Singapore, its chief executive told Reuters, reported a crypto news site.

Ireland Pushing Crypto Entities to Comply with AML Laws

Ireland has proposed a new regulation that would prevent users from trading cryptocurrencies anonymously.

The new anti-money laundering (AML) rules require cryptocurrency entities to begin implementing measures, starting from the next month, that would prevent anonymous trading of these currencies, reported crypto news website.

Hong Kong now exploring retail CBDC in upcoming Project Aurum

According to reports, Hong Kong is exploring a general-purpose central bank digital currency (CBDC) to be distributed through commercial banks and payment service providers, said Howard Lee, deputy chief executive of the Hong Kong Monetary Authority, during the BIS Innovation Summit 2021 held this week.

Bank Indonesia in ‘no hurry’ over digital currency

Bank Indonesia (BI) is mulling the idea of creating rupiah-denominated digital currency in line with the global trend, but Indonesian stakeholders and observers have told The Jakarta Post that the plan had a long way to go despite the potential benefits.

According to the Bank for International Settlement (BIS), 86 percent of central banks across the globe are engaging in activities related to central bank digital currency (CBDC), with many still in the experimental stage, reported a crypto news site.

Thailand Regulator Withdraws Proposal of Harsh Crypto Investment Rules

Thailand’s Securities and Exchange Commission (SEC) has scrapped its new crypto regulations draft after it received massive backlash from the local community for setting a high bar for investors.

According to a Bangkok Post report, the proposal wanted the crypto investor’s minimum annual income to be 1 million baht (around $33,000), which is too high compared to Thailand’s per capita GDP of around $7,800, as per World Bank data. The draft rules proposed a mandatory income verification of all Thai citizens willing to invest in cryptocurrencies, which received public backlash within hours of being published.

U.S Government to unveil Crypto nemesis before end of July

According to reports, Bank of Boston and Massachusetts Institute of Technology are jointly working on delivering a Central Bank Digital Currency prototype before the end of July.

Such digital assets could fundamentally change US citizens’ use of capital, leading some financial brands to lobby the Fed and Congress to pause its creation. Leading financial brands and payments processors are anxiously watching the Fed’s push in creating an electronic alternative to cash Americans carry in their wallets or what some people call the Fedcoin.

BOJ forms panel to help guide central bank digital currency experiment

Set to begin experimenting in how to operate a central bank digital currency, the Bank of Japan said that it has formed a committee bringing together policymakers and lobbyists from the banking and finance sector to help with the project.

“While there is no change in the BOJ’s stance it currently has no plan to issue a central bank digital currency, we believe that initiating experiments at this stage is a necessary step,” BOJ Executive Director Shinichi Uchida said in opening remarks at the first meeting of the committee.

The first phase of experimenting with a central bank digital currency (CBDC) will begin in April, and the BOJ aims to draw on the private sector for support and expertise, reported Reuters.

Coinbase valued at USD 68 billion ahead of U.S. stock market listing

Coinbase is a San Francisco-based cryptocurrency platform that allows traders and stock market players to buy and sell bitcoin. According to a report by Reuters, Coinbase is the largest cryptocurrency exchange in the United States and recently, a private market transaction has valued the exchange at USD 68 billion for Financial Year 2021 ahead of a planned Stock market listing.

According to the data mentioned in the regulatory filing, Coinbase weighted at an average share price of USD 28.83 per share as of third quarter of Financial Year 2020 that ended on September 30th 2020. As opposed to this figure, the rise in per piece share price on an average is recorded at USD 343.58 per share traded at the private market sold in the first quarter of 2021 through March 15, as mentioned in a report

Crypto.com Expanding Payment Card to Australia After Becoming Visa Principal Member

According to reports, Hong Kong-based Crypto.com has become a principal member of Visa Australia, allowing it to expand its card offering to the nation.

The principal membership means Crypto.com is able to directly offer the Visa card in Australia, a factor it says allows the firm to “have a direct relationship with cardholders.” Laying the groundwork for the move, the firm secured an Australian Financial Service License through an acquisition in December.

Huobi Discusses Crypto Regulations at GDF Asia Conference

At the 2021 GDF Asia Conference, the Huobi Group discussed developments in cryptocurrency regulations in Asia. Digital Global Finance (GDF) held its 2021 Asia Conference on March 23. There, a pair of Huobi executives spoke on crypto regulations and adoption during two of the conference’s sessions.

Mariah Zhao, COO of Huobi Technology, was among the first panel who discussed crypto and digital assets for traditional asset managers. Meanwhile, Elaine Sun, Compliance Director of Huobi Technology participated in the discussion regarding the direction of regulations in Asia, reported a crypto news site.

Crypto Bank Sygnum Offering Yield on Its Swiss Franc Stablecoin

Swiss crypto bank Sygnum is launching a yield product based on its own stablecoin, DCHF.

The licensed Swiss bank said in a press release that its three-month fixed-term deposit product will generate 0.75 percent yield per year. Sygnum claims to be the first regulated bank to offer returns on its own stablecoin. The product was launched to meet demand for a yield-generating money market product denominated in Swiss Francs, according to the announcement.

Chinese tech firm Meitu invests an additional £35.8M in BTC and ETH

Meitu, a China-based software development company, has invested an additional £35.8 million in Bitcoin (BTC) and Ethereum (ETH). A report unveiled this news on March 18, noting that this purchase has seen the firm’s crypto holdings swell to £64.45 million. Reportedly, the company bought 386.08 BTC at £15.5 million and 16,000 ETH for approximately £23.3 million, reported a crypto news website.

Ethereum alternative Neo launches new version as China bolsters blockchain

Neo, an Ethereum alternative and one of China’s oldest blockchain protocols, is starting to roll out a third version of its public blockchain infrastructure, dubbed N3. N3 is a make-it-or-break-it moment for one of China’s most promising and globally recognized blockchain projects. The team has been working on the update for years. On paper, N3 hits all the right notes for becoming a widely used blockchain protocol. But it will need to stand out from an increasingly competitive crowd.

The upgrade comes at an opportune time: The Ethereum network is facing critical capacity challenges, meanwhile the Chinese government highlighted blockchain as a strategically important technology in the latest Five-Year Plan, reported a crypto news outlet.

China says ‘fully anonymous’ digital yuan is ‘not feasible’

The Chinese government is hoping to maximize the privacy settings on the upcoming digital yuan, the state’s native Central Bank Digital Currency (CBDC), a report on local publication SCMP said.

Officially the Digital Currency, Electronic Payment (DCEP), the Chinese digital currency is backed on a 1:1 basis with the yuan and is on track to become the world’s first state-backed stablecoin.Current products on the market, such as Tether and others, are offered by operated by private companies and are, in most cases, unregulated.

EU imposes sanctions on Chinese officials over rights abuses – Official Journal

Crypto derivative platform Bybit announced in an update to its customers that it had ceased to provide all services to U.K. customers. These users have until March 31 to close all their positions and withdraw all their balances. Thereafter, users in the U.K. “will be restricted from accessing or performing any trading activities on the crypto platform. The Finance Conduct Authority had earlier banned crypto derivatives in the country.

How The Philippines Has Welcomed Cryptocurrency With Open Arms

According to reports, cryptocurrency is on its way to becoming mainstream in the Philippines, with innovations like rural bank integration, BTC ATMs, and gaming rewards acting as reliable early indicators. It is reaching mass adoption was the consensus by experts from the Bangko Sentral ng Pilipinas (BSP) and industry leaders during the webinar held on March 17th by the European Chamber of Commerce of the Philippines (ECCP) and The Fintech Philippines Association.

Binance to Partner With Singapore-Based Platform CapBridge to Broaden Its Services

According to the Binance blog post, the legally non-binding agreement indicates the two firms intend to build a strategic security token offering (STO).

Singapore-headquartered firm CapBridge was founded in 2015. It is regulated by the Monetary Authority of Singapore (MAS) and backed by the Singapore Exchange. CapBridge has two separate arms: a distribution arm that holds a Capital Markets Services License and the 1exchange, which is MAS-regulated, built on blockchain technology and holder of a Recognized Market Operator license in Singapore.

India to propose cryptocurrency ban, penalising miners, traders: Report

India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets, a senior government official told Reuters in a potential blow to millions of investors piling into the red-hot asset class.The bill, one of the world’s strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading and transferring crypto-assets, said the official, who has direct knowledge of the plan.

The measure is in line with a January government agenda that called for banning private virtual currencies such as bitcoin while building a framework for an official digital currency. But recent government comments had raised investors’ hopes that the authorities might go easier on the booming market, reported a crypto news site.

Indian govt tells companies to disclose cryptocurrency trading; industry welcomes move

According to reports, after dilly-dallying over legalising or banning cryptocurrencies, the Indian government has finally taken an encouraging step towards regulating digital currencies. The Ministry of Corporate Affairs (MCA) has made it mandatory for companies to disclose crypto trading/investments during the financial year. Experts see it as a positive step and expect the taxation rules to follow through.

Some crypto assets highly risky, investors may lose all their money, warns EU markets regulator

Prominent markets regulator European Securities and Markets Authority (ESMA) warned investors that some crypto assets are highly risky and there is the possibility of them losing all their money. In its first Trends, Risks and Vulnerabilities (TRV) report of 2021, the Paris-based regulator said there is a high risk for investors in non-regulated crypto assets. “Some crypto-assets are highly risky and speculative…consumers must be alert to the high risks of buying and/or holding these instruments, including the possibility of losing all their money.”

“In the boom years of crypto between 2012 till about 2018, there was a lot of issuance of cryptos which didn’t make sense. Many of them are still in the market and unregulated. So, if you are an uneducated investor and just want to speculate, then investing in cryptos is the wrong place,” Mathew Chacko, Partner at law firm Spice Route Legal said, reported a local news site.

Launch of Euro stablecoin Lugh, backed by SocGen bank deposits

French startup Lugh announced the launch of a new Euro stablecoin on the Tezos blockchain, with associated bank deposits held by Société Générale and audits from PwC and Maghreb.

The announcement also says that French supermarket chain Groupe Casino (2020 revenues €32 billion / $36 bn) has plans to use the stablecoin both as a means of payment and for rewards.

Jamaica’s Central Bank to Pilot CBDC Beginning in May

The Bank of Jamaica (BoJ) is planning to pilot its central bank digital currency (CBDC) in May and is working with Ireland-based technology firm eCurrency Mint to support the rollout. According to an announcement, the BoJ said that “after an extensive procurement process” it had selected eCurrency Mint to support its pilot program.

Between May and the end of December this year, the Jamaican central bank will pilot the CBDC in the bank’s fintech regulatory sandbox.The CBDC is then expected to be officially rolled out nationally in early 2022, and eCurrency Mint will be the provider, said the BoJ.

First Bitcoin ETF approved in Latin America

The first-ever bitcoin exchange-traded fund (ETF) to receive regulatory approval in Latin America is reportedly set to go live in Brazil this summer.

QR Capital, the parent of Brazilian blockchain asset management company QR Asset Management, announced the ETF launch today and indicated that the product would be listed on Brazilian stock exchange B3. According to a translated report from CNN Brasil, it should be listed by June and it will be referenced in the bitcoin index of the Chicago Mercantile Exchange’s (CME) futures contracts, reported a crypto news site.

 

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