What are the latest developments in crypto rules and regulation around the world? Here are highlights of what’s happened over the past few weeks:
Bahrain issues new rules for crypto-related activities
In late February, the Central Bank of Bahrain issued new rules aimed at ensuring that crypto-related activities are “brought within the regulatory perimeter and are subject to comprehensive regulatory and supervisory measures”. Those rules include a requirement that any encrypted cryptocurrency wallets must always be retrievable, and that clients receive clear instructions for the use of such wallets. “We will continue to enhance our regulatory framework in order to keep pace with the innovations taking place in the major financial centres around the globe,” Khalid Hamad, executive director, banking supervision, said in a press announcement. “The CBB’s introduction of the rules relating to crypto-assets is in line with its goal to develop… comprehensive rules for the FinTech eco-system supporting Bahrain’s position as a leading financial hub in the MENA region.”
Supreme Court orders Indian government to clarify cryptocurrency regulations
India’s Supreme Court has given the government four weeks to clarify its rules for cryptocurrencies in a ruling on 25 February. A government panel has been working on such regulations since late 2017 without a deadline for completion. “In the absence of a well-defined policy, the cryptocurrency ecosystem is choking,” Quartz India reported. “Since July 2018, banks have been barred by the Reserve Bank of India (RBI) from undertaking any business relation with crypto bourses or traders. This has dealt a death blow to the business as trading volumes plummeted, and the exchanges dragged the central bank and the government to court.”
Kenyan fintech sandbox to exclude cryptocurrency firms
Kenya’s Capital Markets Authority recently published a draft regulatory sandbox policy guidance note to foster and promote “the responsible growth of fintech” in the country, according to Paul Muthaura, the agency's chief executive. However, the site BitcoinKE reported that the sandbox environment will not be open to cryptocurrency firms. “Blockchain firms will be considered so long as they are not dealing with cryptocurrencies since the CMA’s mandate does not extend to currency,” Muthaura was quoted as saying. “The CMA regulatory sandbox can only serve financial innovations that are directly within the regulatory perimeter of the CMA.”
Russia eyes new crypto law and considers oil-based digital currency
The Russian news site Rambler reported in late February that the State Duma “plans to review and adopt a law on cryptocurrency in March”. The law is aimed at helping Russia encourage the development of blockchain and cryptocurrency technologies. The report also noted that Igor Yusufov, the head of Russia’s Corporation Energy and a former Energy Minister, has proposed creating an oil-backed cryptocurrency. “After the launch of the cryptocurrency platform, oil-producing countries will be able to manoeuvre with respect to financial and trade restrictions, which have become too many in recent years,” Yusufov told the Rambler. “Based on this, the project will bring the greatest benefit to OPEC+ countries, including Russia, which will be able to increase oil and gas exports.”
Philippines economic authority says new cryptocurrency rules will ‘protect investors’
Acting through its Cagayan Economic Zone Authority (CEZA), the Philippines has unveiled “a comprehensive set of new rules governing cryptocurrencies in a bid to effectively regulate and protect investors”. Under those rules, CEZA would regulate the crypto market and require proper documentation for any digital asset token offerings. “CEZA is moving forward with its goal to develop the economic zone as the centre of fintech firms in Southeast and Northeast Asia,” Juanita Cueto, chair of the Asia Blockchain and Crypto Association, said in a press announcement. “The economic zone authority has already approved and issued provisional principal offshore virtual currency exchange licenses to 19 companies engaged in the blockchain ecosystem industries.”
Central Bank in Iran paves way for wider use of cryptocurrencies
In an early draft of new rules, the Central Bank of Iran proposes to reverse a previous ban on cryptocurrencies, Aljazeera reported recently. While authorising bitcoin and other cryptocurrencies, as well as initial coin offerings and crypto mining, exchanges and wallets, the rules would still prohibit the use of “global cryptocurrencies” for payments within Iran. The central bank imposed the ban last April in “an effort to prevent further capital flight amid the slump of its currency”, according to Aljazeera.
Indonesia gives go-ahead to crypto trades, with more new rules to come
Indonesia’s Commodity Futures Trading Regulatory Agency recently gave the go-ahead to cryptocurrencies as a trading commodity, KrAsia reported on 14 February. The government is expected to follow the decision with new legislation for currency exchanges, tax payments and other crypto-related issues, according to Cointelegraph. However, Indonesia continues to prohibit the use of cryptocurrencies as a means of payment.
Senate vote pushes Italy closer to blockchain regulation
Italy’s Senate recently agreed on blockchain-related legislation in a move to push forward the nation’s stance on use of the technology. “The news marks Italy’s first regulatory move in the blockchain space and has been interpreted by local media as a step towards a broader system of rules for the nascent industry,” Cryptovest reported in late January. It noted that in September, Italy became the 27th country to sign a declaration creating a European Blockchain Partnership.
South African Reserve Bank weighs ‘limited regulations’ for cryptocurrencies
The South African Reserve Bank (SARB) recently wrapped up a public comment period on a consultation paper proposing “limited regulations” for cryptocurrency services in the country, MyBroadband reported. “The SARB stated that its proposals are aimed at monitoring the buying and selling of cryptocurrency,” the site noted. “However, the proposals stopped short of requiring that cryptocurrency services apply for licences like banks are required to.”