On 10 January 2020, the EU also implemented its Fifth Anti Money Laundering Directive (AMLD5), which requires crypto firms and exchanges to follow enhanced KYC programs and reporting obligations. Crypto regulation will move forward as part of the new European Commission’s mandate. The European Securities and Markets Authority has also announced it aims to focus on shaping a sound framework for crypto-assets.
The Banque de France has issued a call for applications to experiment with a Central bank digital currency for interbank settlements.
The crypto-assets and crypto-custody legislation forms part of a legislative package implementing the 5th European Anti-Money Laundering (AML) Directive into German law and entered into force on 1 January 2020. BaFin has issued various guidelines regarding - The statutory definition of crypto custody business - interpreting section 64y of the German banking act - applications for authorisation for crypto custody business - AML duties (in German only). The German Ministry of Finance and Ministry of Justice are currently working on a draft law enabling the issuance of digital bonds on a DLT infrastructure without the requirement of a certificate.
In January, Consob has published its final report on Initial offers and exchanges of crypto-assets
The Dutch Central bank has announced it will begin regulating organisations that offer crypto-related services starting January 10th 2020. Firms offering services for the exchange between cryptos and fiat currency, and crypto wallet providers are now required to register with the regulator to be authorised to operate. A licensing system should also be introduced for cryptocurrency services.
Switzerland is an early crypto-friendly state. FINMA, the Swiss market authority applies relevant provisions of financial market law regardless of the underlying technology. Additionally, FINMA has issued guidance on several crypto topics such as initial coin offerings, stablecoins and payments. Home to the “Crypto Valley”, it is worth noting that the state is home to several high profile projects such as Ethereum, Dfinity and Libra. Switzerland’s stock exchange is also building the SIX Digital Exchange, a fully integrated trading, settlement and custody infrastructure for crypto-assets which aims to provide a safe environment for the issuance and trading of crypto-assets.
The Bank of England (BoE) has published a discussion paper to assess the risks and benefits of a Central bank digital currency.
The Crypto-Currency Act of 2020, an omnibus bill aimed at comprehensive reform of U.S. cryptocurrency regulation was introduced 9 March. The bill looks to choreograph a wide range of digital assets to answer to the appropriate regulator. The proposal divides digital assets into three categories: crypto-commodity, crypto-currency and crypto-security. Respectively, the three categories would be governed by the Commodity Futures Trading Commission (CFTC), the Secretary of the Treasury via the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchange Commission (SEC).
Japan amends its crypto asset regulation with a focus on derivative transactions generally enforceable from May 1, 2020. Crypto-assets qualifying as securities will also be subject to new requirements while crypto custody will be subject to licensing. Crypto trading activities will also have to fulfil new rules regarding unfair trading and practices.
In January 2020, the Reserve Bank of India underlined it did not ban cryptocurrencies such as bitcoin, but only ring-fenced regulated entities like banks from risks associated with crypto-assets trading. The future of the Indian crypto ecosystem remains as such unclear.