tl;dr
The People’s Bank of China has highlighted global efforts to regulate cryptocurrencies in its 2024 Financial Stability Report. 51 countries and regions have implemented bans on cryptocurrency activities, while others have introduced new laws or revised existing regulations. In the U.S., the SEC appr...
People’s Bank of China underscores global efforts to regulate cryptocurrencies.
U.S., EU, UK, Singapore, and Japan adopt unique regulatory approaches.
Hong Kong implements a dual licensing system for virtual asset operators.
The People’s Bank of China has released its 2024 Financial Stability Report, spotlighting global crypto regulation efforts. The report details that 51 countries and regions have implemented bans on cryptocurrency activities. At the same time, others have introduced new laws or revised existing regulations.
GLOBAL CRYPTO REGULATION EFFORTS IN 2024
In the United States, the SEC historically rejected over 20 applications for spot Bitcoin exchange-traded funds (ETFs) between 2018 and 2023. However, January 10, 2024, saw the approval of the first 11 Bitcoin spot ETFs in the United States. Following the approval, the SEC chairman cautioned the investing public. He noted that the approval should not be seen as an endorsement of Bitcoin or related products, urging investors to be vigilant. Meanwhile, in Europe, the Crypto Asset Market Regulation Act (MiCA) has been passed. This act represents the world’s first comprehensive framework for regulating virtual assets and will take effect in 2025. The UK is also taking steps to regulate the crypto market by incorporating virtual assets into its Financial Services and Markets Act. Similarly, Singapore has issued its Stablecoin Regulatory Framework, which defines the scope of regulated stablecoins and sets requirements for issuers. In addition, Japan has enacted the “Funds Settlement Act,” which restricts the issuance of stablecoins to licensed banks, registered transfer agents, and trust companies.
HONG KONG’S DUAL LICENSING APPROACH
Hong Kong has adopted a dual licensing system for virtual assets, dividing them into securitized and non-securitized financial assets. Security tokens fall under the Securities and Futures Ordinance, while non-security tokens are governed by the Anti-Money Laundering Ordinance. Under this approach, virtual asset operators must obtain licenses from the relevant authorities to operate legally. Financial institutions like HSBC and Standard Chartered Bank must also include cryptocurrency exchanges in their routine customer monitoring processes.
GLOBAL FRAMEWORKS FOR CRYPTO REGULATION
The Financial Stability Board (FSB) has introduced guidelines for crypto regulations, focusing on consistent global standards to reduce risks. Key principles include “same business, same risks, same regulations” and promoting cross-border cooperation. The FSB’s recommendations cover various aspects of crypto regulation, including:
- Governance
- Risk management
- Data security
- Financial stability risks
- Multi-functional crypto service providers
In sum, the report highlights global efforts to regulate crypto markets with increased scrutiny and coordinated international strategies to manage financial stability risks associated with crypto assets.