Crypto regulation in the world: weekly digest #121
USA
Donald Trump has won the 2024 U.S. presidential election, marking a significant return to the White House as he becomes one of the few presidents to serve nonconsecutive terms. His victory is poised to significantly impact the cryptocurrency industry, as he has positioned himself as a pro-crypto candidate throughout his campaign.
Trump has promised to implement a «light touch» regulatory approach, which could alleviate some of the pressures that the cryptocurrency industry has faced under stringent regulations from the Securities and Exchange Commission during previous administrations. He has indicated intentions to replace SEC Chair Gary Gensler, who is viewed unfavorably by many in the crypto community for his aggressive enforcement actions against crypto exchanges and projects.
One of Trump's notable proposals is the establishment of a national strategic Bitcoin stockpile. This initiative aims to retain Bitcoin seized by the government rather than liquidating it, potentially positioning the U.S. as a leader in cryptocurrency holdings. Trump has also expressed a desire to promote Bitcoin mining within the U.S., suggesting that he wants to see all Bitcoin mined domestically.
Following Trump's election win, Bitcoin prices surged to record highs, surpassing $80,000. This increase reflects investor optimism regarding Trump's pro-crypto stance and anticipated regulatory changes that could foster a more favorable environment for digital assets. Other cryptocurrencies, including Ethereum also saw significant gains during this period.
With a more pro-crypto Congress expected due to Trump's influence, there is potential for rapid progress on legislation related to stablecoins and clearer definitions of crypto assets. We believe this legislative shift could lead to new investment vehicles like crypto ETFs, enhancing mainstream adoption of cryptocurrencies.
In summary, Trump's presidency is anticipated to usher in a more favorable regulatory environment for cryptocurrencies, potentially driving further adoption and innovation in the sector. However, market participants should remain vigilant about the risks associated with this volatile asset class as changes unfold.
Qatar
Qatar has introduced a comprehensive regulatory framework for digital assets, known as the QFC Digital Assets Framework 2024. This initiative marks a significant shift from the country's previous stance, which had prohibited cryptocurrencies since 2018. The new regulations aim to establish a legal and regulatory foundation for digital assets and tokenization processes within the Qatar Financial Centre (QFC).
The framework defines digital assets as a «digital representation of property rights», which can include both real and personal property. This encompasses various asset types, such as stocks, bonds, and real estate. The regulations facilitate the tokenization of assets, allowing property rights to be divided into smaller parts and represented digitally. This process is essential for enhancing liquidity and accessibility in financial markets.
Companies wishing to operate in the digital asset space must obtain licenses from the QFC Regulatory Authority (QFCRA). This includes compliance with strict operational and security standards for token creation, custody, transfer, and exchange.
The primary objective of the QFC Digital Assets Framework is to create a transparent and secure ecosystem for digital assets in Qatar. By aligning with international best practices, Qatar aims to attract both local and international businesses to its financial services sector. The framework is expected to foster innovation by providing a clear legal environment for fintech companies and startups engaged in digital asset development. With this move Qatar is going to rival with the UAE as a Middle East digital assets hub.
Pakistan
Pakistan is also on the verge of digital shifts in its financial policy. Historically, the country maintained a strict stance against cryptocurrencies, with the State Bank of Pakistan (SBP) categorizing them as illegal tender and issuing warnings about their risks. There is no changes in the Pakistan’s stance towards crypto, but the Pakistani government has proposed amendments to the State Bank of Pakistan Act, which would allow to issue and regulate central bank digital currency.
The amendments aim to empower the SBP to conduct operations related to a CBDC, potentially allowing it to function as legal tender within the country. This move is seen as a step towards integrating digital currencies into Pakistan's financial framework. From the other side, the proposed changes also include establishing penalties for unauthorized issuance of digital currencies, indicating that the legalization of cryptocurrencies is still not on the table of the government.
Pakistan's SBP issued a ban on banks and financial institutions from dealing with cryptocurrencies in 2018, citing concerns over volatility and potential illicit activities. This ban significantly limited cryptocurrency operations within the country and discouraged investment in this sector.
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