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How does crypto regulation work around the world? It appears to be different in every country, and the goal is to try and find the best approaches and take the best points from each to form a solid roadmap for traders everywhere.
Crypto Regulation Differs Depending on the Country
There has been a huge call for crypto regulation since the collapse of FTX last November. In the U.S., agencies like the Federal Reserve and the Office of the Comptrollers of the Currency (OCC) released a joint statement explaining that crypto trading is extremely risky, and thus taking part in the arena goes against “sound banking practices.” The statement reads:
Issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public and/or decentralized network or similar, is highly likely to be inconsistent with safe and sound banking practices.
Christopher Mitchell – founder and principal of Keala Advisors – says the U.S. has it all wrong when it comes to crypto regulation. He commented that the big problem is that while crypto is part of a whole new technology trend, officials want to regulate it like it’s part of the standard financial industry. He said:
The government wants to treat cryptocurrencies as traditional securities while also working to restrict their ability to be treated and function within financial markets like traditional securities.
UK prime minister Rishi Sunak, by contrast, wants his country to become a huge crypto haven in the coming years. He recently stated that he’d like to regulate stable coins so they can become valid methods of payment in the future:
It’s my ambition to make the U.K. a global hub for crypto asset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate, and scale up in this country.
Discussing crypto regulation in Brazil, Bruno Sousa – head of U.S. and new markets at Hashdex – said:
Brazil has been a frontrunner in crypto policy. The Real Digital project, led by the Brazilian Central Bank, is a very interesting project in terms of regulation because it is flexible in terms of adopting the new technology but maintaining current regulation for deposits… and making the large banks the ones who issue the stablecoins instead of bypassing the banks.
We Don’t Want People Like Do Kwon in the Mix
He also stated that in general terms, crypto regulation is far more needed today, and he used the current situation surrounding Do Kwon and his recent arrest as the reason why. He says that men like Kwon are running rampant throughout the space, and regulation will have a hand in stopping this:
Strong regulations are not only important, but necessary to foster the industry’s growth. From the investor’s standpoint, having access to this new asset class through regulated entities and investment funds helps mitigate the risks.
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