What to do with Bitcoin and Co.? Politicians around the world again gave very different answers to this question. Last week at the regulatory ECHO.
IMF: cryptocurrencies undermine financial stability
the International Monetary Fund (IWFF) has warned of the volatility of crypto assets. The organization views the fast-growing crypto market as a serious threat to global financial stability. In a blog post on Dec. 9, the IMF called for a “comprehensive, consistent, and coordinated” regulatory approach for Bitcoin and comparable digital assets. Therefore, the cross-border nature of cryptocurrencies poses significant challenges for national regulatory approaches.
Instead, international solutions are required. Specifically, the IMF requests a license for Bitcoin exchanges and other service providers in the sector. The cryptographic commitment of comparable banks and financial institutions must also be subject to a strict catalog of requirements. According to the IMF, there should also be regulatory requirements for digital assets and crypto services. Depending on whether a token appears more like an investment product or a means of payment, the government should treat it differently. The IMF wants to promote “useful crypto-asset products” in a “supportive environment.”
Russia at the crossroads of cryptocurrencies
Two reports from December 16 suggest that Russia is on the verge of making a fundamental decision on cryptocurrencies. Because on the one hand it reported Reutersthat the giant state central bank is targeting a blanket ban on cryptocurrency investments. Therefore, the institution sees the increasing volume of transactions as an increasing threat to financial stability. By contrast, Anatoly Aksakov, chairman of the state Duma’s financial market committee, painted a more nuanced picture on the same day. Because the Russian news agency Interfax reported that, according to Aksakov, two opposing regulatory approaches were being debated in government circles. In addition to a blanket ban, there would also be a proposal to legalize crypto exchanges under strict regulatory oversight. According to Aksakov, 2022 will be the year of the decision.
Myanmar’s democratic movement is based on Tether (USDT)
Since the February 1 coup, Myanmar has been known for its restrictive encryption policy. Under the supervision of the ruling military junta, the central bank of the Southeast Asian state banned all cryptocurrencies in May. While decentralized and difficult-to-control means of payment are a thorn in the side of the dictatorial army, the opposition movement is discovering the advantages of this asset class. Because the opposition Government of National Unity (NUG) announced on December 11 that it would recognize stablecoin tether (USDT) as an official currency in the future. The NUG is a kind of parallel government that emerged from the fusion of various democratic forces. He sees himself as the only legitimate representation of the people and is recognized in this role by the EU Parliament. The NUG intends to use Tether for discrete domestic transactions. The company behind Tether also recognized the NUG decision as a sign of confidence in the US dollar.
US senators continue to oppose controversial crypto paragraphs
When Joe Biden approved his monumental infrastructure package, alarm bells sounded in the US crypto lobby because the law establishes a transaction obligation for all crypto brokers beginning in 2024. Since the term broker is not really accurate, bitcoin miners and even blockchain developers could also be affected by the reporting requirement, purely hypothetically. That doesn’t seem particularly likely. However, there is no clarity on this point. Six senators from both parties wrote a joint letter to the US Treasury Department on December 14. In it, they ask the current finance minister, Janet Yellen, to specify the term broker as soon as possible. The authors continue to emphasize that this is to maintain US supremacy in the financial sector.
Tonga in the Bitcoin rush
Since El Salvador recognized Bitcoin as an official means of payment, the crypto community has started the big speculation: Which state will be the first to follow in the footsteps of the South American country? It looks like Tonga could win this race. A former deputy from the Pacific island state confirmed through a tweet that his country was working on the official recognition of BTC. It could be as early as October 2022. The reasons for introducing Bitcoin are likely to be similar to those in El Salvador. Both states depend on remittances from citizens working abroad. With Bitcoin, this cross-border payment transaction could become much easier and cheaper. If the former MP is to be believed, Tonga could soon turn to volcanic energy mining. With this, too, the island state can follow the example of El Salvador.
More on this in issue # 84 of the BTC-ECHO podcast.