Tag: Ban

IMF Prioritizes Regulation over Ban on Crypto

by Blockchain News

The International Monetary Fund (IMF) has expressed its preference for regulating crypto assets, including stablecoins, rather than imposing an outright ban. IMF’s Managing Director, Kristalina Georgieva, stated during the G20 finance ministers meetings in Bengaluru, India that differentiating and regulating digital assets are the agency’s top priorities. However, the IMF has not ruled out the option of banning cryptocurrencies entirely if they pose a significant risk to financial stability.

In a recent interview with Bloomberg, Georgieva said that much confusion still exists around the classification of digital money. The IMF’s first objective is to differentiate between central bank digital currencies (CBDCs) that are backed by the state and publicly issued crypto assets and stablecoins. Fully-backed stablecoins can create a “reasonably good space for the economy,” while non-backed crypto assets are speculative, high risk, and not money.

Georgieva cited a recent paper recommending global regulatory standards for crypto assets, which stated that they cannot be legal tender because they are not backed. However, if crypto assets begin to pose a greater risk to financial stability, the IMF would not rule out the option of banning them. Nevertheless, Georgieva emphasized that good regulations, predictability, and consumer protection would be the better approach, and banning would not need to be considered.

Georgieva explained that an inability to protect consumers from the rapidly evolving world of crypto assets would be the primary catalyst for banning cryptocurrencies. The IMF, the Financial Stability Board, and the Bank for International Settlements are jointly preparing to release regulatory framework guidelines in the second half of this year.

The IMF’s stance on regulating crypto assets aligns with other global regulators, such as the G20, which also support establishing a regulatory framework for digital currencies. Some countries, including China and India, have taken a more aggressive approach and banned cryptocurrency trading altogether. In contrast, countries such as the United States and Switzerland have implemented a regulatory framework for digital assets, aiming to balance innovation and investor protection.

The cryptocurrency market has experienced significant growth in the last decade, with the emergence of Bitcoin and the subsequent proliferation of other cryptocurrencies. The total market capitalization of cryptocurrencies has surpassed $2 trillion, attracting the attention of investors and regulators worldwide. However, the market’s volatility and the lack of regulatory clarity have raised concerns about the potential risks associated with investing in digital assets.

In conclusion, the IMF supports regulating the world of digital money and aims to differentiate between CBDCs and crypto assets to establish a regulatory framework for digital currencies. While the agency has not ruled out banning cryptocurrencies entirely, it would prefer to pursue good regulations, predictability, and consumer protection. The upcoming regulatory framework guidelines, jointly prepared by the IMF, the Financial Stability Board, and the Bank for International Settlements, are expected to provide a comprehensive regulatory framework for crypto assets.

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Cambodia Bars Using and Trading of Crypto

by Blockchain News

In Asia, the Cambodian Ministry of Finance and Economics announced on Wednesday that no-issuance and circulation of cryptocurrencies would be allowed in the country. 

The agency, which is responsible for the administration of financial and economic policy and affairs in the Kingdom of Cambodia, released a document, stating that despite the rapid growth of fintech and its significant impact on the global economy in recent years, the Cambodian government has not changed its policy of banning the use of crypto coins. 

According to the document, the National Bank of Cambodia, the Cambodian Ministry of Finance and Economics, the Securities Commission, and the National Police have jointly issued a statement that prohibits any issuance, circulation, and trading of cryptocurrencies in the country. So far, the Cambodian government has not awarded a business license to any crypto firm in the nation, meaning that it is illegal to issue, circulate, and trade crypto assets in Cambodia.

The Cambodian Ministry of Finance and Economics further stated that currently Cambodia’s draft FinTech Development Policy is in force to ensure that the nation can benefit from the rapid development of financial technology and minimize risks.

The agency also mentioned that the Cambodian government has introduced some new policies and measures in order to promote the revitalization and recovery of the economy after the pandemic of COVID-19. The government believes fintech is one of the key policies that would enable such recovery.

Gearing Up for CBDC

The latest move indicates that Cambodian authorities are taking more steps to crack down on cryptocurrencies.

In October 2020, the Central Bank of Cambodia adopted blockchain technology to offer digital versions of its own digital currency to steer citizens away from trading in what many perceive to be a bubble associated with cryptocurrencies.

During that time, The National Bank of Cambodia launched its digital currency, Bakong – a blockchain-based digital payment system – as part of effort to wean people off US dollar transactions with a digital alternative and to encourage cashless transactions.

Since trading cryptocurrency is illegal in Cambodia, trading levels have been quite low. However, many local investors are actively trading cryptos through foreign platforms.

 

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EU Parliament Approves Tough Rules to Ban Anonymous Crypto Transactions

by Blockchain News

According to Cityam.com media outlets, European Union lawmakers on Thursday voted in favour of new proposals that seek to outlaw anonymous crypto transactions.

Two parliamentary committees – the EU Committees on Economic and Monetary Affairs (ECON) and Civil Liberties, Justice and Home Affairs (LIBE) – yesterday voted to extend the anti-money laundering requirements that currently apply to traditional fiat payments over EUR 1,000 ($1,115) to the crypto sector.

However, the new rules scrap one of the fundamentals of crypto payments, so payers and recipients of even the smallest cryptocurrency transactions would need to be identified. The legislation also cracks down on transactions with unhosted or self-hosted wallets (wallets whose private keys are held by the funds’ owner, popularly referred to as self-hosted or self-custody wallets). Furthermore, the new rules require cryptocurrency companies to identify the parties involved in transacting cryptocurrency beyond their customers. The measures could see unregulated cryptocurrency exchanges cut off from the conventional financial system.

The proposals are set to proceed to the trialogue stage, which will see the rules debated by the EU parliament, Commission, and Council.

The report shows that more than 90 lawmakers voted in favour of the proposals, a move that various stakeholders have described would invade privacy and stifle innovation.

Major players in the crypto industry have opposed the proposals. Last night, Brian Armstrong, the CEO of Coinbase crypto exchange, expressed his concerns about the new rules ahead of the vote, calling it an anti-law enforcement, anti-innovation, and anti-privacy proposal. The executive warned that the proposal will create a “new crypto surveillance regime” in Europe.

“Any time you receive 1,000 euros or more in crypto from a self-hosted wallet, Coinbase will be required to report you to the authorities. This applies even if there is no indication of suspicious activity,” Armstrong stated, criticizing the rules for treating crypto customers more harshly than fiat users.

Paolo Ardoino, the Chief Technology Officer at Bitfinex digital asset trading platform, echoed Armstrong’s comments, stating that the rules entail heavy security risks and privacy violations.

Combating Financial Crime

The debate about new rules for using cryptocurrencies has been going around for some time. In June last year, the EU Commission proposed that future transactions of crypto assets must be able to be tracked and assigned to individuals as part of efforts to combat money laundering and terrorist financing.

According to KYC guidelines, businesses that provide crypto services would then have to identify users, such as using ID cards.

A new draft for crypto regulation in the EU is currently causing unrest in Brussels (the administrative centre of the European Union). The new draft states that there should be an identification requirement for crypto-asset transactions in all amounts. The EU Committees on Economic and Monetary Affairs (ECON) and on Civil Liberties, Justice, and Home Affairs (LIBE) have spoken out in favor of the complete anonymity of crypto payments.

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Reserve Bank of India Advocates for Crypto Ban

by Blockchain News

The Reserve Bank of India (RBI) has advocated for a blanket ban to be imposed on the digital currency ecosystem as the central bank believes this nascent asset class poses a threat to the rise of the country as a global power.

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While the underlying concern seems noble, the call from the RBI, which comes as a published critical bulletin, has sent the crypto world into a new frenzy, having nursed the possibilities of these currencies being regulated in the country.

India remains a crucial hub for the future of digital currencies, not just because of its population and market but also because great talents come from the country. In the Bulletin, the RBI acknowledged and commended the technology backing the cryptocurrencies. The understanding that their existence poses a threat to the financial sovereignty of India is enough ground for an outright ban.

“Historically, private currencies have resulted in instability and have evolved into fiat currencies over centuries. The retrograde step back to private currencies cannot be taken simply because technology allows it without considering the dislocation it causes to society’s legal, social and economic fabric.”

Indian authorities were making excellent headway in pushing for the regulation of the crypto ecosystem as consultations with important stakeholders is already underway. With a new tax proposal being introduced in recent times, Indian crypto investors already feel that the country is finally tilting as being a pro-crypto nation. The current insinuations from the RBI may serve as a setback to these advanced strides with respect to crypto engagement in India.

Talking about the situation of current investors, the RBI note says anyone whose money is tied in crypto will be given ample time to liquidate their holdings. However, the bank noted that the fact that these investors understand the risks in the space should make them ready to stomach any turn in events.

“Persons who have invested in these instruments are fully aware of the risks involved. Investors who have acquired these instruments have done so with their eyes wide open, at their own risk, and do not warrant any regulatory dispensation.”

The varying interest in the Indian crypto ecosystem has introduced an additional level of uncertainty to the country.

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ENS dumps director of operations in condemnation of homophobic tweets

by Cointelegraph

True Names Limited, the nonprofit behind distributed domain protocol Ethereum Name Service, announced it would be ending its contract with director of operations Brantly Millegan after many uncovered his previously posted anti-LBGTQIA tweets.

On Feb. 6, the decentralized autonomous organization of Ethereum Name Service, or ENS, asked users to weigh in on what actions, if any, should be taken against Millegan in regards to a May 2016 tweet in which he said “homosexual acts are evil” and “transgenderism doesn’t exist.” The DAO said some had proposed suspending Millegan from his leadership roles at ENS, voting to remove him as a director of the ENS foundation, and asking him to step down from his position.

Though the DAO did not officially vote on any resolution as of the time of publication, ENS founder and developer Nick Johnson announced earlier today that True Names Limited had terminated Millegan’s contract given his position was “no longer tenable.” Twitter also deleted the homophobic tweets and suspended Millegan’s account, preventing him from tweeting, liking, and retweeting content. 

“Many of you were hurt by Brantly’s comments over the past 24 hours, and we strongly believe that ENS should be an inclusive community,” said Johnson. “Going forward we’ll continue to do everything we can to ensure that remains the case.”

Before losing access to his Twitter account, Millegan stood by his 2016 statement, implying it was in accordance with his Catholic faith. He later claimed in a Discord discussion that he had “never excluded anyone from ENS” based on their identity or beliefs.

“I don’t think it’s practical or moral for the web3 industry to exclude the many traditional-minded Christians, Muslims, jews, and others who agree with me,” said Millegan on Discord.

However, the 2016 tweet does not stand alone in terms of controversial statements. Millegan reiterated his views on homosexual acts in a 2018 thread over birth control on the social media platform, calling them “gravely immoral.” In addition, a November 2016 tweet from the ENS operations director shows he posted a story from conservative news outlet National Review promoting a questionable narrative about racial bias.

“What I believe is the mainstream traditional Christian positions held by the world’s largest religion,” said Millegan on Feb. 5. “It’s not exactly fringe.”

It’s unclear how many within the ENS community were in favor of Millegan’s removal, but Johnson’s termination of Millegan’s contract suggests a significant number were in favor of doing so. Eleftherios Karapetsas, an ENS delegate, said in the governance discussion forum that Millegan should be given the opportunity to respond to the community outrage, but “if indeed he still truly holds the belief that a group of people should not have the right to exist, or harbors hate towards them I don’t believe that being part of the leadership of this project is appropriate.”

He added on Twitter:

“You can disagree with someone and still co-exist as long as neither tries to impose their views on the other person or hurt them for what they believe.”

Related: ENS’ director of operations says that DAO-based governance ‘has always been the plan’

Launched in 2017, the ENS protocol allows users to register domain names ending in “.eth” and direct them to Ethereum wallet addresses. The project distributed 100 million of its ENS governance tokens in a November 2021 airdrop.

Cointelegraph reached out to Brantly Millegan, but did not receive a response at the time of publication.