Schlagwort: crypto regulation

Medvedev is a former Russian president and prime minister and currently the Deputy Chair of the Security Country.

Russia’s intention to ban cryptocurrencies has elicited reactions from across the board, with many other people voicing opposition to the move for various reasons.

Former Russian president Dmitry Medvedev, who also had a stint as the country’s prime minister, has added to the many who think the move would not be the best course of action from Moscow.

Medvedev is also Russia’s Security Council deputy chairman.

In an interview with Tass, he noted that he believes central bank regulators will find a better way to deal with the matter. However, he said that he doesn’t think the restrictions will achieve what regulators aim at.

According to Medvedev, calls from the Bank of Russia around crypto regulation that seek to see crypto-related activities banned could end with the opposite effect to the desired results.

“To be honest, when you try to ban something, this very often leads to the opposite result,” he told Tass.

Ban would slow down innovation and sideline Russia

Medvedev’s comments come just days after Russian President Vladimir Putin asked the central bank, and other government regulators, to strike a consensus on the proposed regulation of cryptocurrencies.

In its report on crypto and related activities in Russia released on 21 January, the central bank noted what it called risks and threats, and proposed a total ban. With this move, the country would not allow activities such as trading, mining, and usage.

Among those against the proposed ban are Maxut Shadayev, the Minister for Digital Development, and Anatoly Aksakov of the State Duma. The Russian Association for Electronic Communications (RAEC) also released a statement opposing the plans, noting that the ban risked sidelining Russia and slowing down innovation in the country.

According to Shadayev, a total ban could see the country lose experts and specialists in the innovation space. Meanwhile, Aksakov wants to see cryptocurrencies declared legal, with the government putting in place mechanisms to strictly monitor and supervise the industry.

Russia is not the only country to consider banning cryptocurrencies or adopting stricter regulations.

India had a bill seeking a crypto ban reconsidered earlier in the year, while in 2021, China embarked on a severe crackdown on the crypto sector. The Chinese crackdown forced miners and major crypto companies to relocate to other countries as authorities banned crypto mining and trading.

The US has so far not indicated taking such a move, but industry experts say the country could adopt tougher regulations following recent reports on the sector.

Despite the regulatory uncertainties, many within the crypto sector and across mainstream institutions believe crypto and the underlying blockchain technology ‚is here to stay.‘

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• El Salvador adopted Bitcoin as legal tender in September 2021 and wants to build a ‘Bitcoin city’.

• The IMF says the cryptocurrency poses threats to the country’s financial stability and consumer protection.

The International Monetary Fund (IMF) has advised El Salvador to reconsider its decision on Bitcoin as legal tender, citing several risks it says are associated with the use of the cryptocurrency.

El Salvador became the first sovereign state to pass a law adopting Bitcoin as legal tender in May 2021. The Bitcoin Law became effective in September, making the cryptocurrency money and mandating its use across the country.

The government distributed $30 (roughly £22) worth of Bitcoin to every citizen with a Chivo wallet account, with over 200 Bitcoin ATMs installed to aid in the adoption across businesses.

Although the move faced several challenges earlier on, President Nayib Bukele has maintained the country will ensure the use of Bitcoin works.

But the IMF has never warmed up to this idea, with the latest comment one among many it has issued since last year.

In a statement published on Tuesday, the global lender’s directors said making Bitcoin legal tender posed large risks. They pointed out that apart from the potential impact on financial stability, the cryptocurrency could also put the country’s “financial integrity and consumer protection,” at risk.

The IMF thus “urged the authorities to narrow the scope of the Bitcoin law by removing Bitcoin’s legal tender status,” the statement continued.

President Bukele has previously touted the construction of a Bitcoin City, with the project hinged on profits from price increases and a $1 billion cash injection via Bitcoin bonds.

But the global financial institution also took issue with that, saying El Salvador’s plans for Bitcoin-backed bonds were another concern. According to the IMF report, these plans also posed risks to the country’s financial integrity.

Despite the reservations, the IMF was positive about the potential for growth in digital payments as promoted via El Salvador’s Chivo e-wallet. Speaking at the end of a consultative forum with the Central American country, IMF directors noted the digital wallet could “boost financial inclusion.”

However, they urged that the country needed to adopt stricter regulations in the quest to have the ecosystem properly supervised.

Last week, he announced the country had added another 410 bitcoins to its treasury as they took advantage of the digital asset’s price decline.

Bitcoin’s price rose to around $69,000 in November 2021 before correcting heavily to lows of $33,000 in January. At the time of writing, the cryptocurrency had recouped some of the losses and was trading around $38,200.

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• Powell says nothing would prevent a well-regulated stablecoin from coexisting with a US CBDC.

• He also revealed that a much-awaited report on cryptocurrencies was ready for release within weeks.

Cryptocurrencies and a US central bank digital currency can coexist, according to comments made by Federal Reserve Chair Jerome Powell.

The Fed chair said this when answering a direct question on the topic from Sen. Pat Toomey during Powell’s re-nomination hearing on Capitol Hill.   

The lawmaker wanted to know if there was anything that would prevent the coexistence of a Fed digital dollar and stablecoins. 

According to Business Insider, Powell responded with a “no, not at all.”

His response suggests that if Congress okayed a CBDC and Fed were able to launch one, nothing would “preclude a well regulated, privately issued stable coin from co-existing” within the same financial system as the digital dollar.

An example would be USD Coin (USDC), a US dollar-pegged stablecoin launched by Circle and Coinbase. 

Crypto report ready

Powell also said that the long-overdue report on digital currencies should be out soon, putting the timeline towards that within weeks.

He told Sen. Mike Crapo that the report on cryptocurrencies was ready and that the delay in releasing it was largely down to monetary policy adjustments.

He noted that coming up with the report was a tough task and that the agency “didn’t get it quite to where [it] needed to get it.” However, it’s now ready for publication.

“The report really is ready to go and I would expect we will drop it, I hate to say it again, in the coming weeks, but it really is in a situation where it’s ready to go,” the Fed Chair reiterated.

According to Powell, the structure of the engagement with the report will mainly constitute “asking questions and seeking input from the public,” and not merely taking predetermined positions on issues.

But that doesn’t mean that the Fed wouldn’t be taking positions, he added.

Powell said in December that he didn’t think crypto posed any threats to the stability of the US financial system. He also earlier told Congress that the Fed was not looking to take China’s route and ban cryptocurrencies.

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The SEC seeks more regulatory enforcement in the crypto sector in 2022, according to chair Gary Gensler.

US Securities and Exchange Commission (SEC) chair Gary Gensler has once again reiterated the government agency’s outlook on crypto tokens, saying the next step is to see security tokens properly classified as such.

As well as talking about private companies and equity firms, the SEC chair briefly touched on the use of crypto tokens as a form of raising money to support innovative technologies within the broader crypto market.

The SEC chair said that crypto tokens and other forms of crowdfunding are free to raise money from the public, but the promoters and sponsors of these offerings should know that the tokens fall within the securities laws.

The premise goes back to the Howey test that looks at whether investors put money into the project expecting a return on their investment based on the efforts of the team.

Crypto promoters to avail  all sets of disclosures to investors

Gensler made the comments during an interview on CNBC’s “Squawk Box” on Monday.

He noted that raising funds for a project from the public requires that they (investors) get all the disclosures necessary for them to make wise investment decisions. The securities laws, he added, are there to protect the public against fraud and scammers.

Commenting on the SEC’s agenda for the crypto market, Gensler said the main goal is to bring all security tokens within the purview of the securities laws.

The SEC chair believes that the means of raising funds from investors isn’t an issue, be it through cryptocurrencies or the newer special purpose acquisition companies (SPACs). What’s important for the SEC is to ensure consumers get the protections they deserve.

„We are going to take up again a project around driving greater competition and efficiency in the private fund space,“ says SEC Chair @GaryGensler. „We are going to see if we can propose some rules to drive more transparency and competition.“ pic.twitter.com/eeUO6iwbXP

— Squawk Box (@SquawkCNBC) January 10, 2022

On insider trading

Gensler also touched on the issue of insider trading, noting that the SEC will vigorously enforce the laws guiding insider trading, whether by company insiders such as CEOs or members of Congress privy to non-public information.

He however added that all the issues of insider selling are pegged on one word: trust.

He noted:

„Our system of finance comes down to one basic word and it is trust. Protecting against insider trading whether it is at a company or whether it is a government official, both are important to the basic trust.“

The SEC vs. Ripple case

The comments relating to securities laws come even as the SEC’s case against Ripple and its top executives continues. The watchdog brought a lawsuit against Ripple Labs for what the agency said was illegal sales of the XRP token.

Ripple has maintained the token isn’t a security and questioned prior pronouncements that suggested Ether (ETH), the native token on the Ethereum network, wasn’t a security token.

During the interview, Gensler said he could not comment on individual crypto projects, responding to a question on why the SEC does not see ETH as a security token as it does XRP.

The SEC has in the past charged several celebrities for touting various crypto initial coin offerings (ICOs), including Floyd Mayweather, actor Steven Seagal, and DJ Khaled.

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Chris Giancarlo says having a single entity like a crypto bureau regulating cryptocurrencies is something Congress should consider.

2022 finds the crypto industry looking forward to more regulatory clarity from the US and across the globe; with some like the CEO of crypto exchange FTX recently noting that this would be a harbinger of even more institutional involvement in the sector.

The next few months could prove pivotal, going by what happened in 2021, including the formation of the President’s Working Group on Crypto and then the crypto executives‘ hearing involving lawmakers on Capitol Hill. 

However, while the industry is optimistic that clarity will come out of all these steps, some industry observers think the approach to the topic as shown over the last several months has been nothing but “defensive and reactionary.”  

That’s the view of Chris Giancarlo, the former Commodity Futures Trading Commission (CFTC) chair, who commented on the broader crypto regulatory climate in the US while speaking at the American Enterprise Institute.

Giancarlo took issue with the Biden administration over the release of a report on stablecoins last year.

According to him, there’s everything wrong with a regulatory outlook if the readings from a special working group report indicate that authorities are focused more on unearthing what is likely to be negative impacts of the sector, rather than looking at regulation at what positives the sector can have on innovation if “properly” regulated.

The ex-CFTC chair noted that not taking a proactive approach to the question of crypto regulation is poised to derail efforts towards financial inclusivity.

The former CFTC chief also believes proper regulation will come with the administration working on a new agency specifically targeted for the crypto industry. He advocates for a Congress bill seeking to have cryptocurrencies regulated by a body jointly overseen by the SEC and the CFTC.

It’s an idea some within the crypto space say can work- with the result being a situation where the same asset class does not get different approaches from the two government agencies.

Giancarlo argues that such a crypto bureau would have authority over cryptocurrencies as a whole, not where the CFTC and SEC take divergent regulatory stances.

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