The markets for digital assets and cryptocurrencies have seen tremendous volatility in the recent year. Trillions of dollars were lost as a result of volatility and incidents, notably the dramatic demise of the cryptocurrency trading company FTX and the LUNA. Calls for stronger protections from regulation have been louder as these markets have expanded and their hazards have become more obvious.
But from whom we are expecting for the regulation are trying to dominate the cryptos and crypto has become rival for most of them, so who is going to save us? The question is more complex than to answer which is not possible to satisfy all of us.
So, the intriguing rules and regulations for the protection of the space are really necessary. Still, the unwanted authority over the core motive of the cryptos can not be welcomed by all the parties. The existing dilemma is making the cryptos confusing sectors for most of the underdeveloped or developing countries. Even many countries have banned the sectors so bitterly that the space has taken a long period to recover from those incidents over time.
The major incidents that bled the space so heavily are the collapse of FTX and the LUNA which has destroyed the great bullish market so badly that the market has behaved abnormally by breaking the records of the previous time by taking the BTC price to 15K levels!
Though, the market has recovered still there is a strong necessity for many regulations to make the sector a much more reliable and safer zone. And countries like the USA, India, and Australia are working very hard to save their people from such unwanted situations.
Around the world, the hype of creating central bank digital currency (CBDC) has made the space more lucrative with the massive adoption by the mass people. Even I have opened an E-CNY account in my Bank app which is the Chinese mega pilot project of CBDC.
So what will be the impact of the coming laws and regulations in the crypto world? It is hard to say but there will be some massive changes which I am expecting. The cryptocurrency business is being significantly impacted by crypto legislation. They are sometimes causing the sector to be subject to more regulation and inspection. In other instances, they are resulting in prohibitions on mining and transaction of cryptocurrencies. Although it is currently too early to predict the long-term effects of crypto regulations, they will certainly have a significant influence on how the cryptocurrency market develops. The regulatory landscape for cryptocurrencies is still evolving and it is difficult to keep track of all the latest developments but here I am trying to give you a glimpse of the current stats and concerns by the various governments around the world. However, I can provide you with some general information about the different types of crypto laws that are being proposed and implemented.
There are some specific motivations for the crypto laws and regulations for every country to protect the fraud, scams, money laundering, online illegal transactions, and funding illegal organizations or terrorist groups. Most of the important regulations which can be broadly categorized into three main groups:
Anti-money laundering (AML) and counter-terrorist financing (CFT) laws: These regulations aim to stop the financing of terrorism or money laundering using cryptocurrency.
Consumer protection laws: Laws aimed at protecting customers from fraud and other wrongdoings in the Bitcoin industry are known as consumer protection laws.
Market integrity laws: These regulations aim to stop financial crimes such as market manipulation in the Bitcoin space.
Some examples of the recent laws around the world
Developed countries like the USA is the top country to evolve in space as the world economy is mostly controlled by the USA. And India, Australia are also coping with the new technology.
El Salvador
El Salvador is a leader in the use of cryptocurrencies, having been the first nation to accept Bitcoin as legal tender in 2021. On September 7, 2021, the Bitcoin Law—passed by the Salvadoran Congress in June 2021—went into force. Important clauses in the Bitcoin Law:
Bitcoin and US dollars are both accepted as forms of legal tender.
It is mandatory for businesses to accept Bitcoin as payment.
The Salvadoran government is going to develop an app called Chivo Wallet that will allow users to send, receive, and store Bitcoin.
To increase its reserves, the government will buy 150 Bitcoins every week.
United States
Executive Order 14067- Ensuring Digital Asset Development Responsibly (March 9, 2022) The U.S. government is instructed by this Executive Order to research and create a framework for regulating digital assets. Source
Digital Commodities Consumer Protection Act of 2022 (Introduced in March 2022) This bill would create a new regulatory framework for digital commodities, including cryptocurrencies. Source
Stablecoin Transparency Act of 2022 (Introduced in March 2022) This bill would require stablecoin issuers to register with the Securities and Exchange Commission (SEC) and provide regular disclosures about their reserves. Source
European Union
Markets in Crypto-Assets Regulation (MiCA) (Adopted in June 2022) MiCA is a comprehensive regulatory framework for crypto-assets in the European Union. It will come into force in 2024. Source
Digital Finance Package (Proposed in September 2020) The Digital Finance Package includes several proposals to regulate crypto-assets, including a proposal for a pilot regime for stablecoins. Source
China
Ban on cryptocurrency transactions (2017) China has banned cryptocurrency transactions and mining. Source
Central Bank Digital Currency (CBDC) (In development) China is developing a central bank digital currency, which is expected to launch shortly. Source
India
- Ban on cryptocurrency transactions (Proposed) The Indian government is considering a ban on cryptocurrency transactions. Source
Australia
Treasury Laws Amendment (Anti-Money Laundering and Counter-Terrorism Financing) Act 2021 (Enacted in 2021) This Act requires cryptocurrency exchanges to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC). Source
Token Mapping Consultation Paper (Released in February 2022) This consultation paper seeks feedback on how to regulate cryptocurrencies in Australia. Source
These are but a handful of the several crypto laws that are being put up and put into effect globally. It's critical to be informed of the most recent changes to the regulatory environment around cryptocurrencies, as this field is still developing.
What do you think about these laws and regulations regarding cryptos around the world and how it is going to change the world's financial system, let us know in the comments, and how third-world countries will move towards the adoption of cryptos as Bangladesh is facing troubles with that now!
Have a nice day!
