For blockchain communities, 2021 has been an exciting and at times heartbreaking roller coaster year, as governments across Asia have taken action to quell – or support – emerging financial innovations in blockchain technology. From China’s crackdown on crypto to Australia’s attempt to regulate itself to become a global leader in the crypto industry, governments have taken very different positions. Here is a quick overview of Forkast. News‘five biggest regulatory stories of the year.
1. China bans cryptocurrency, smoothly launches e-CNY
China’s ban on cryptocurrency-related transactions and activities, including those conducted through exchanges based outside the country, has rocked the industry.
The country has stepped up its crackdown on cryptocurrency mining activities as China’s great exodus to Eastern Europe and the United States continues. Some of the world’s largest cryptocurrency exchanges, including Huobi, OKEx, and Binance, have been blocked by internet search engines and social media platforms nationwide. Citing a responsibility to “protect people’s property and maintain economic, financial and social order”, the Chinese authorities have taken action against more than 380 criminal groups who have allegedly engaged in deceptive promotions and money laundering in virtual currency during the first half of 2021, according to the China National Anti-Fraud Center. the data shows.
Despite the authority’s crackdown on crypto, the central bank of China – the People’s Bank of China – has actively developed its central bank digital currency (CBDC), the e-CNY, for what is expected to be more uptake. wide at the Beijing Winter Olympics in February.
“The Chinese CBDC will give users, young and old, access to a digital ecosystem for global commerce, which will make transactions with China as easy as buying from Amazon or Alibaba,” Richard Turrin, a fintech consultant based in Shanghai who recently released “Cashless: China’s Digital Currency Revolution,” said Forkast.News. “It’s a killer feature, a counter-game in a world that is actively seeking to“ decouple ”from China. “
2. Indian cryptocurrency market in turmoil as new parliamentary bill signals total ban
India’s crypto community is on the brink as a crypto bill that is expected to be introduced in the winter session of Parliament has been delayed. As described on the parliamentary session’s agenda, the bill aimed to lay the framework for a central bank digital currency while banning all private cryptocurrencies. The news sparked panic in the sale of cryptocurrencies that caused Bitcoin and Ethereum prices to drop nearly 24% on the first day after the November 23 announcement. As crypto investors eagerly sought information on the elusive bill, media reported that violators of the crypto ban could be jailed. and fines of up to US $ 2.65 million.
Some crypto experts believe the fears are overblown and India will not ban all private cryptocurrencies, especially after seeking advice from the crypto community. “First, the Parliament’s Standing Committee invited a public consultation, and then our Prime Minister himself stepped forward to call for crypto regulation in India,” said Nischal Shetty, CEO of the exchange. of WazirX crypto. Forkast. News in an email in November. “That being said, let’s respectfully wait to hear more about the bill that will be tabled in Parliament.”
3. K-pop catches NFT, metaverse fever in South Korea as some crypto exchanges shut down
Of all the assets developed on the blockchain, none have captured the imagination of the creative class – artists, musicians, influencers, and even athletes and celebrities – as non-fungible tokens (NFTs) did in 2021. In South Korea in particular, the stars of the massively popular K-pop music scene – with an estimated impact of US $ 10 billion on the country’s GDP per year – paved the way for NFTs and the metaverse.
In July, K-pop entertainment agency JYP, which runs TWICE and 2PM, partnered with blockchain company Dunamu to create NFTs using content from JYP. A leading K-pop agency, Cube Entertainment, which manages popular artists and groups such as Jo Kwon, BTOB, PENTAGON, CLC and (G) I-DLE, formed a joint venture with Animoca Brands in November dedicated to the construction of a musical metaverse. and the NFT show, reinforcing that enthusiasm at the intersection of emerging technology and pop art.
Amid this wave of creative investment in NFTs, the government has focused its regulatory efforts on cryptocurrency. By the September deadline for new crypto requirements, half of the country’s 63 crypto exchanges were wiped out for non-compliance. But as a sign of government approval of sorts, South Korean lawmakers are debating how to protect investors as well as tax cryptocurrency and NFTs.
A November Financial Services Commission (FSC) report brought a series of crypto regulatory proposals to the attention of the National Assembly, including a requirement for virtual asset companies to disclose a white paper , a token valuation, legal and business reports, and suggested that the virtual asset industry create a legal association. for self-regulation and dispute resolution.
And what about reports that some South Korean officials have left prestigious government positions to bet their careers in the crypto market? A South Korean media outlet reported that an FSC deputy director resigned in December to work for the Bithumb cryptocurrency exchange. Park Sung-jun, director of the blockchain research center at Dongguk University, said Forkast. News that “FSC officials have the opportunity to gain insight into the current state and future of the virtual asset industry, so they are trying their luck by taking the plunge.”
See the related article: NFT and the music industry: symbolic gesture or transformative technology? | Part 1
4. Australia seeks to transform the payments industry
In Australia, the government is looking to lead the way and encourage the industry to follow. Its October report, Australia as a Technology and Financial Center, aimed to improve the country’s competitiveness in the global crypto industry with 12 regulatory recommendations. Following that report, in December, the country’s treasurer Josh Frydenberg said the Treasury was considering requiring national crypto exchanges to hold digital assets for local onshore customers, introduce licensing regimes for them. exchanges and reveal more details about the development of a central bank digital currency. (CBDC) in the country. Frydenberg said these were the most important financial regulatory reforms in 25 years.
“The call for the regulation of [Senate] The report has set wheels in motion, and it looks like the treasury team is the one going to get it back, ”said Jonathon Miller, Australian managing director of the Kraken crypto exchange. Forkast. News. “My hope here is that the way they see it is like an emerging industry, not an established industry. Whether or not the custody regime fits an existing asset class or not, it is impossible to say. But I would say crypto remains a very unique asset class and probably needs its own unique treatment.
5. Following China’s crypto crackdown, Singapore licenses crypto exchange
As one of the world’s leading financial centers, Singapore has followed a fine line in nurturing the FinTech sector. Following China’s crackdown on cryptocurrency this year, many crypto enthusiasts and businesses have turned their attention to the island city-state.
“We will see a growing exodus of Chinese crypto entrepreneurs, and I believe this will lead to a spread of crypto technology in Southeast Asia and accelerate the rise of Southeast Asia as a hotbed of crypto. ‘crypto innovation, “Lily Z. King, COO of a Singapore-based crypto asset management and custody platform, wrote in a Forkast. News September editorial.
In the same month, Singapore-based fintech company FOMO Pay became the first of 170 applicants to obtain a license from the Monetary Authority of Singapore (MAS) to provide a digital payment token service, which applies to transactions involving cryptocurrencies. The company says the license helps expand its range of payment services for its customers in Singapore and the region.
In a Q&A interview with Forkast. NewsLouis Liu, CEO of FOMO, said, “The regulator has taken a practical risk-based approach to clearly break down the activities that need to be regulated and compliance is a top priority. But the [Monetary Authority of Singapore] will guide you. They are open to discussion and were like a partner or collaboration.
Singapore-based cryptocurrency trading platform Coinhako last month received MAS approval in principle for a digital payment token service license, making it the first local cryptocurrency exchange native to announce that he is about to obtain the license. In the meantime, Huobi Group, the operator of China’s largest cryptocurrency exchange, has decided to set up a regional hub in Singapore, marking another important step Singapore is taking in an effort to create a user-friendly crypto market. .
Meanwhile, the Singaporean branch of Binance, the world’s largest crypto exchange, withdrew its MAS license application in December and will cease operations by February 2022. “We always put our users first. hence our decision to close Binance. sg was not taken lightly, ”Richard Teng, CEO of Binance Singapore (Binance.sg), said in a statement.
Binance had already stopped supporting crypto trading on its main platform for users in Singapore after MAS added Binance.com to its investor alert list in September, flagging entities that may have given public notice. the impression that they were authorized.
Since the regulatory environment is still unclear in most countries in Asia, expect more attempts from governments in 2022 to clarify their FinTech policies.