red 
Like us recently noticed, 2024 is already shaping up to be a year of exciting and intense activity on the crypto regulatory and policy front.
From the effort to strengthen the supervision of stablecoin arrangementsonward examining the DeFi spacein terms of the possibility of greater synergy between the fields of crypto and AI, 2024 promises to be an exciting year for observers of crypto regulatory developments.
Of course, all of these efforts will be driven by policy-making and regulatory bodies around the world, which will create new rules and requirements that carry significant ramifications for the crypto space.
In this installment of our Regulatory Outlook 2024 series, we look at how regulatory developments in key jurisdictions around the world will shape up this year and what the implications will be.
A tale of three cities
Amid a sea of ​​regulatory upheaval, 2023 saw three cities emerge as promising hubs for crypto firms seeking clarity on the rules of the road.
Paris, for its part, has become a sought-after destination for crypto firms looking to operate under the EU’s Markets in Cryptoassets (MiCA) regulation – the EU’s robust and comprehensive framework that covers activities such as issuing stablecoins and seeks to improve protection consumers and the market. standards of integrity among cryptocurrencies are expanding. The French government has promoted a vision for the country to become a base for crypto asset service providers (CASPs) seeking to take advantage of MiCA’s passporting provisions.
The Autorite des Marches Financiers (AMF) manages registration box for companies wishing to offer trading, custody and other services in France, and has already registered more than 100 CASPs. These firms will need to implement a number of compliance improvements to gain further approval under MiCA’s provisions for CASP, with a transition period lasting until 2026. The prospect that France could serve as a hub for crypto innovation under MiCA is building confidence among not only crypto-domestic firms but also those in the existing financial sector. Societe Generale, for example, has launched stablecoin with the approval of the AMF as part of its own innovation initiative.
In the Middle East, Dubai has emerged as a sought-after destination for a number of cryptocurrency firms and more traditional financial services firms get involved in crypto. Hosting the first crypto-specific supervisor, the Virtual Asset Regulatory Authority (VARA), Dubai has developed robust regulatory framework which provides confidence to companies looking to invest in the dynamic and growing markets of the Middle East and North Africa region. In addition to neighboring Abu Dhabi, which had a established long-standing crypto regulatory frameworkand Ras Al KhaimahDubai’s emergence as a potential crypto hub reinforces the UAE’s reputation as a home for innovation in the financial sector.
More broadly, the UAE’s evolving regulatory landscape for cryptocurrencies is set within a broader policy strategy designed to drive the country’s digital transformation. This included a test in February 2024 cross-border transfer of UAE Central Bank digital currency (CBDC). As in the case of France, the UAE’s commitment to fostering sustainable innovation in the space attracts not only cryptocurrencies, but also financial institutions: last year, Standard Chartered Bank announced plans launch digital asset custody services in the UAE.
In the APAC region, Hong Kong has established itself as the leader of the pack by starting robust regulation that can promote responsible innovation. In particular, by paving the way for highly regulated retail cryptocurrency trading services to operate in Hong Kong, regulators and policymakers there have given the industry increased confidence that they can make Hong Kong their regional home. The Hong Kong Monetary Authority (HKMA) is consulting on plans to introduce a comprehensive framework for stable coin issuers through legal changes that will be implemented in 2024, while other regulators are taking steps to ensure that crypto platforms in Hong Kong are safe for consumers. The new framework has led to major crypto exchange players in the region such as e.g ByBit seek licenses in Hong Kong with the hope of using it as a regional base for further business growth.
In 2024, we expect these jurisdictions – France, the UAE and Hong Kong – to continue to solidify their status as the three leading centers for crypto innovation in their regions. This does not mean a regulatory free pass. Regulators in these jurisdictions will hold crypto market participants to a very high standard, and will deny licenses and approvals to those who cannot operate up to the high limit.
What these jurisdictions will offer is clarity on the rules of the road ahead and confidence that will encourage responsible and reliable cryptocurrency investment and innovation for years to come.
Numerous developments around the world
Of course, none of this means that other countries won’t continue to be incredibly important in the world of crypto regulation and policy development. Indeed, 2024 will see critical shifts in crypto regulation in many other parts of the world.
For example, while France has been quick out of the starting gate in building a reputation as a center for innovation within MiCA, other countries in the EU are also attracting cryptocurrency-related businesses and could give France the upper hand as Europe’s crypto base. A number of prominent US-based VASPs are registration in Ireland to take advantage of MiCA provisions on passporting, doc major financial institutions in Germany seek to exploit cryptocurrencies in various use cases under the supervision of the German regulator BaFin.
The UK is taking major steps to try to make its cryptocurrency regulatory regime more competitive vis-a-vis MiCA, with Prime Minister Rishi Sunak’s government looking for UK updates legal and regulatory framework for cryptocurrencies and stablecoins in an effort to promote the UK’s reputation as a hub for innovation in the financial sector post-Brexit. The key question for the UK, however, is whether the regulator’s approach will cold mood among the crypto industry and could discourage investment in the UK – a tension unlikely to be neatly resolved in 2024.
While the UAE is pushing itself as a leader for well-regulated crypto services in the MENA region, other countries are pushing. Turkey, e.g. took important steps to position itself as a regional rival to the UAE by pursuing new crypto regulatory measures. Further in Africa, important regulatory developments are underway in countries ranging from Nigeria that South Africa also – changes that some observers believe could lead to improved use of technology in the region ripe for fintech adoption.
If Hong Kong has generated significant interest recently, it will certainly not be the only source of crypto-related regulatory news in the APAC region in 2024. Although regulators in Singapore remain wary of retail crypto speculation, Singapore still offers an important base for institutional players looking to leverage the technology in a well-regulated environment, and the country’s regulatory framework for stablecoins offers a potentially compelling opportunity for firms looking to launch stablecoins from Singapore.
Reports suggest that mainland China will continue with the new anti-money laundering (AML) rules. for crypto in the middle of the proposal from the United Nations that money laundering related to cryptocurrencies is increasingly taking place through underground traders in China. South Korea is also taking important steps to improve its cryptocurrency regulatory framework in an effort to revitalize the country’s push to be a leader in the development and adoption of Web 3.0. There are also suggestions that India can finally move forward with regulatory plans for the crypto sector thereafter years of uncertainty.
All these developments that will take place during 2024 will offer the opportunity for new innovations in the crypto space to flourish in the context of well-defined regulatory frameworks.
To learn more about these evolving issues, be sure to check back Elliptic blog. And stay tuned for the next part of our series, where we’ll take a deep dive into the regulatory developments ahead in the United States.
Global regulation of cryptoregulation
