tl;dr
In the rapidly evolving landscape of blockchain technology, regulatory compliance has emerged as an unavoidable imperative, as evidenced by significant regulations introduced by the European Union, the United Kingdom, the United States, and China. The European Union's MiCA regulations prioritize inn...
The United States is navigating legislative proposals and enforcement actions, reflecting a complex regulatory environment, while China has maintained stringent prohibitions, albeit with hints of potential regulatory cooperation. These developments underscore the critical importance of understanding and navigating blockchain governance in the face of evolving regulatory frameworks.
If there’s one point CoinGeek has emphasized over the years, it’s that regulatory compliance is unavoidable for those who want to build apps and startups that use blockchain technology and digital currencies. While many in the industry chose to either ignore laws and regulations or put off thinking about it until it became a pressing issue, others have been preparing for the inevitable. As the European Union, China, the United States, and other economic powerhouses clamp down on crime and publish frameworks for those who want to use blockchain technology, it’s more important than ever to understand blockchain governance’s who, what, where, when, and why.
Some recent regulations related to blockchain technology:
- European Union – The European Union is leading the pack. In just the last two years, it has passed the Markets in Crypto-Assets (MiCA) regulations to create a harmonized regulatory regime across the EU. The MiCA rules aim to foster innovation while protecting investors and preserving financial stability. They place transparency requirements on issuers, define who will regulate and supervise the industry, and take measures to ensure the stability and integrity of the market.
- United Kingdom – In June 2023, the U.K. passed the Financial Services and Markets Act (FSMA). This act defined trading digital currencies and assets as a regulated financial activity, allowing the Financial Conduct Authority (FCA) to supervise digital currency and stablecoin activity more effectively. In October 2023, the U.K. government published more rules for fiat-backed stablecoins and paved the way for more regulations related to algorithmic stablecoins, lending, and trading.
- United States – The situation in the U.S. can best be described as ‘moving toward regulation.’ As usual in U.S. politics, there’s much disagreement and drama surrounding blockchain and digital currencies, and various pieces of legislation have been proposed or are in different stages of progress. In 2023, the House Financial Services Committee (FSC) published a draft of a stablecoin bill proposing a study on central bank digital currencies (CBDCs) and a moratorium on stablecoins backed by currencies other than the USD. We’ve seen clampdowns on exchanges for violating the Bank Secrecy Act and Anti-Money Laundering Act (AMLA), with regulators like the Securities and Exchange Commission (SEC), Financial Crimes Enforcement Network (FinCEN), and the Commodity Futures Trading Commission (CFTC) playing enforcement roles.
- China – The People’s Republic of China has strictly prohibited digital currencies since 2017. Since its initial ban on initial coin offerings (ICOs) and heavy restrictions on trading digital currencies, it has reinforced its position several times. In 2021, it declared all forms of cryptocurrency transactions illegal, including issuing, trading, and providing related financial services. However, there are signs of change; in 2023, the People’s Bank of China (PBoC) called for cooperating in regulating digital currencies and decentralized finance (DeFi), dedicating a section to these topics in its annual financial stability report.
Learn more at the London Blockchain Conference 2024
At this year’s London Blockchain Conference, industry experts will explore the ever-evolving regulatory landscape and how to stay compliant with it. Sessions will include:
- Navigating the Blockchain Regulatory Landscape
- The “Future of Money” – CBDCs and Stablecoins
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