Five examples of governments embracing digital assets

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2022 hasn’t been the best year in terms of crypto’s reputation among regulators and policymakers. However, even amid the market crash and repetitive public attacks on the industry, some officials have found the courage to embrace the innovation. Some names aren’t new, while others have shown significant enough progress to be included in this list. The United Arab Emirates and El Salvador have continued to push their crypto agenda forward and the UK has been pushing hard to lay the regulatory groundwork, while Brazil and the Central African Republic have legally recognized cryptocurrencies.

Brazil

2021 may have been a year of mass adoption in Brazil, but it was 2022 that the country finally got its own regulatory framework. Before leaving his office, Jair Bolsonaro, the former president of Brazil, signed a bill legalizing the use of crypto as a means of payment in the country. The bill does not make cryptocurrencies legal tender, as in El Salvador, but it still introduces the legal definition of digital currencies and establishes a licensing regime for virtual asset service providers.

The bill arrived on time. The number of companies holding cryptocurrencies in Brazil has reached new highs, the country’s tax authority recorded 12,053 unique organizations declaring cryptocurrencies on their balance sheets in August 2022.

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In May, the Brazilian Stock Exchange confirmed its intention to launch the first official product for the Bitcoin (BTC) cryptocurrency futures market. Unlike in the United States, institutional and retail investors currently trade 11 exchange-traded funds (ETFs) with exposure to cryptocurrencies on the Brazilian exchange.

The United Kingdom

Britain has certainly not had an easy year. In 2022, Queen Elizabeth II passed away after serving the nation for 70 years. Two Prime Ministers Boris Johnson and Liz Truss have resigned. But when it comes to crypto, the rambunctious government has never stopped working on regulation. And while the fruits of that labor could be more impressive, the UK still argues for a national regulatory framework.

The Financial Services and Markets Bill, introduced in July, reaffirmed the UK’s intention to become a global center for cryptocurrency. It expanded stablecoin regulation and coined a new term Digital Settlement Assets (DSA). The bill will authorize the Treasury to regulate DSAs, including payments, service providers and insolvency agreements. The Economic Crime and Corporate Transparency Bill, introduced in May, proposed creating powers to more quickly and easily seize and recover crypto assets to mitigate risk to those targeted by ransomware attacks.

Related: The Indonesian Crypto Industry in 2021: A Kaleidoscope

This year, the UK Web3 community celebrated an important legal precedent. The High Court of Justice in London, the closest analog to the US Supreme Court, has ruled that non-fungible tokens (NFTs) represent private property.

At a time when everyone is interested in non-hosted wallets, the Treasury has reduced its requirements for collecting data from senders and receivers of crypto sent to non-hosted wallets, unless the transaction has a high risk of illicit financing. And, at the end of the year, he gave a big gift to all investors by qualifying the trades as designated crypto assets for investment manager exemption.

The Savior

The nation of El Salvador, whose main breakthrough came in 2021, deserves to be included in this list, at least for its persistence. Once the Bitcoin bond issuance plan was revealed, Nayib Bukele’s government has been trying to execute it ever since. The first delay occurred in March, then repeated in September. In November, Economy Minister Maria Luisa Hayem Brev introduced a bill confirming the government’s plan to raise $1 billion and invest it in building a Bitcoin City. However, there has been no news of the bill’s success since.

Yet the country remains a crucial laboratory for Bitcoin adoption. According to Salvadoran Tourism Minister Morena Valdez, the tourism industry in El Salvador has jumped more than 30% since the Bitcoin Law was passed in September 2021. In early 2022, a study by the National Bureau of Economic Research (NBER ) showed that 20% of businesses have started accepting BTC as a form of payment.

In May, El Salvador hosted 44 central bankers from developing countries around the world to tackle financial inclusion and discuss Bitcoin during a three-day conference. The event was visited by central bank delegates from Ghana to Burundi, Jordan to the Maldives and Pakistan to Costa Rica.

The Central African Republic

In April, the Central African Republic (CAR), with a population of 5 million, became the first nation on the continent to legalize the use of cryptocurrencies in financial markets. The Cryptocurrency Bill, Unanimously Approved by Lawmakers, Enabled Merchants and Businesses to Make Crypto Payments and Also Make Room for Paying Taxes in Crypto Through Entities allowed. In July, the local central bank (CBDC) digital currency, Sango Coin, was launched to raise nearly $1 billion over the next year. So far, however, only $1.66 million of the piece has sold.

The country had also announced a plan to allow foreign investors to purchase citizenship for $60,000 in Sango Coins. However, this initiative was blocked as unconstitutional by CAR’s highest court.

Mamadou Moustapha Ly explains Sango Coin to Cointelegraph’s Joseph Hall

The adoption was pushed back by the Bank of Central African States (BEAC), which warned of the substantial negative impact the legislation will have on the Central African monetary union.

United Arab Emirates

The UAE has taken a strategic approach to crypto and has acted steadily to create a regulatory environment and attract global investors. Perhaps that is why the country made the Cointelegraph list for the second time in a row.

In March, Dubai established a legal framework for crypto aimed at protecting investors and crafting well-justified international standards for industry governance. A new Dubai Virtual Assets Regulatory Authority (VARA) has been granted enforcement powers in the Emirates Free and Special Development Zones, excluding the Dubai International Financial Centre. The now bankrupt crypto exchange FTX was among the first to obtain the same license.

Another emirate, Abu Dhabi, has offered draft recommendations for NFT trading. They characterized NFTs as intellectual property rather than specific investments or financial instruments and enabled multilateral trading facilities (MTFs) and virtual asset custodians (VACs) to mine NFT markets.

In July, Dubai launched the Dubai Metaverse strategy, which aimed to make the emirate one of the top 10 metaverse economies in the world. It includes research and development (R&D) collaborations to enhance metaverse economic contributions, using accelerators and incubators to attract companies and projects from overseas, and providing metaverse education support for developers, content creators and users.

The country even opened its first city in Metaverse. Dubbed the Sharjahverse, it has been described as a photorealistic and physically accurate metaverse that encompasses the emirates’ area of ​​1,000 square miles. The virtual city will support the local tourism industry and potentially create new jobs in the metaverse.

All in all, 2022 hasn’t been all that bad in terms of friendly regulations. And next year is going to be even more interesting, with the race for the first full crypto framework in the US and potential liberalization in Hong Kong and South Korea.

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