Cryptocurrency Regulations: A Global Perspective
For those keeping tabs on blockchain & cryptocurrency regulation, 2024 is shaping up to be an intriguing year with moves to strengthen the monitoring of stablecoin arrangements, a deeper examination of the DeFi domain, and the likelihood of further synergy between the disciplines of crypto and AI.
It goes without saying that policymakers and regulators worldwide will be behind all of these efforts. They will establish new rules and standards that will have big effects on the crypto area.
Of course, major international players are already busy developing crypto and Bitcoin regulations specific to their markets.
Crypto Regulations Around the World
If you want to know how the global crypto ecosystem impacts consumers and companies throughout the globe, you need to know how crypto policies work around the globe.
The U.S.
The United States has established a multi-agency framework to regulate the sector. The Internal Revenue Service (IRS) considers cryptos property for tax purposes. This implies that if you sell or trade your cryptocurrency, you may be subject to capital gains tax. Products that generate money, such as mining or staking, are considered income by the IRS.
Financial Crimes Enforcement Network (FinCEN) enforces current financial crime legislation to protect the sector from the dangers of money laundering and the funding of terrorists. As a result, gatekeepers must follow the Bank Secrecy Act. If you conduct business in fiat currency, you must disclose purchases or sales over $10,000 and do client due diligence procedures.
Cyber-related assets are regulated by the SEC. Because it does not consider Bitcoin or Ethereum securities, the SEC does not have authority over them. Yet, Bitcoin exchange-traded funds (ETFs) are subject to regulation by the SEC. Not only that, but it oversees cryptocurrency exchanges like Coinbase.
Of course, this approach has not been entirely successful as the famous SEC vs. Ripple legal feud, one of the biggest crypto regulations news, may end in the crypto company’s favor, especially considering the SEC’s hesitancy about filing an appeal to the latest order.
The UK
The British government is always working on new crypto regulation frameworks. Interestingly, any business that offers digital currencies must be approved by the UK’s Financial Conduct Authority (FCA), a government body that has banned BTC futures and options in the retail environment.
According to the finance ministry, all businesses that “deal directly with UK retail customers” should receive proper authorization for crypto trading, no matter where they are based.
Towards the end of 2023, the FCA unveiled its travel rule for cryptocurrency transactions. Because of this, cryptocurrency exchanges need to gather more data on wallet transfers. All parties involved in the transaction must be identified. There were also talks about how to regulate crypto assets that are used for gaming. Nevertheless, the British parliament shot down the plan.
EU
The European Union has also been hard at work for an effective legal regulation of cryptocurrency. Swedish Finance Minister and EU President Elisabeth Svantesson said that the FTX crash demonstrated the critical need to pass regulations to safeguard Europeans’ investments in these assets and stop the abuse of the cryptocurrency market for criminal activities like money laundering and terrorism funding.
The goal of the European Union is to ensure that all member states have consistent cryptocurrency and BTC regulation protocols. For instance, cryptocurrency assets are explicitly addressed under the most current Anti-Money Laundering Directives. As a result, interested parties must notify their country’s financial intelligence section of any questionable activity.
Also, exchanges have to list their accounts and report deals worth more than €10,000. One such regulation that the EU is working on is MiCA, or the Markets in Crypto-Assets Regulation. It covers a vast spectrum of cryptocurrency service providers, such as exchanges, wallets, and DeFi Platforms.
Key Recommendations
To improve the new cryptocurrency regulations, we need to promote innovation and crypto perspectives in the field of digital assets with the goal of bringing cryptocurrencies under regulatory control.
Here are some general suggestions:
- Licensing: Virtual Asset Service Providers (VASPs) must be required to get a license or register and be subject to the necessary AML/CFT regulations.
- Customer Due Diligence (or CDD): Governments must make sure that VASPs carry out CDD protocols, which include confirming the names of customers and keeping an eye on transactions for unusual activity.
- Record-Keeping and Reporting: VASPs are required to keep track of all transactions and notify the appropriate authorities of any questionable activity.
What About the Global Crypto Regulation Framework?
When it comes to overseeing digital assets and cryptocurrency, particularly Bitcoin regulation, the IOSCO has put forth 18 recommendations.
Because crypto assets trade on a global scale, which puts investors at “significant risk of harm,” the agency calls for more uniform regulation and supervision of the industry.
Moving forward, the World Economic Forum has highlighted that we may need a universal framework to better handle this unregulated sector, stating that a unified global crypto market regulation framework is “not just desirable, but necessary.”
Disclaimer
In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.
About The Author
He's a seasoned writer known for crafting compelling narratives that engage audiences and drive brand growth. With a keen eye for detail and a passion for storytelling, Kenth excels at turning complex ideas into eye-catching marketing messages.
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He's a seasoned writer known for crafting compelling narratives that engage audiences and drive brand growth. With a keen eye for detail and a passion for storytelling, Kenth excels at turning complex ideas into eye-catching marketing messages.
