How digital asset laws have changed in 2022

[ad_1]

Effective regulations are one of the main gateways to the widespread adoption of cryptocurrencies. Due to greater compliance, crypto businesses have been more widely accepted by regulators around the world. While the crypto ecosystem has gained countless operational licenses and exposure to new markets, the fall of Terraform Labs, FTX, and Celsius, among others, has had a negative impact on the industry’s reputation with investors and regulators.

As we look back on 2022 and all that it has brought to the cryptocurrency industry, we highlight how the regulatory landscape has changed for cryptocurrencies and the blockchain industry as a whole.

North America

China’s blanket ban on crypto mining and trading from the end of 2021 has positioned the US as the torchbearer of crypto disruption by default. The United States is not only home to the largest network of crypto ATMs, but is also the largest contributor to the Bitcoin (BTC) hash rate.

Among all crypto sub-ecosystems, non-fungible tokens (NFTs) have taken center stage in US politics. In what can be seen as a clear win for crypto, the Federal Election Commission (FEC) has authorized the use of NFTs for political campaign fundraising inducements.

For many regulators, the collapse of FTX and the arrest of former CEO Sam Bankman-Fried was seen as a representation of the misdeeds of the entire crypto community. As a result, this has helped fuel anti-crypto sentiment among many US politicians, such as Representative Brad Sherman. However, Rep. Tom Emmer sided with the crypto community in pointing out the community’s contribution to tracking Bankman-Frieds’ illegal activities.

Representative Brad Sherman at the FTX hearing before the US House Committee on Financial Services. Source: YouTube

Citing the collapse of FTX, the Canadian Securities Administrators, an umbrella group of securities regulators across Canada, banned crypto leverage and margin trading to protect investors. Additionally, Canadian energy supplier Hydro-Quebec has rolled out plans to reallocate energy supplied to crypto-mining ventures, citing high energy demands expected during the harsh Canadian winter.

Similarly, US regulators introduced the Crypto-Asset Environmental Transparency Act to order the Environmental Protection Agency to report on the energy consumption and environmental impact of crypto miners.

Central and South America

Further south, El Salvador still maintains its position as the most important contributor to the integration of Bitcoin in the world. While many pointed to the unrealized losses from falling Bitcoin prices that the country is facing, President Nayib Bukele announced a new BTC investment strategy in which the country would buy 1 BTC per day from November 17. 2022.

We’re buying one #Bitcoin every day starting tomorrow.

— Nayib Bukele (@nayibbukele) November 17, 2022

Additionally, 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.

Despite a slow start, Brazil has seen the establishment of pro-crypto regulations. Late last year, before former President Jair Bolsonaro left office, a bill to legalize the use of crypto as a form of payment in Brazil was signed into law. Brazil recently issued a payment institution license to Crypto.com, allowing the crypto exchange to continue offering regulated fiat wallet services to Brazilians.

Asia

After careful consideration, many Asian regulators have softened their anti-crypto stance and opted to allow crypto firms to manage their operations. While China has loosened its grip on its crypto permaban, India has implemented a new tax regime for crypto.

In the case of China, the People’s High Court in Shanghai issued a ruling stating that Bitcoin is subject to property rights laws and regulations. With the court acknowledging the asset’s value, scarcity, and availability, bitcoin owners were given the right to compensation in a case involving an unpaid loan.

Click Collect under the illustration at the top of the page or follow this link.

India imposed two new crypto tax policies earlier this year, one imposing a 30% tax on crypto profits and the other imposing a 1% withholding tax deduction on each crypto transaction. The laws had a negative impact on local trading volumes as investors continued to hold their assets in hopes of better regulation. India, during its presidency of the G20, which will last until November 30, 2023, intends to continue the development of standard operating procedures for cryptocurrencies.

The central bank of Pakistan, on the other hand, has signed new laws to accelerate the launch of a central bank internal digital currency (CBDC) amid hyper inflation.

As in the United States, the fall of Terraform Labs left a bad taste in the mouths of South Korean regulators. For the island nation, the majority of 2022 has been spent tracking down the bad actors responsible for investor losses. Additionally, the implementation of the Know Your Customer requirements in 2021 in the country resulted in a drastic reduction in hacking activities throughout 2022.

Europe and Middle East

The Russian-Ukrainian war indirectly highlighted the prowess of cryptocurrencies in serving the unbanked. As millions of people lost access to their savings, cryptocurrencies came to the fore as saviors.

Displaced citizens got help through crypto donations, while Russians fleeing the country used it to circumvent newly introduced currency controls in their home countries. Just two weeks into the war, crowdfunding has raised over $108 million for Ukrainian war aid. Another organization raised $54 million in crypto funds to purchase vests, goggles, and unmanned aerial vehicles for Ukrainian fighters.

With $54 million raised by @_AidForUkraine, we have provided our defenders with military equipment, armored clothing, medicine and even vehicles. Thanks to the crypto community for their support since the large-scale invasion began! Donation by donation to the great victory. Report below. pic.twitter.com/lifHAP8R4f

— Mykhailo Fedorov (@FedorovMykhailo) August 17, 2022

The Committee of Permanent Representatives of the European Union has approved the Framework for Crypto-Asset Markets, which aims to create a consistent regulatory framework for cryptocurrencies between member states of the European Union.

The International Monetary Fund, a major financial agency of the United Nations, has called for increased regulation of crypto markets in Africa. The Central African Republic has reportedly passed a bill to legalize the use of cryptocurrencies in financial markets.

The UK has called for regulatory changes to bring the crypto industry under tighter control. In reaction to the collapse of FTX, the UK Treasury issued guidelines for the Financial Conduct Authority to monitor the operations and advertising of crypto companies in the country. This has further influenced upcoming legislation in 2023 to prevent crypto services from overseas from operating in the UK.

South Africa’s financial regulator, the Financial Sector Conduct Authority, has updated the country’s Financial Advisory Services and Financial Intermediaries Act 2002 to declare crypto as a financial product subject to the Financial Services Act.

This is a historic moment for South Africa:

Today, the Financial Sector Conduct Authority (FSCA) declared a crypto asset as a financial product under the FAIS Act.

This statement has been published in the Official Gazette as well as on the FSCA website.

— Farzam Ehsani (@farzamehsani) October 19, 2022

Nigeria has banned cash withdrawals from ATMs of more than $225 (100,000 naira) per week to enforce the use of its CBDC, eNaira. African crypto exchange Yellow Card has received regulatory approval to expand its services across the African continent.

While the Dubai Virtual Assets Regulatory Authority issued numerous operational approvals to crypto businesses in 2022, it had to revoke FTX MENA’s minimum viable product license.

More recently, Australia overtook El Salvador to become the fourth largest crypto ATM hub after the United States, Canada, and Spain. Australian financial regulators are continuing their efforts from 2022 to create a regulatory framework for stablecoins.

Africa and Oceania

While the aforementioned triumphs only highlight the cream of regulatory achievement, the crypto ecosystem has made significant progress throughout the year. Knowing that regulations are key drivers of mass adoption, crypto businesses with strong compliance initiatives are setting the stage for mainstream adoption as 2023 approaches.

Discover Cointelegraphs crypto summary of 2022 and what it means for the community in 2023.

[ad_2]