[Chronique de Gérard Bérubé] Slow crypto regulation

The march of regulation in a universe moving from crash to crash is quite slow. In the US, we are still defining cryptocurrency.

The cryptosphere is experiencing one of the worst corrections in its young history this year. In addition to the large losses suffered by investors, the shocks are more systemic and are felt throughout the chain leading to upstream mining.

Above all, the crash once again highlighted the fragility and shortcomings of an ecosystem exposed to all risks. This makes regulation more than necessary, a framework that will especially help to create confidence in the industry and attract more institutional investors.

Moreover, the crypto universe rejoiced this week to see giant BlackRock ignore its initial resistance to open the way for cryptocurrencies to its institutional clients, starting with bitcoin. The world’s largest investment management firm, with $10 trillion in assets under management, has connected its technology platform Aladdin to the Coinbase exchange.

Aladdin’s network has around 55,000 investment professionals who claim assets under management of $21.6 trillion, or 4% of global assets, writes GlobalBlock Digital Asset Trading.

After long associating digital currency with fraud and money laundering, BlackRock now understands that its institutional clients are increasingly interested in exposure to the digital asset market and are emphasizing ways to effectively manage the operational lifecycle of these assets, continues GlobalBlock. The digital asset brokerage specialist also cites the findings of an EY report indicating that nearly a quarter of fund managers plan to increase their exposure to crypto assets over the next two years.

Small adjustment steps

But time is still baby steps on the regulatory scene in the US, much to the dismay of law enforcement. It is only recently that issues related to the cryptosphere have received the full attention of the US Congress. Digital currency advocates cheered Wednesday’s introduction of a bipartisan bill proposed by leaders of the Senate Agriculture Committee.

The latter, which oversees the Commodity Futures Trading Commission (CFTC), wants to give the CFTC “exclusive jurisdiction” over cryptocurrency transactions in accordance with the Commodities Act.

If adopted, digital currency would be defined as a “digital commodity” rather than a security. The CFTC, rather than the Securities and Exchange Commission, will also be given responsibility for monitoring transactions and forcing registration of digital commodity platforms. And this at the greatest desire of an industry considering that the CFTC is
more favorable.

Here we are south of the border, 13 years and three major crashes later, after a dozen frauds and Ponzi schemes and hundreds of billions of dollars have disappeared, the Associated Press recalled.

Meanwhile, bitcoin traded below US$23,000 on Friday, 67% below its November 2021 high. of dollars, is only the same at a third of its peak of 3000 billion established in November.

Regulation card

The Hello Safe product comparison platform has taken an interest in the legalization of cryptocurrencies in countries around the world. It offers a map with July 2022 as the latest update. We see that last July 99 countries (50.8%) allow the use of cryptocurrencies.

In Canada, transactions via cryptocurrencies are fully approved. The use of these currencies is legalized in the 27 countries of the EU. After Europe, America is the second continent with the most countries accepting cryptocurrencies, with 51.4% of them (18 countries). El Salvador and the Central African Republic are the only two countries in the world that have recognized bitcoin as an official currency.
sums up Hello Safe.

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