ECB wants tougher rules on staking and lending
The lull in the crypto market has also hit the DeFi space. The lending service Celsius therefore already paused all payment services on June 13. The reason: liquidity problems. Crypto-skeptical ECB President Christine Lagarde deduced from this last week the need to tighten supervision of the staking and lending sector in the EU.
”These unexplored areas pose a risk to consumers, as the lack of regulation often conceals fraud, completely false value statements and very often speculation and criminal transactions,” Lagarde said at a hearing before the EU Parliament. EU institutions are currently debating the planned crypto regulation Markets in Crypto Assets (MiCA). It is scheduled to enter into force in 2024. Lagarde suggested that staking and lending should be considered in a follow-up regulation.
UK: No reporting requirement for “unhosted wallets”
Another core pillar of the current crypto controversy in the EU is the demand for a strict reporting obligation for “unhosted wallets”. The controversial regulation would be tantamount to a ban on such wallets. However, these form the backbone of the DeFi-Space, the federal government recently expressed criticism of this regulatory proposal. In the meantime, the UK has been going its own way with the regulation of Bitcoin and co. since Brexit.
A report by the British Ministry of Finance and Economics now states: crypto service providers do not have to collect transaction data on “unhosted wallets”. Behind their use, the report recognizes “potential security benefits.“ Accordingly, there would be no evidence “that unhosted wallets pose a disproportionately high risk of being used for illegal financial transactions.” The benevolent settlement is part of the UK’s strategy to become an innovation hotspot for the crypto industry.
Russia Plans Blockchain System as a SWIFT Alternative
The West responded to Russia’s incursion into Ukraine with severe sanctions. The majority of Russian banks have since been excluded from the SWIFT international payment system. In these times, the Russian financial sphere is turning to blockchain technology. According to a press release, the state-owned company Rostec has already achieved a breakthrough with the blockchain platform CELLS at the beginning of June.
At the forefront of this blockchain ecosystem, which combines several software solutions, is the processing of payments in various national fiat currencies. Rostec speaks of a “real alternative to SWIFT.” The system guarantees the speed, security and irreversibility of transactions.” 100,000 transactions per second should be possible. The ecosystem should be open to both companies and banks as well as state authorities. Parallel to these technological advances into the blockchain world, Russia is working under high pressure on a regulatory framework for the Bitcoin space and the mining of cryptocurrencies.
Germany has New Rules for Crypto Fund shares
Since June 18, German investment funds have been able to issue their share certificates on the blockchain. This is made possible by a new regulation for crypto fund shares (KryptoFAV). The law defines these shares as “electronic share certificates that are entered in a crypto securities register”. The industry reacted favorably to the flexible regulatory solution, which makes it possible to issue special funds both in full and only partially as crypto fund shares.
Also in the management of the crypto securities register, the federal government moved away from its idea of leaving the management of the register only to depositories (custodian banks). This also opens up the field for companies from the FinTech industry who have received a license from BaFin to maintain such registers. The only thing that remains controversial is that it is up to the depositaries themselves to pass on this task.
SEC Approves Crypto Short ETF
Meanwhile, on the other side of the Atlantic, a well-known regulatory thriller went into the next round. In the lead role: the US Securities and Exchange Commission SEC. The approval behavior for crypto ETFs of the authority under Gary Gensler has been met with fierce criticism in crypto circles for a long time. Because while Bitcoin Future ETFs have been traded on US stock exchanges for quite some time, the SEC refused to bless any spot ETF for a long time.
This will not change in the foreseeable future. Meanwhile, however, the SEC granted trading permission to a Bitcoin Short ETF. With the financial product from Proshares, investors can benefit from declines in the BTC price. The ETF is available for trading on the New York Stock Exchange NYSE under the symbol BITI.
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