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As the globalization of economies, work, and technology continues to expand, some policymakers are beginning to introduce crypto-positive regulation as an opportunity to welcome or even encourage innovation.
With other jurisdictions such as the UK and China taking a tougher stance on crypto regulation, this is creating a diaspora of companies looking to locate their operations in countries with friendly regulatory fences.
To be perfectly clear, friendly regulation does not necessarily mean lax compliance or ill-defined rules. Sometimes it can be as simple as clear and constructive parameters within which crypto businesses can operate. Inconsistent or unclear regulation can be detrimental to businesses, especially those unwilling to break the rules.
This creates a natural attraction for companies to move to jurisdictions that offer firm but clear regulations to which they must adhere. In this direction, the Central Bank of Cuba (BCC) will start offering licenses to Virtual Asset Service Providers (VASP).
BCC will begin offering its VASP licenses to both individuals and legal entities based in Cuba or even abroad. Licenses will be valid for one year, with the option to extend after that initial time period. A BCC spokesperson clarified that their definition of virtual assets will not include other “digital representations of fiat currency, securities and other financial assets widely used in traditional banking and financial systems, which are regulated by other provisions of the Central Bank of Cuba.” .
It is worth noting that this regulation does not specifically address how the Cuban government will collect taxes from its VASP-licensed entities.
New York brings proof of work ban
Last week, the New York State Assembly passed the “Cryptocurrency Mining Moratorium Act”. This places a two-year ban on proof-of-work (PoW) cryptoasset mining facilities in the country that use carbon to power their operations. PoW has received increasing criticism for its energy-consuming nature in contrast to other methods such as proof-of-stake (PoS) mining.
The mining moratorium bill received 95 votes in favor and 52 votes against. The bill will now be voted on in the state Senate before being sent to the governor. The bill tasks the Department of Environmental Conservation (DEC) with “preparing a ‘generic environmental impact statement’ to quantify, locate and assess miners’ energy consumption and greenhouse gas emissions and their impact on public health.”
As vocal industry advocates, including those at the Blockchain Association, gather momentum against a moratorium on PoW mining, concerns about the overall environmental impact of crypto-asset activity continue to grow.
The Wikimedia Foundation stops accepting crypto donations
After eight years, the Wikimedia Foundation – which owns and operates Wikipedia – will stop accepting cryptocurrency donations. It said the move follows “a three-month discussion period following a request by the Wiki community to stop accepting cryptocurrencies.”
An update released by the Wikimedia Foundation reads: “[We have] decided to stop directly accepting cryptocurrency as a means of donation. We started our direct cryptocurrency acceptance in 2014 based on requests from our volunteer and donor communities. We’re making this decision based on recent feedback from those same communities. Specifically, we will be closing our Bitpay account, which will end our ability to directly accept cryptocurrency as a donation method.” The Wiki page titled “Comment Requests/Stop Accepting Cryptocurrency Donations” lists several reasons, but the most prominent ones are related to environmental issues.
Although cryptoassets ended up being a small percentage of Wikipedia’s total donations received, the crypto community should take the reasoning behind this decision seriously. The impact of cryptocurrencies on the environment will continue to be examined. Innovation that does not address these challenges will not serve the broader crypto community in the long term.
OCC issues statement on stablecoins
Acting Comptroller of the Currency Michael J. Hsu spoke about stablecoins last week at the symposium “Artificial Intelligence and the Economy: Charting a Path for Responsible and Inclusive Artificial Intelligence.”
Hsu stated that: “Stablecoins lack common standards and are not interoperable. To ensure that stablecoins are open and inclusive, I believe a standard setting initiative similar to that undertaken by the IETF and W3C needs to be established, with representatives from not only crypto/Web3 firms, but also including academics and government. My conversation with Deputy Secretary Graves today underscored that need and reflected the willingness of government agencies like NIST and the OCC to engage in such efforts.”
Hsu’s comments reflect a growing desire for more public-private partnerships in the cryptoasset space, as well as coordination of standards with America’s international allies.
Gibraltar introduces market abuse rules
Gibraltar has introduced a new regulatory framework to protect against market manipulation and abuse in the virtual currency and distributed ledger technology (DLT) markets.
According to the reports: “DLT providers will monitor the movement of significant virtual asset holdings and the release of information that could be intended to generate false or misleading market signals and investigate whether algorithm-based systems are used to generate misleading data about transaction volumes.”
In addition, stakeholders must prevent any insider trading and notify the public of all relevant information as soon as possible.
Stablecoins EMEA compliance
