As much of the world’s regulatory and economic policy attention shifts back toward a strategy in response to the Coronavirus outbreak, regulators in various countries continue to tighten and fine-tune their respective domestic frameworks for digital assets. We offer this roundup to keep our clients up to speed with global developments and share insight on current attitudes and approaches in key overseas markets.
· South Korea: Weeks after the main U.S. bank regulator ruled that banks can provide custody for digital assets, two of South Korea’s biggest banks — KB Kookmin Bank and NH Bank — have announced they are initiating the development of crypto custody services. While we have yet to see those types of developments in the U.S., these actions by our Asian counterparts could be an indicator of things to come on the U.S. banking front.
· China: State-run commercial banks in China are actively testing the digital wallet infrastructure on which the country’s digital currency will operate, indicating China’s continued push toward the full launch of its CBDC.
· Japan: The new head of Japan’s FSA is focusing on developing a CBDC, rather than loosening domestic regulations on digital asset firms and cryptocurrency trading. Japan has one of the world’s more well-established digital asset regulatory and governance frameworks.
· Malaysia: Similarly, Malaysia’s securities regulator is looking to extend the country’s existing digital asset rules to wallet providers, as it proactively monitors the compliance to the country’s securities laws by firms operating in the country.
· Russia: President Putin signed a bill into law that made it legal for properly-registered companies to issue digital securities on the blockchain. A second bill regulating — and possibly restricting — crypto trading activities in Russia is expected to be passed later this year.
· Australia: Acknowledging that the country’s regulators have been “uncertain” in their approach to governing emerging technologies such as blockchain, one of Australia’s state governments stated it will pursue a flexible and “outcomes-based” approach to capture the benefits of innovation while continuing to manage investor risk.
We continue to believe that foreign regulatory approaches offer useful precedents that U.S. agencies should study and assess as part of a broader effort to develop a modern regulatory framework reflecting the evolution of digital finance. BitOoda continues to keep a close eye on market developments around the world to ensure we remain optimally postured to work with our clients to manage risk and pursue the best strategies and opportunities across the digital asset ecosystem.