The road to digital assets

The path to digital assets is not an easy road from a regulatory perspective. Many initiatives are blooming worldwide leading to different local perspectives and interpretations. To help understand this fragmented environment, BNP Paribas has created a quarterly updated map of the regulatory updates and news in the major markets across the globe.

2021

GERMANY

On 1 October 2021, the regulation on transfers of cryptoassets entered into force. It is the transposition of the the FATF’s ‘travel rule’ for cryptoasset transactions into German law. Generally speaking, the draft rules extend the rules of Regulation (EU) 2015/847 (known as the Money Transfer Regulation) to cryptoasset transactions. This regulation harmonises the information that must accompany a funds transfer. The rules aim to ensure funds transfers are fully traceable in order to prevent, detect and investigate money laundering and terrorist financing.

The Financial Action Task Force (FATF) recommends the same requirement. Known as the ‘travel rule’, it requires virtual asset services providers, such as custodian wallet providers and exchange service providers, to obtain, hold, submit and make available to authorities certain information on virtual asset transfers. These obligations also apply to financial institutions that send or receive virtual asset transfers on behalf of their customers.

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On 6 September 2021, the Ministry of Finance published a draft regulation to introduce the possibility to issue fund shares of investment funds on a DLT in addition to the possibility to issue fund shares with a global certificate. The register of the tokenized fund shares needs to be kept by the depositary of the fund.

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On 5 August 2021, the Ministry of Finance published a draft regulation on the requirements of electronic securities registers. The regulation provides details for central registers and decentral registers on a DLT, i.e. crypto securities registers, which have been introduced with the new Electronic Securities Act. The decentral register can only be kept by a crypto securities registrar with a specific license for this new financial service under the supervision of BaFin.

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On 10 June 2021, the Electronic Securities Act (eWpG) entered into force.

On 6 May 2021, the German parliament has voted for the Electronic Securities Act (eWpG) on the basis of the proposed changes of the Finance Committee. Changes to the draft law of the Electronic Securities Act (eWpG) have been agreed in the Finance Committee of the German parliament on 5 May 2021.

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Aditional reading

On 4 March 2021, the German parliament (Bundestag) had its first reading on the draft bill on electronic securities (eWpG) of the German government cabinet. On 22 March 2021 the Finance Committee of the German parliament discussed the draft in a public meeting with industry experts. A second and third reading in the German parliament will take place in the coming months.

EU

On July 2021, the EC published a draft version of the recast of the Regulation on transfer of funds. The recast includes new requirements which extend existing EU rules on AML/CFT to the whole crypto-assets sector, obliging all service providers to conduct due diligence on their customers, notably through the application of the “travel rule” (transmission of key granular information related to a transaction in crypto-assets) to crypto-assets actors.

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In July 2021, the Governing Council of the European Central Bank (ECB) decided to launch the investigation phase of a digital euro project. The investigation phase is expected to last 2 years and will be launched in October 2021 to investigate what form the digital euro might take, as there are many ways it could be designed. This will allow the ECB to create and test possible solutions with the private sector. So far, no major technological restrictions to issuing a digital euro have been identified.

UK

In January, Her Majesty’s Treasury (HMT) opened a consultation on crypto-assets. The consultation looks to ensure the UK regulatory framework is equipped to harness the benefits of new technologies, supporting innovation and competition, while mitigating risk to consumers and financial stability.

In order to to keep up with the evolving nature of crypto, HMT suggest legislation be used to define the scope of the regulatory perimeter. However   the independent regulators, using agile powers to issue rules or codes of practice, will design and implement the detailed firm-level requirements within a framework of objectives and broader considerations set by HMT and Parliament.

2020

EU

In January 2020, the EU implemented its Fifth Anti Money Laundering Directive (AMLD5), which requires crypto firms and exchanges to follow enhanced KYC programs and reporting obligations. Crypto regulation will move forward as part of the new European Commission’s mandate.  The European Securities and Markets Authority has also announced it aims to focus on shaping a sound framework for crypto-assets.

On 24 September 2020, the Commission proposed a new legislation on crypto-assets aimed at boosting innovation while preserving financial stability and protecting investors from risks. The ‘Regulation on Markets in Crypto Assets’ (MiCA) will provide legal clarity and certainty for crypto-asset issuers and providers. A pilot regime is also being proposed for DLT market infrastructures that wish to trade and settle transactions with security tokens. The Commission’s overall objective is to have a comprehensive EU framework for crypto-assets put in place by 2024.

From October 2020 to January 2021, the European Central Bank opened a consultation on a digital euro, ie the project of a crypto-asset issued by the ECB, which could be used as a digital payment instrument. The ECB received a massive number of responses (8,221). The ECB will decide in the spring 2021 whether or not to launch a digital euro project.

FRANCE

AMF has published on 22 September 2020 a Q&A that presents the key points of the digital asset service provider regime created under the PACTE Law. It answers the most frequently asked questions from French and international businesses that wish to apply for DASP registration or license.

Banque de France has announced on in July the names of the eight applicants which were selected in response to its call for applications to experiment the use of central bank digital currency for interbank settlements-

GERMANY

The crypto-assets and crypto-custody legislation forms part of a legislative package implementing the 5th European Anti-Money Laundering (AML) Directive into German law and entered into force in January 2020. BaFin has issued various guidance notices regarding

In August, the German Ministry of Finance and Ministry of Justice have published a draft law on electronic securities (eWpG). The law will enable the issuance of digital bearer bonds on a DLT infrastructure without the requirement of a certificate. It introduces the definition of a decentralised securities register on a DLT and the new function of a registrar.

On 14 December, the German government cabinet has voted the draft law on electronic securities (eWpG) which has entered on 1 January 2021 into the voting process of the parliament. The law is expected to enter into force in Q1 2021. Here  are the main decisions

  • Enabling the issuance of digital bearer bonds on a DLT infrastructure without the requirement of a paper-based certificate
  • Introducing the definition of a decentralised securities register on a DLT
  • Classifying the registrar function as a new financial service under the BaFin supervision
  • Introducing electronic fund shares and bearer bonds, which can be issued without a certificate but in a central register. The central registrar function would be performed by either a CSD or a custodian.
ITALY

In January, Consob has published its final report on Initial offers and exchanges of crypto-assets

LUXEMBOURG

In July 2020, the Luxembourg government presented a Bill of Law 7637 to amend the Law of 5 April 1993 on the financial sector and the Law of 6 April 2013 on dematerialised securities (the “2013 Law”). The key objective of the bill is to modernise the existing legal framework for dematerialised securities.

The bill is a continuation of the law of 1 March 2019 which has expressly recognised the possibility to hold and register book-entry securities in securities accounts by way of distributed ledger technology (DLT). The bill recognises the possibility to use secure electronic recording systems (including DLT) for dematerialised securities (whether at issuance or upon conversion from another form of security).

NETHERLANDS

The Dutch Central bank began regulating organisations that offer crypto-related services inJanuary 2020. Firms offering services for the exchange between cryptos and fiat currency, and crypto wallet providers are required to register with the regulator to be authorised to operate. A licensing system should also be introduced for cryptocurrency services.

SWITZERLAND

Switzerland passed the so-called ‘blockchain law’ in September last year. It is being implemented in two phases: company law reforms on 1 February 2021 to be followed by financial market infrastructure upgrades from the beginning of August 2021. This will open the doors to a fully regulated cryptocurrency and digital securities industry in Switzerland. Switzerland now allows tokenized securities trade on a blockchain with the same legal standing as traditional assets. Swiss lawmakers decided not to create a completely new regime but adapted legislation to graft specific features of DLT onto the existing legal framework. The DLT amendments recognize tokenized securities as a new class of asset, whose legal ownership rights are automatically transferred via the blockchain to each new investor.

On 10 September 2020, the Swiss parliament passed a law to update existing corporate and financial regulations to make way for blockchain and distributed ledger technology (DLT). The law comes into effect on 1 February 2021. The Blockchain Act aims to welcome decentralized technologies while maintaining Switzerland’s integrity and reputation as a business and financial hub. A distinction is made between payment tokens or cryptocurrencies and security tokens, which have the same legal position as traditional securities. With respect to securities law, the main change is to support the existence of tamperproof electronic registries, although details will be left up to contract. Bankruptcy laws will also be amended to make room for crypto assets as will insolvency laws, particularly for custodians that go out of business. Financial market regulations will be adjusted to create a new license category for DLT trading systems, providing more flexible authorization.

FINMA, the Swiss market authority applies relevant provisions of financial market law regardless of the underlying technology. Additionally, FINMA has issued guidance on several crypto topics such as initial coin offerings, stablecoins and payments. Home to the “Crypto Valley”, it is worth noting that the state is home to several high profile projects such as Ethereum, Dfinity and Libra. Switzerland’s stock exchange is also building the SIX Digital Exchange, a fully integrated trading, settlement and custody infrastructure for crypto-assets which aims to provide a safe environment for the issuance and trading of crypto-assets.

UK

The Bank of England (BoE) has published a discussion paper to assess the risks and benefits of a Central bank digital currency.

On 21 September 2020, the Law Commission initiated works on two projects to ensure that English law can accommodate smart contracts and digital assets. The purpose of those works is to find any gaps in the law and identify reforms to ensure that the law can meet the growth in the use of those technologies.

2019

EU

In December 2019, the EU launched a public consultation on the regulatory treatment of crypto-assets. It aims to assess the need for a bespoke crypto regime and/or amendments to existing financial regulation.

FRANCE

The PACTE law establishes a specific voluntary regime for companies seeking to conduct an initial coin offering (ICO) or to offer crypto-assets services (Digital Assets Service Providers or DASPs). Mandatory registration is required for DASPs wishing to offer custody or purchase/sell crypto-assets in exchange for legal tender. The scope is limited to crypto-assets not qualifying as securities which remain bound by EU securities law.

GERMANY

Germany’s BaFin has approved a number of security token offering (STOs).

In August, BaFin has issued a 2nd advisory letter on prospectus and authorisation requirements in connection with the issuance of crypto tokens.

In November, a landmark legislation was adopted regarding crypto services. The new rules include a definition of crypto-assets and regulate providers of “crypto custody” services. Companies wishing to store, transfer and trade crypto-assets must obtain a license from the German regulator BaFin. A grandfathering mechanism was also introduced for firms already safekeeping crypto-assets in Germany.

ITALY

Italy does not have any crypto regulation or legal framework for crypto activities. Service providers of crypto activities must register with the Institution of Agents and Mediators. In March 2019, the Italian financial markets supervisory authority published a call for evidence on initial coin offerings (ICOs) and crypto-assets.

LUXEMBOURG

Bill 7363 brings transactions performed using DLT at par with traditional ones. The legal framework also offer fiscal advantages and tax exemptions for crypto assets. It is worth noting that the country is host to one of the largest crypto exchanges (Bitstamp).

UNITED KINGDOM

In July 2019, the Financial Conduct Authority (FCA) published its final “Guidance on Cryptoassets”, with the aim of clarifying to market operators what the applicable regulatory requirements for their crypto assets activities are.

Article updated in January 2021. The information contained in this article is believed to be reliable and is not intended to be exhaustive. This article is regularly updated. Reach out your relationship manager or client service manager for any information you may need.

2018

GERMANY

Germany’s BaFin has issued a 1st advisory letter on the classification of tokens as financial instruments.

2016-2017

FRANCE

The “Blockchain ordinances” (ordinances n° 2017-1674 du 8 décembre 2017) and the Sapin II law (law n° 2016-1691 du 9 décembre 2016) recognise the validity of the registration and transfer of some types of financial instruments (unlisted) on a blockchain.

Article updated in January 2021. The information contained in this article is believed to be reliable and is not intended to be exhaustive. This article is regularly updated. Reach out your relationship manager or client service manager for any information you may need.

2021

US

In October 2021 the US Department of Justice announced the creation of a National Cryptocurrency Enforcement Team (NCET), to handle  complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.  The NCET will combine the expertise of the Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), Computer Crime and Intellectual Property Section (CCIPS) and other sections in the division, with experts detailed from U.S. Attorneys’ Offices.  The NCET builds upon MLARS’s Digital Currency Initiative and will be informed by the Department’s Cryptocurrency Enforcement Framework, released in October 2020. Prioritized NCET activities include:  Investigate and prosecute cryptocurrency cases, when used as an illicit tool; Develop policies and strategic relationships; Improve enforcement and collaboration with federal, state, local and international law enforcement agencies; and engage private sector actors with expertise in cryptocurrency matters to further the criminal enforcement mission.

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In September 2021 U.S. Federal Reserve Chairman Jerome Powell spoke at the House Financial Services Committee meeting and clarified comments from a July hearing where he expressed interest in cryptocurrency regulation. In light of China’s recent cryptocurrency ban, Powell confirmed that the Fed has “no intention” of banning cryptocurrencies at this time.

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In September 2021 ransomware guidance,  OFAC noted that it has designated malicious cyber actors previously under its cyber-related sanctions program and other sanctions programs, including perpetrators of ransomware attacks and those who facilitate ransomware payments.  OFAC then designated SUEX OTC, S.R.O. (“SUEX”), a virtual currency exchange, for its part in facilitating financial transactions for ransomware actors, involving illicit proceeds from at least eight ransomware variants. Analysis of known SUEX transactions showed that over 40% of SUEX’s known transaction history was associated with illicit actors.  OFAC stated that it has imposed, and will continue to impose, sanctions on these actors and others who materially assist, sponsor, or provide financial, material, or technological support for these activities.

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In July 2021 the SEC issued a consented-to Cease and Desist Order against a U.K.-based website owner of cryptocurrency-review site, Blotics Ltd. (d/b/a Coinschedule Ltd.), for violating Section 17(a) of the Securities Act.  Industry was hoping the decision would clarify the SEC’s position as to whether and when cryptocurrencies qualify as securities, but it did not.   The SEC determined that the tokens which were sold to issuers for marketing packages that promised varying levels of benefits, provided an undisclosed, paid-for advantage in the competition to make Coinschedule’s “top 10 trusted ICOs” list. The failure to disclose this compensation arrangement, the Commission found, violated Section 17(b) of the Securities Act, better known as the “anti-touting” provision, which makes it unlawful to promote a security in exchange for payment without disclosing that you’ve been paid and how much.

The Coinschedule decision, however did not explain which tokens the SEC found to be securities or why; it simply concluded, “the digital tokens publicized by Coinschedule included those that were offered and sold as investment contracts, which are securities . . . .” Without knowing which digital tokens were sold as investment contracts and why the Commission sees them that way, digital token issuers and their lawyers lack clear guidance. The lack of such guidance continues to hamper industry and innovation. 

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In May 2021 the US Treasury Department on announced that it is taking steps, and said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service in an effort to crack down on cryptocurrency markets and transactions. Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury Department said in a release.

“This is why the President’s proposal includes additional resources for the IRS to address the growth of cryptoassets,” the department added. “Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on.”  Cryptocurrency assets currently have a market capitalization of about $2 trillion. 

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The Office of the Comptroller of the Currency (OCC) published a letter in January 2021 clarifying US national banks’ and federal savings associations’ authority to participate in independent node verification networks (INVN) and use stablecoins to conduct payment activities and other bank-permissible functions.  The OCC in recent months has been issuing more guidance aimed at easing banks’ concerns about the new digital asset technology.

2020

US

The Crypto-Currency Act of 2020, an omnibus bill aimed at comprehensive reform of U.S. cryptocurrency regulation was introduced 9 March. The bill looks to choreograph a wide range of digital assets to answer to the appropriate regulator. The proposal divides digital assets into three categories: crypto-commodity, crypto-currency and crypto-security. Respectively, the three categories would be governed by the Commodity Futures Trading Commission (CFTC), the Secretary of the Treasury via the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchange Commission (SEC).

The Office of the Comptroller of the Currency (OCC) published a letter clarifying the authority of OCC-regulated institutions to hold “reserves” on behalf of customers who issue certain stablecoins held in hosted wallets. This release follows a July OCC letter clarifying that OCC-regulated institutions are authorized to provide cryptocurrency custody services for customers pursuant to appropriate risk management processes and controls.

In September 2020, the US House of Representatives passed the Blockchain Innovation Act.  The BIA focuses on the use of blockchain technology in commerce, and instructs the U.S. Department of Commerce to consult with the Federal Trade Commission to conduct a study and submit a report on the state of blockchain technology, including its use to reduce fraud and increase security. A goal of the legislation is to establish a Blockchain Center of Excellence within the Commerce Department.

The Securities & Exchange Commission issued a statement in December 2020 and requested comment regarding the custody of digital asset securities by broker-dealers.  The Statement describes the minimum controls that broker-dealers must implement to comply with the Customer Protection Rule when acting as custodians of digital asset securities. The guiding principle is to mitigate the risk of loss of digital asset securities and the impact such an event would have on broker-dealers, their customers and counterparties, and other market participants.

The Commodities & Futures Trading Commission released a digital assets primer in December 2020.  The Primer defines the terms “virtual currency”, and “digital token”, and provides an overview of the marketplace and regulatory considerations under the CFTC.  The primer also summarizes CFTC jurisdiction over digital assets as well as market oversight controls.

2018

US

The Securities and Exchange Commission (SEC) considers cryptocurrencies to be securities since March 2018. Securities law is applied comprehensively for digital wallets and exchanges. The Commodity Futures Trading Commission (CFTC) considers bitcoin as a commodity and allows cryptocurrency derivatives to trade publicly.

Article updated in January 2021. The information contained in this article is believed to be reliable and is not intended to be exhaustive. This article is regularly updated. Reach out your relationship manager or client service manager for any information you may need.

2021

HONG KONG SAR, CHINA

On 21 May 2021, the Hong Kong Financial Services and the Treasury Bureau (FSTB) issued its consultation conclusions (Conclusions) on the introduction of a new regulatory framework in Hong Kong to licence and regulate virtual asset exchange (VA Exchange) operators.

The Conclusions adopt most of the proposals set out in the FSTB’s November 2020 consultation paper (Consultation Paper). Consistent with the proposals in the Consultation Paper, the Conclusions provide that:

  • The operation of a VA Exchange will be a regulated virtual asset activity under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) and persons operating a VA Exchange will require a virtual asset service provider (VASP) licence from the Securities and Futures Commission (SFC).
  • A VA Exchange is defined as any trading platform that is operated for the purpose of allowing an offer or invitation to be made to buy or sell any virtual asset in exchange for any money or any virtual asset, and which comes into custody, control, power, or possession of, or over, any money or any virtual asset at any point in time during its course of business.
  • Any VA Exchange that is already regulated as a licensed corporation under the voluntary opt-in regime supervised by the SFC pursuant to the Securities and Futures Ordinance (SFO) (i.e., exchanges that facilitate trading in at least one security virtual asset) will be exempt from the new regime. Decentralized virtual asset exchanges and other peer-to-peer trading platforms would also not be covered by the definition of a VA Exchange, provided that virtual asset transactions are conducted outside the platform and the platform is not involved in the underlying transaction by coming into possession of any money or any virtual asset at any point in time.
  • The term “virtual asset” is broadly defined to mean a digital representation of value that (i) is expressed as a unit of account or a store of economic value; (ii) functions (or is intended to function) as a medium of exchange accepted by the public as payment for goods or services, or for the discharge of a debt, or for investment purposes; and (iii) can be transferred, stored, or traded electronically. Central bank digital currencies, financial assets regulated under the SFO (e.g., security tokens), and stored value facilities (which are regulated by the Hong Kong Monetary Authority) are excluded from the definition of virtual assets.
  • Licensed VA Exchange operators will be subject to the anti-money laundering and counter-terrorist financing requirements stipulated under AMLO and other regulatory requirements. The SFC will conduct a separate consultation on these regulatory requirements before the commencement of the new regulatory regime.
  • Licensed VA Exchanges initially may only offer their services to “professional investors,” meaning high net-worth individuals with a portfolio of at least HK$8 million (around US$1 million), corporations with portfolios of at least HK$8 million or total assets of at least HK$40 million (around US$5.16 million), or institutional investors such as licensed banks, broker-dealers, and asset managers. Retail customers (i.e., non-professional investors) may not trade virtual assets with VA Exchanges licensed under the new regime.
  • Any person who is not a licensed VA Exchange operator is prohibited from actively marketing, whether in Hong Kong or elsewhere, to the public of Hong Kong a regulated virtual asset activity or a similar activity elsewhere.

The Conclusions have refined and expanded the eligibility criteria of VA Exchanges that can apply for a licence. Under the initial proposal, only Hong Kong incorporated companies with a permanent place of business in Hong Kong would be considered for a VASP licence. The Conclusions expand the eligibility criteria to include companies incorporated outside Hong Kong but registered in Hong Kong under the Companies Ordinance. In practice, this means that offshore VA Exchanges do not need to incorporate a new Hong Kong company in order to apply for a VASP licence. Instead, offshore VA Exchanges can establish a place of business in Hong Kong with their existing offshore entity (i.e., a branch), register such entity with the Hong Kong Companies Registry and apply for a VASP licence as a Hong Kong branch of the offshore company.

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On 23 February 2021, the Hong Kong Monetary Authority (HKMA), together with the Bank of Thailand (BOT), the Central Bank of the United Arab Emirates (CBUAE) and the Digital Currency Institute of the People’s Bank of China (PBC DCI), announced the joining of the CBUAE and the PBC DCI to the second phase of Project Inthanon-LionRock1, a central bank digital currency project for cross-border payments initiated by the HKMA and the BOT.  This joint effort is strongly supported by the Bank for International Settlements Innovation Hub Centre in Hong Kong and the project has been renamed as “m-CBDC Bridge”.

CHINA

China is fast expanding trials for the usage of the Digital Renminbi amongst both key financial institutions and at an increasing number of online and offline consumer sites. All six of China’s big state-owned banks, including Agricultural Bank of China (ABC), Bank of China (BOC), Bank of Communications (BOCOM), China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC) and Postal Savings Bank of China (PSBC), have deployed their own Digital Renminbi wallets according to domestic media reports. Customers can apply to be included on a “trial white list” at selected banking outlets to participate in test versions of the wallets, with applications accepted via online banking apps as well as QR code scans.

In Beijing an increasing number of businesses are participating in trials for the use of the Digital Renminbi, including chain restaurants, shopping malls and logistics firms, while in Shanghai vending machines in the metro system as well as shopping malls in the Xujiahui district have commenced acceptance of the central bank digital currency for payments. Chinese e-commerce platforms that are participating in Digital Renminbi trials currently include JD.com and Meituan.

CHINA

On 1 January 2021, the Fengtai District Bureau of Commerce has announced that the People’s Bank of China’s pilot programme to test and promote its central bank digital currency, the digital yuan, has been extended to Beijing, following large-scale trials in Shenzhen and Suzhou.

2020

HONG KONG SAR, CHINA

In November 2020, the Hong Kong Financial Services and the Treasury Bureau (FSTB) issued a consultation paper outlining a new regulatory framework that will bring operators of virtual asset exchanges within the formal regulatory perimeter of the Securities and Futures Commission (SFC) for the first time. The outcome of the proposed regulatory framework is that any Hong Kong-based VA Exchange (or overseas VA Exchanges that target Hong Kong customers) will need to be licensed by the SFC, and will, initially, only be able to deal with customers that qualify as professional investors.

On 16 December 2020, the SFC announced that it has granted the first licence to a virtual asset trading platform in Hong Kong. The platform will only serve professional investors under the close supervision of the SFC  and will be subject to tailor-made requirements similar to those which apply to securities brokers and automated trading venues.

JAPAN

Japan amends its crypto asset regulation with a focus on derivative transactions generally enforceable from May 1, 2020. Crypto-assets qualifying as securities will also be subject to new requirements while crypto custody will be subject to licensing. Crypto trading activities will also have to fulfil new rules regarding unfair trading and practices.

INDIA

In January 2020, the Reserve Bank of India underlined it did not ban cryptocurrencies such as bitcoin, but only ring-fenced regulated entities like banks from risks associated with crypto-assets trading. The future of the Indian crypto ecosystem remains as such unclear.

2019

CHINA

In October 2019, a new law was adopted with the aim of facilitating China’s transition to blockchain technology. It has paved the way for China to become the first state to issue a central bank digital currency (CBDC).

INDIA

In July 2019, a legislative panel proposed a ban on all non-sovereign cryptocurrencies. Officials have also voiced their concerns about Facebook’s Libra project.

2018

INDIA

In April 2018, the Indian central bank (Reserve Bank of India) issued a circular calling on regulated entities to stop providing services to entities dealing in or settling cryptocurrencies.

2016-2017

JAPAN

Japan adopts the Virtual Currencies Act on April 1st 2017, and requires licenses for all crypto trading platforms to exercise any activity related to cryptocurrency.

Article updated in January 2021. The information contained in this article is believed to be reliable and is not intended to be exhaustive. This article is regularly updated. Reach out your relationship manager or client service manager for any information you may need.

2021

INTERNATIONAL

In March 2021, the OECD-let Financial Action Task Force (FATF) opened a consultation on the revision of its Guidance on the risk-based approach to virtual asset (VAs) and virtual asset service providers (VASPs), initially published in June 2019. The consultation seeks to update guidance on six issues : (1) definitions of VA and VASP to make clear that all relevant financial assets are covered by the FATF Standards, (2) application of the FATF guidance to so-called stablecoins, (3) additional guidance on the risks and potential risk mitigants for peer-to-peer transactions, (4) updated guidance on the licensing and registration of VASPs, (5) additional guidance for the public and private sectors on the implementation of the ‘travel rule’ and (6) include Principles of Information-Sharing and Co-operation amongst VASP Supervisors.