The Global Crypto Regulation 2023 report, by PwC, outlines the developments and implementation progress of critical crypto assets rules around the world. The report shows that many regulators across the globe have either enacted regulatory schemes for dealing in crypto assets or are on the brink of doing so. The direction of travel is becoming clearer, but a lot of work remains to be done.
Here are some key developments outlined in the paper:
The report comes as the UK’s HM Treasury (HMT) is expected to soon consult on a wider framework for crypto assets. Last week, the Government also reconfirmed that it would, with the Bank of England, shortly launch a consultation into the potential development of a UK CBDC (central bank digital currency).
In addition, in October 2022, the House of Commons voted to give HMT the power to make cryptoassets a regulated financial instrument. The new legislation is included in the draft Financial Services and Markets Bill 2022, which also covers measures to bring stablecoins under the existing financial services legislation. The UK Government and regulatory authorities are due to issue a number of consultations and announcements around cryptoassets, stablecoins and a retail CBDC in 2023, strengthening the regulatory expectations for crypto-related market participants.
John Garvey, Global Leader of Financial Services, PwC, said:
“This report is a great resource for understanding the regulatory landscape for crypto and other digital assets globally. With the link between sound regulation and continued growth in retail and institutional adoption in today’s volatile markets, this deep dive could not be more timely. As noted, the US, UK and other jurisdictions are all moving forward, but at different paces. Accelerating this movement is critical as we’ve witnessed a number of high profile failures, which no doubt has eroded consumers’ trust and has led to a global sharp focus on regulators to ensure market integrity.”
European Union (EU)
In the EU, the Markets in Crypto-Assets Regulation (MiCA) – the first cross-jurisdictional regulatory and supervisory framework for crypto-assets – is expected to enter into force in 2024.
Dr. Michael Huertas, FS Legal Leader Europe, PwC Legal Business Solutions, said:
“MiCA represents a paradigm shift in how digital assets are regulated and supervised. Firms will need to take early action to move to meet the new requirements.”
In the UAE, Dubai has taken a major step forward in setting up the world’s first regulatory authority which solely focuses on virtual assets, the Virtual Assets Regulatory Authority (VARA).
United States (US)
In the US, regulators remain vocal on the risks crypto may pose to financial stability and for consumers. Federal and state regulators have monitored the digital asset markets and taken enforcement action against companies offering digital asset products and services without proper registration. The Securities and Exchange Commission (SEC) has also more broadly focused on ‘digital engagement practices’, including the gamification of trading.
In Australia, the Government announced this week next steps to its ongoing ‘token mapping’ work. The Government will consult in early 2023 on which digital assets should be regulated by financial services laws, and the development of appropriate custody and licensing settings to safeguard consumers.
The global regulatory watchdogs, Financial Stability Board and Basel Committee on Banking Supervision are due to soon lay out their expectations on how to regulate the crypto assets industry and the prudential treatment of crypto asset exposures.
For the full report you can click here.
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