When it comes to cryptocurrency\/blockchain regulation, considerable attention has been focused, this past year, on the United States’ action (or inaction). But the U.S. is not the world, just one important player, and crypto, from its beginnings, has been a global enterprise.\u00a0<\/p>\n
Perhaps, then, it makes sense to step back and ask: What is going on with crypto regulation when viewed through a global <\/em>lens?<\/p>\n For instance, how do geographic regions such as Europe, Asia and North America compare in terms of crypto legislation, rules and enforcement? Is there any single country or jurisdiction that could serve as an exemplar for regulation? How is the developing world dealing with all this variation? And finally, are there reasons to be hopeful about the way regulatory trends are now unfolding?<\/p>\n If one focuses solely on the negative \u2014 the tide of crypto-related collapses, bankruptcies and enforcement actions in the United States this past year \u2014 a skewed picture can emerge. Progress in places like Europe might be overlooked, like the European Union\u2019s recent adoption of its Markets in Crypto-Assets (MiCA) regulatory framework. <\/p>\n \u201cThrough MiCA, the European Union has been a global model by offering the much needed regulatory clarity that crypto businesses of varying sizes and business models would need,\u201d Caroline Malcolm, vice president of global Policy at Chainalysis, told Cointelegraph, adding:<\/p>\n \u201cRegulatory clarity and consistent implementation of rules will allow businesses to devise their operational program.\u201d\u00a0<\/p><\/blockquote>\n Nor is Europe necessarily alone in pursuing a forward-looking path. \u201cThere is massive momentum on achieving regulatory clarity for digital assets across the world, whether that be in the U.S., Singapore, the UAE or others,\u201d Malcolm said.<\/p>\n Despite some promising trends, global crypto regulation \u2014 laws, rules, enforcement, taxation, etc. \u2014 remains a mixed bag.\u00a0<\/p>\n \u201cThere’s a lot of fragmentation when it comes to regulation depending on the jurisdictions and geographical areas,\u201d Bertrand Perez, CEO of the Web3 Foundation, told Cointelegraph in an interview earlier this week. <\/p>\n \u201cIn the U.S. we know, we know what’s happening or what is not happening over there,\u201d continued Perez, who earlier served as chief operations officer at the Diem Association (formerly Libra, Facebook\u2019s high-profile but ultimately failed stablecoin experiment). <\/p>\n Magazine:\u00a0Deposit risk: What do crypto exchanges really do with your money?<\/a><\/em><\/strong><\/p>\n Europe\u2019s MiCA regulations, by comparison, focus on stablecoins. Indeed, MiCA is the EU\u2019s \u201canswer to the Libra project,\u201d Perez said.<\/p>\n Significantly, the Europeans recognize that one can\u2019t have a single regulatory framework for everything crypto, he added. MiCA is step one, \u201cbut then they’ve been slicing the use cases.\u201d There will eventually be another regulatory framework for nonfungible tokens and another for metaverse-related use cases.<\/p>\n The EU doesn\u2019t hold a monopoly on progressive thinking either. Switzerland, which is not an EU member, was the first country to develop a clear crypto framework back in 2018. <\/p>\n The Swiss regulatory scheme<\/a> separates tokens into three categories: security (a.k.a. \u201casset\u201d) tokens, utility tokens and payment tokens, and also provides a number of licensing schemes dependent on the project’s structure. <\/p>\n In the U.S., by comparison, the Securities and Exchange Commission appears to have categorized all digital tokens \u2014 with the possible exception of Bitcoin \u2014 as security tokens. But in Switzerland, according to Perez:<\/p>\n \u201cIf you are a utility token and or if you’re a security token, the rules of the road are completely different from the regulation perspective.\u201d\u00a0<\/p><\/blockquote>\n The legal certainty that Switzerland has offered for several years now is the reason that so many crypto-related foundations and companies are based there and the reason so much Web3 innovation comes out of that country, he said. The Web3 Foundation, creator of the Polkadot protocol, is based in Zug, Switzerland.\u00a0<\/p>\n Historically, Singapore followed Switzerland\u2019s lead, and for a while, those two venues stood alone in terms of crypto rule-making clarity. \u201cIn 2019, when we announced Libra, there were those two choices, either Switzerland or Singapore, in terms of regulation,\u201d Perez recalled. \u201cThe two countries were clearly leading the pack and having clear frameworks that were well defined.\u201d<\/p>\n Today, there are more approaches. \u201cIn Asia as a geographical area, every country is having a different approach\u201d to regulation, Perez continued.\u00a0<\/p>\n However, Japan is one jurisdiction that is attracting more attention than the others. Japan was formerly the home of Mt. Gox, which was the subject of crypto\u2019s first mega scandal. When that cryptocurrency exchange collapsed<\/a> in 2014, it arguably made Japan crypto-wary. But if so, the island nation seems to be emerging from its isolation now \u2014 at least based on discussions Perez and others have held there recently. <\/p>\n \u201cJapan is still a land of many innovations,\u201d he reported. Indeed, at the WebX conference held in Tokyo in late July, Japanese Prime Minister Fumio Kishida announced<\/a>, \u201cWeb3 is part of the new form of capitalism,\u201d adding that it would be a vital element of Japan’s economic strategy, centered on growth, innovation, wealth distribution, digital transformation and the support of startups.<\/p>\n \u201cThe Prime Minister announced that basically he is welcoming Web3 to Japan, where a year ago or even a few months ago it wasn\u2019t clear if they were supportive or not,\u201d Perez told Cointelegraph. \u201cNow it’s clear and the rules are going to be as business friendly as possible.\u201d <\/p>\n Japan wanted to develop and implement clear and well-defined rules of the road for cryptocurrencies before it opened its gates again after Mt. Gox, Perez suggested, and they have those now. As he further noted:<\/p>\n \u201cJapan\u2019s crypto exchanges are the safest in the world now because the regulation is very strong. And now they are broadening their reach and welcoming broader [crypto] use cases.\u201d<\/p><\/blockquote>\n Elsewhere, China has been in the process of launching its digital yuan, becoming \u201cthe first country to have a central bank digital currency at scale,\u201d according to Perez. Meanwhile, Dubai, the most populous city in the United Arab Emirates, is now \u201creally pushing hard\u201d in the crypto sphere \u201cto attract not only capital but also skills from all around the world,\u201d said Perez.<\/p>\n Asked to rank the largest Western countries in terms of regulatory crypto foresightedness, Perez put the European countries ahead of Japan, with the U.S. bringing up the rear. Within the EU, he would place his native France at the forefront, given that it is \u201cthe first European country to clearly implement the MiCA framework ahead of the law being enforced in the European Union.\u201d <\/p>\n France has also done a good job at defining the rules of the road \u201cin a way that is usable from a business perspective.\u201d The U.K., no longer in the EU, is also \u201cbeginning to shift and see the value\u201d in crypto and blockchain technology, he added. <\/p>\n Perez even detects \u201ca different tone\u201d among U.S. regulators and legislators; they now seem less likely to view the cryptoverse as a place inhabited chiefly by drug dealers and money launderers. He also observed that cryptocurrency reform is being spearheaded by legislators \u201con both sides of the aisles\u201d within the most recent U.S. Congress. <\/p>\n What about low- and moderate-income countries \u2014 where do they stand with regard to crypto regulation? <\/p>\n \u201cMost of those countries are basically waiting for the big players like the U.S., the European Union and Japan,\u201d Perez said. They will watch to see which frameworks work best and can be adapted to their particular circumstances. <\/p>\n Which regulatory elements would he especially like to see duplicated globally? \u201cIf I had to recommend one framework, I would choose a combination of the Swiss token framework and parts of the EU\u2019s stablecoin framework,\u201d Perez answered.<\/p>\n Recent:\u00a0SEC delays set deadlines for Bitcoin ETF approval to early 2024<\/a><\/em><\/strong><\/p>\nA fragmented world<\/h2>\n
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<\/figure>\nThe evolving case of Japan<\/h2>\n
The most progressive G7 nation?<\/h2>\n