From time to time, we offer a summary of significant digital asset developments around the world to keep our clients and readers informed of global market trends. This week’s highlights demonstrate the continued advancement and maturation of regulatory regimes and national strategies to encourage innovation in the DLT space and drive adoption of digital assets globally.
· Malta: The island nation, which has attempted to attract investment by branding itself as “Blockchain Island” while navigating Europe’s money laundering laws, announced that 57 companies have failed the country’s licensing application. After touting its crypto-friendly regulatory framework, it has yet to approve any licenses.
· Portugal: One of Malta’s European neighbors also is trying to attract fintech investment, as Portugal published a plan to encourage digitization in several sectors of its national economy. The government is providing incentives for the digital transformation of business and state functions, including Technological Free Zones with tailored regulatory regimes to encourage blockchain development.
· Japan: In a further modernization of Japan’s already-sophisticated digital asset regulatory framework, the Financial Services Agency (FSA) approved two crypto associations as SROs, giving them legal authority to oversee crypto derivatives trading and security token offerings.
· China: Following the announcement about the launch of China’s Blockchain Service Network (BSN), the country approved more than 200 additional blockchain projects, roughly 25% of which related to the financial services sector. The quantity, diversity, and credibility of the companies involved in this tranche of project approvals (including Walmart China, China Mobile, China Merchants Bank, and Alibaba) reinforce our thesis of Beijing’s intent to establish a “Digital Belt and Road.”
· Iran: The Ministry of Industry, Mining, and Trade issued a license for a Turkish crypto mining company (iMiner) to operate a 6,000-rig facility in Iran. This is one of more than 1,000 licenses granted to crypto miners, who are attracted by the country’s low electricity costs.
· UAE: Abu Dhabi is moving ahead with its plans to migrate government transactions onto DLT-based platforms by 2021, while continuing to gradually refine its crypto regulations to align with FATF and G-7 standards, address stablecoins, and embrace the concept behind security tokens.
· Binance has funded a series of startups in Africa, betting that the continent’s need for better banking services will drive adoption of crypto as a more accessible payment system. We continue to believe that emerging markets such as those in Africa, India, and the Middle East will drive the long-term global social adoption of digital assets in day-to-day economic activity.
As we continue to track regulatory and geopolitical developments across the global digital asset landscape, we are always ready to share insights and develop strategies for our clients to leverage our deep market expertise and broad network across the entire space.