red 
The Financial Stability Board (FSB) has published its regulatory framework for crypto-asset activities to promote global harmonization of regulatory and supervisory approaches. It includes lessons from events over the past year that have highlighted the structural weaknesses of cryptoassets and related players, as well as feedback received during the FSB’s public consultation.
The framework consists of two groups of recommendations for the regulation, supervision and monitoring of the activities and markets of cryptoassets, namely “global stablecoin” arrangements. It relies on the experience of implementing jurisdictions and builds on the principles of “same activity, same risk, same regulation”, and that it is high-level, flexible and technologically neutral.
Specifically, in light of last year’s events, the FSB has strengthened both sets of recommendations in three areas, namely:
-
adequate protection of clients’ assets;
-
addressing risks associated with conflicts of interest; and
-
cross-border cooperation.
The recommendations focus on addressing financial stability risks and do not cover all risks associated with cryptoassets. Central bank digital currencies (CBDCs) are also not subject to recommendations.
Kuwait prohibits the use of crypto-assets for payments and investments
On July 18, the Capital Markets Authority (CMA) of Kuwait issued a circular prohibiting the use of crypto-assets for payments or investments. It also banned all crypto-asset mining and the recognition of crypto-assets as the country’s currency, and warned the public that companies are prohibited from providing any services related to the crypto-asset – the only exception being securities “regulated by the Central Bank of Kuwait and other securities and financial instruments regulated by Capital Market Administration”.
According to the regulator, the bans will help the country comply with Financial Action Task Force (FATF) recommendations on cryptoassets – although FATF has not asked jurisdictions to ban cryptoassets – and follows a study by the National Anti-Money Laundering and Terrorism Financing Committee.
In addition to the bans, the CMA also warned the public to be cautious and aware of the risks associated with crypto-assets, including the fact that they are not “linked to any asset or issuer, and the prices of these assets are always driven by speculation, which exposes them to sudden falls.”
The regulator in the United States accepts spot Bitcoin ETF applications
The United States Securities and Exchange Commission (SEC) has accepted BlackRock’s filing for a spot Bitcoin exchange-traded fund (ETF), beginning the formal review process for BlackRock’s ETF proposal. While an initial step in a likely long regulatory journey, it signals the SEC’s openness to exploring spot Bitcoin ETFs and assessing their potential market effects.
Based on July 19 data, the Federal Register listed spot Bitcoin ETF applications for BlackRock, Fidelity, Invesco Galaxy, VanEck and WisdomTree. The listings — which were expected after the companies filed their initial filings in June — give the SEC 240 days to approve or reject proposed rule changes that would pave the way for the listing of spot Bitcoin ETFs.
Britain will not regulate cryptocurrencies like gambling
The UK government rejected a suggestion from a May report issued by the Parliamentary Treasury Select Committee that Bitcoin, Ether and other unbacked crypto-assets should be regulated as gambling given the significant risks they pose to consumers – who might think the crypto sector safer than it is if it is treated as a financial service.
In its July 20 response, the finance ministry “strongly disagrees” with the board’s recommendation in the report and said treating the crypto-asset as a form of gambling would put the country at odds with global and European Union regulators. Moreover, a system of gambling regulation would probably not mitigate sector risks such as those highlighted by the collapse of FTX.
The government added that it is already working to regulate the crypto-asset market, and a proposed regulatory law was tabled in parliament and debated last month.
Strong momentum visible in the growth of China’s digital yuan
China’s central bank governor revealed on July 19 at a lecture organized by the Monetary of Singapore (MAS) that Chinese digital yuan (e-CNY) in circulation reached 16.5 billion yuan as of the end of June, and transactions reached 1.8 trillion yuan – a significant jump from over 100 billion last August. He added that the total e-CNY transaction reached 950 million, with 120 million wallets open.
Despite these numbers – which cement China’s leading role among countries developing their own CBDCs – adoption is still in its early stages and e-CNY in circulation only accounts for 0.16% of China’s cash in circulation.
The governor also said that so far the digital yuan has mainly been used for domestic retail payments. However, he said that “the balance is very small, but with this kind of balance [we] they support a large number of transactions, which means that the speed is high and more efficient”.
Regulation Global regulators and government
