As the U.S. crypto community continues to react to the SEC’s new framework for token classification, we would like to shift our focus this week back to the global arena, where there have been numerous developments on all sides of the spectrum:
- The G20 announced plans to tackle virtual currency AML and Counter-Terrorism Financing (CTF) regulations at its June summit in Japan, a continuation of its role as one of the most proactive bodies looking at crypto regulation from a multinational perspective.
- Financial Stability Board (FSB) Chair Randal Quarles sent a letter to the G20 Finance Ministers and Central Bank Governors stating that “for the June G20 meeting, the FSB will deliver a report on the financial stability implications of decentralized financial technologies for the governance of financial regulation.” FSB already sent the G20 a directory of crypto-asset regulators around the world, a helpful reference that includes both countries and international organizations.
- China has again proposed banning crypto mining in the country, which could have huge implications for market giant Bitmain, among others. This would bring Beijing even further into the anti-crypto sphere following its outright ban of ICOs in 2017.
- On the other side of the equation, Pakistan — which last year officially banned cryptocurrency trading and deemed virtual currencies illegal — is introducing new regulations to “monitor and regulate digital currency” in the country. Ironically, it is taking this action — as well as exploring the creation of its own national cryptocurrency, according to the head of its central bank and its finance minister — at the urging of the Financial Action Task Force (FATF), which sets international AML/CTF standards and continues to include Pakistan on its list of countries with inadequate counterterrorism controls.
- Japan’s Financial Services Agency (FSA) has initiated an interesting discussion on whether Bitcoin should continue to be called a “virtual currency,” stating that “cryptographic asset” is a more appropriate term given Bitcoin’s borderless nature and applications well beyond a means of payment/exchange. Given the expected continued growth of the Japanese crypto scene in the next year, we will be interested to see whether these new ideas make their way into official FSA guidance.
We largely see these developments — as well as the continuation of new types of enforcement activity in countries such as Canada and Singapore — as indications of the continued maturation and mainstreaming of virtual currency on the global stage. This is why BitOoda’s recently-published white paper proposes that U.S. agencies study and adopt global best practices to improve their approach to crypto governance here in the U.S. As BitOoda expands our global client basis and our industry partnerships, we will continue to monitor and provide insight into both short-term developments affecting the markets, and the long-term evolution of the global digital asset ecosystem.