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Regulatory overview: Between the CBDC Debate and BTC Fears

5 min read



Fed publishes CBDC report

Digital central bank currencies (CBDCs) are, so to speak, the centralized, state-owned twin of decentralized cryptocurrencies à la BTC and Co. While the introduction of such a digital currency in China is getting closer, the CBDC debate in the EU and the USA has been rather leisurely until now. But as of January 20th, the US central bank, the Fed a discussion paper reported on digital money. In it, the Fed attests to the fundamental potential of a CBDC to put the centralized monetary system on a digital basis. A US CBDC would continue to be most useful if it were “privacy-proof, intermediary, widely transferrable and identity-verifiable.” At the same time, however, a CBDC also harbors potential risks for financial stability. The discussion paper does not contain any concrete legislative proposals, but interested parties are invited to comment.

Malaysia is also considering a CBDC

The central bank of Malaysia is also publicly considering the introduction of a state digital currency. A decision is loud Bloomberg not liked yet, but first experiments are already underway. the Bank Negara Malaysia has also been participating in an international project since September to explore the usefulness of CBDCs for international payment transactions. The Bank for International Settlements is also participating in these experiments, as well as the central banks of Australia, Singapore and South Africa. The partners will publish their results shortly.

Russian central bank calls for BTC ban

A statement on digital currencies also came from the Russian central bank last week. But in contrast to their counterparts in Malaysia and the USA, it is not superficially a CBDC that concerns Russia’s currency watchdogs. the Bank Rosii Rather, in its January 20 report, it advocates a comprehensive ban on BTC and other cryptocurrencies. These would ultimately undermine the sovereignty of Russian monetary policy, and they are also a threat to financial stability. While BTC and Co. were previously only banned as a means of payment, the central bank is now calling for the ban to be extended. If she has her way, BTC mining should even be stopped. She sees nothing more than “unproductive power consumption” behind the BTC mining boom in Russia. It remains to be seen how Russian politicians will react to these proposals. So far, high-level statements about cryptocurrencies have been rather ambiguous.

SEC boss Gensler attests BTC exchanges need for action

Gary Gensler is not considered a bogeyman in crypto circles for nothing. Few in the US advocate tighter control over the BTC space so vehemently. In his most recent statement, Gensler read the riot act on such crypto exchanges. The trading platforms should therefore urgently take steps to submit themselves more directly to Washington’s supervision. Otherwise, the protection of investors would also fall by the wayside in 2022. At least that’s what the regulation hardliner Gensler thinks.

EU top official wants mining ban

The debate about the carbon footprint of energy-intensive BTC mining is also entering the next round. The most recent statement came from Erik Thedéen, deputy chairman of the European Securities and Markets Authority (ESMA). Opposite of Financial Times Thedéen argued that the proof-of-work process known from BTC poses a serious threat to the climate goals agreed in the Paris Agreement. His proposal: ban proof-of-work across the EU and thereby prompt the crypto industry to adapt the more energy-saving proof-of-stake process. According to Thedéen, the discussion about electricity consumption in the industry must be conducted urgently. In his home country of Sweden, it now has the status of a “national issue”.

Singapore is pulling out the plug of BTC ATMs

Advertising for digital assets and crypto-related investment offers drove several states this week. Singapore has thus decided to take a much more restrictive course on this issue in the future. As a first symbolic step, crypto-ATMs are to disappear from public space. The largest operator of these machines in the Southeast Asian city-state has already discontinued its services on January 18th. According to Bloomberg Singapore’s financial regulator was displeased that BTC and Co. were available via the machines in a comparably quick, uncomplicated and, above all, visible way. The aim is to prevent citizens from entering the volatile crypto game with an ill-considered impulse decision.

UK plans new standards for crypto advertising…

Britain’s Treasury has also been grappling with advertising for crypto services in recent days. According to a Jan. 18 press release, the government agency proposes subjecting crypto advertising to the same rules as the marketing of comparable financial products in the future: “This strikes a balance between encouraging innovation and the need for cryptoasset advertising to be fair, must be clear and not misleading.” In a spirit of consumer protection, advertising for crypto services would only be permitted if approved by the UK regulator Financial Conduct Authority (FCA) has been approved. It is not clear how the standards to be applied will turn out in detail. The UK Parliament still has to vote on the proposed legislation. The UK Treasury estimates that 2.3 million citizens hold BTC and similar assets.

… Meanwhile, Spain is introducing a risk warning

Crypto marketing has also been a topic in mainland Europe for the past week. Because Spain’s stock exchange supervisory authority CNMV published its own on January 17th thesis paper. In it, she formulates a series of criteria that advertising for services related to BTC and Co. will have to obey in the future. The demand for a binding risk warning is particularly striking. In the future, every crypto advertisement in Spain will contain this sentence: “Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost.” Larger advertising campaigns that have the potential to reach more than 100,000 people still need to be approved in advance by the authorities. The CNMV grants a period of at least 10 days before the start of the campaign for this purpose. The regulations also apply not only to companies, but also to crypto influencers. They come into force from February.

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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