The 12th issue of our legal round-up.
We continue with a series of weekly round-ups prepared by Mercuryo Legal Counsel Adam Berker to keep you updated on crypto regulations.
Australia to Boost Crypto Industry
Australia plans to develop a regulatory framework for cryptocurrencies to attract new investments. Lawmakers are being urged to make major amendments that would simplify the work of crypto companies. Some possible law modifications may help to provide crypto companies with access to banking services, establish a clear legal framework for the custody of the digital assets, regulate DeFi projects, and establish a standard market regime for licensing crypto exchanges.
Currently, Australian regulation has certain obstacles for crypto companies like complex customer identification requirements or invalidity for crypto companies to open bank accounts in local banks. Nevertheless, Australia may become a more attractive place for virtual currency service providers if the amendments are finally introduced.
Pakistan to Regulate Cryptocurrencies Within 3 Months
In April 2018, the Central Bank of Pakistan banned cryptocurrency transactions for financial institutions, individuals, banks, microfinance organizations, and payment providers. Unexpectedly, on October 20, 2021, the High Court of Sindh province instructed the executives to form a committee to create a regulatory framework for the regulation of digital assets.
Regulators like the Central Bank, the Securities and Exchange Commission, and the Ministries of Finance, Justice and Information Technology will work on the new laws within three months.
We may say that these measures may be aimed at local crypto companies since the new regulations are less likely to attract new providers to Pakistan due to the high-risk profile of the country in the financial area.
Dubai Introduces Regulations for Investment Tokens
The Dubai Financial Services Authority (DFSA) has launched its regulatory framework for investment tokens. The investment tokens regulatory framework applies to persons interested in marketing, issuing, trading, or holding investment tokens in or from the Dubai International Financial Centre (DIFC). It also includes authorized firms wishing to undertake financial services relating to investment tokens, such as dealing, advising, arranging transactions relating to investment tokens, or managing discretionary portfolios or collective investment funds.
Furthermore, The DFSA is drawing up proposals for tokens not covered by the framework. These are expected to cover cryptocurrencies, utility tokens, and stablecoins.
As we may see, the UAE is strengthening its position in the global crypto market by introducing new regulations. If national lawmakers finally develop a clear and friendly policy for crypto, the UAE may become one of the most promising jurisdictions. Still, it is expected to become attractive only for big market players since the local licenses require significant investments. For instance, the Abu Dhabi Global Markets initial crypto authorization fees may go up to $125,000 with annual $60,000 supervision fees.
The US Gets Path to Rein In Stablecoins
The US Security and Exchange Commission is expected to lead the country’s efforts to regulate the stablecoin sector. It has already reached an agreement with the other US agencies to take the reins on proposing legislation and overseeing the stablecoin industry.
This initiative will lead to stricter regulation of stablecoins and the initiation of in-depth audit companies, targeting some influential stablecoin issuers. In the past, similar actions have been taken against Circle and Tether.
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