Will 2022 be the year of global cryptocurrency regulation?

As 2021 draws to a close, critics and analysts are looking to next year and trying to predict the future of the market. In the world of cryptocurrencies and digital assets, volatility reigns supreme. But as more and more institutions enter the decentralized finance space, one of the biggest issues that arise is regulation.

In order to assess what the future regulation of cryptocurrencies looks like, it is 

 first necessary to assess and understand the global regulatory landscape and how it has evolved over the past 12 months. In 2021, there will be some progress in cryptocurrency regulation in almost all jurisdictions. There are several reasons why this happens.

Most notably, the U.S. has gradually become more crypto-friendly this year. For example, Foundry USA has become the second-largest Bitcoin KC. This shows the current attitude of the United States towards digital assets. While the Securities and Exchange Commission (SEC) plays a central role in digital asset regulation in the United States, rules, guidance, and enforcement actions proposed by other authorities are beginning to take shape. Federal regulators such as the US Commodity Futures Trading Commission (CFTC) Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and the Office of the Comptroller of the Currency (OCC) are advancing the regulation of cryptocurrencies within their respective purviews.

• Singapore

  

 Singapore is establishing itself as the cryptocurrency hub of Southeast Asia. By bit, Huobi and Okcoin are some of the domestic cryptocurrency exchanges that are now fully operational in Singapore. The Monetary Authority of Singapore (MAS) enforced cryptocurrency-related legislation in 2020 to regulate the cryptocurrency industry under its Payment Services Act. The regulation is mainly to protect users and protect the government from money laundering. The bill requires exchanges and digital payment solutions to be licensed for their activities. The latest news reports that more than 100 crypto companies have failed to obtain licenses in Singapore.

• Switzerland

This year, one of the jurisdictions with the most comprehensive set of regulations in Switzerland. In September 2020, the Swiss Parliament passed the Blockchain Act. The legality of exchanging cryptocurrencies and operating a cryptocurrency exchange under Swiss law was further established. The Swiss government has stated that it will continue its efforts to create a crypto-friendly regulatory environment.

•  EU

Switzerland’s geographic and political position means that its moves in this space have put pressure on the EU to become crypto-friendly to avoid the loss of all digital asset players to the landlocked country. It looks like the EU wants to regulate the digital asset industry as there are some supranational initiatives going on. The most Comprehensive 168-page Cryptocurrency Assets (MiCA) marketplace creates an EU-wide licensing framework for cryptocurrency publishers and service providers. This was proposed in September 2020 and has been under consideration since then. Its scope and length mean it also has a long journey through the European Parliament, but it's the closest thing to formal regulation across EU member states.

Britain has fallen further behind its European counterparts. In January, the U.K.’s Financial Conduct Authority (FCA) banned the marketing, distribution and sale to retail clients of derivatives and exchange-traded notes referencing unregulated transferable crypto assets, such as cryptocurrencies. At the same time, the FCA also has the regulatory power to regulate cryptocurrency companies for anti-money laundering and counter-terrorism purposes, requiring companies to register with the regulator.

• Brazil

  
  
  

Elsewhere in the world, Brazil is considering a law that would allow workers to be paid in bitcoin. This will make cryptocurrencies legal tender. This means that Brazil will be one of the first countries after El Salvador to accept Bitcoin as legal tender. A month after the passage of the bitcoin law, Salvadorans have more bitcoin wallets than traditional bank accounts. The most popular Bitcoin wallet is the government-sponsored Chivo wallet, which has been downloaded by 3 million people, or 46% of the population. By comparison, only 29 percent of El Salvadorans had a bank account in 2017.

•  2022

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There are countless reasons why the regulatory landscape has changed so much in the past 12 to 18 months. Looking ahead to 2022, the U.S. appears to be taking some action at the state and local level, such as mayors accepting bitcoin for wages and miners for cheaper energy, but are they taking bold action by their South American allies to treat BTC or other tokens as fiat, remains to be seen.

The European Union will continue to debate its proposed legislation, which could pick up the pace if cryptocurrencies heat up in Switzerland. As more institutions take an interest in the cryptocurrency space, the EU must embrace more digital asset regulation to avoid losing a significant share of the modern digital economy, while at the same time as the lines between financial firms and tech companies blur further, try to It is only a matter of time before potential risks to a more financial system are reduced.

Also in Europe, the UK may see Brexit as a key opportunity to get ahead of European peers, but judging from past evidence, interest from regulators does not appear to have reached that stage. The UK Treasury has recently consulted on the regulation of certain stable coins, particularly those linked to a base currency or asset to stabilize their value. As these talks progress, the U.K. could move away from volatile cryptocurrencies and toward state-backed digital currencies, changing the U.K.’s relationship with cryptocurrencies forever.

In conclusion, there is no certainty in cryptocurrencies. With supervision, there will be a more orderly market environment and more conducive to future development. For more blockchain news and regulatory information inquiries, please download the Bichake App or log in to the Web terminal to view.