What to do with BTC and Co.? Politicians from all over the world again gave very different answers to this question. Last week in the regulatory overview.
IMF: Cryptocurrencies undermine financial stability
the International Monetary Fund (IWFF) has warned of the volatility of crypto assets. The organization sees the rapidly growing crypto market as a serious threat to global financial stability. In a blog post on December 9th, the IMF therefore called for a “comprehensive, consistent and coordinated” regulatory approach for BTC and comparable digital assets. The cross-border nature of cryptocurrencies therefore poses major challenges for national regulatory approaches.
Instead, international solutions are required. Specifically, the IMF is calling for a license for BTC exchanges and other service providers in the sector. The crypto engagement of banks and comparable financial institutions should also be subject to a strict catalog of requirements. According to the IMF, there should also be regulatory requirements for digital assets and crypto services. Depending on whether a token appears more as an investment product or as a means of payment, the government should deal with it differently. The IMF wants to promote “useful crypto asset products” in a “favorable environment”.
Russia at the crypto crossroads
Two reports from December 16 suggest that Russia is about to make a fundamental decision on cryptocurrencies. Because on the one hand reported Reuters that the central bank of the giant state is aiming for a general ban on crypto investments. The institution therefore sees the increasing volume of transactions as an increasing threat to financial stability. By contrast, Anatoly Aksakov, chairman of the State Duma’s financial market committee, painted a more nuanced picture on the same day. Because the Russian news agency Interfax reported that according to Aksakov, two opposing regulatory approaches were up for debate in government circles. In addition to a general ban, there would also be a proposal to legalize crypto exchanges under strict regulatory supervision. According to Aksakov, 2022 will be the decision year.
Myanmar’s democracy movement relies on Tether (USDT)
Since the coup on February 1, Myanmar has actually been known for its restrictive crypto policy. Under the supervision of the ruling military junta, the central bank of the Southeast Asian state banned all cryptocurrencies in May. While decentralized and difficult to control means of payment are a thorn in the side of the dictatorial military, the opposition movement is discovering the advantages of this asset class. Because the oppositional National Unity Government (NUG) announced on December 11th that it would recognize the stablecoin tether (USDT) as an official currency in the future. The NUG is a kind of parallel government that emerged from the amalgamation of various democratic forces. It sees itself as the only legitimate representation of the people and is recognized in this role by the EU Parliament. The NUG intends to use Tether for discrete domestic transactions. The company behind Tether recognized in the NUG decision also a declaration of confidence in the US dollar.
US Senators continue to oppose controversial crypto paragraphs
When Joe Biden passed his monumental infrastructure package, the alarm bells rang in the US crypto lobby. Because the law provides for a transaction obligation for all crypto brokers from 2024. Since the term broker is not really precise, BTC miners and even blockchain developers could also be affected by the reporting requirement, purely hypothetically. That doesn’t seem particularly likely. However, there is no clarity on this point. Six senators from both parties therefore turned in one on December 14th joint writing to the US Treasury Department. In it they call on the incumbent finance minister, Janet Yellen, to specify the term broker as soon as possible. The authors continue to emphasize that this is to maintain the supremacy of the USA in the financial sector.
Tonga in BTC fever
Ever since El Salvador recognized BTC as an official means of payment, the crypto community has begun the great guesswork: Which state will be the first to follow in the footsteps of the South American country? It looks like Tonga could win this race. A former MP from the Pacific island state confirmed by tweet that his country was working on the official recognition of BTC. It could be as early as October 2022. The reasons for introducing BTC are likely to be similar to those from El Salvador. Both states are dependent on remittances from citizens who work abroad. With BTC, this cross-border payment transaction could become much easier and cheaper. If the former MP is to be believed, Tonga could soon get into mining with volcanic energy. With this, too, the island state may follow the example of El Salvador.