• Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA
Wednesday, August 17, 2022
Online Crypto College
Advertisement
  • Home
  • Live Crypto Prices
  • Crypto News
    • Bitcoin
    • Altcoin
  • Blockchain
  • Regulation
  • Trading
  • Learn Crypto
    • Free Crypto Training
    • iCoinPro Crypto Trading
No Result
View All Result
  • Home
  • Live Crypto Prices
  • Crypto News
    • Bitcoin
    • Altcoin
  • Blockchain
  • Regulation
  • Trading
  • Learn Crypto
    • Free Crypto Training
    • iCoinPro Crypto Trading
No Result
View All Result
Online Crypto College
No Result
View All Result

Cryptos under pressure as regulators circle | Thomson Reuters Regulatory Intelligence and Compliance Learning

June 6, 2022
in Regulation
Reading Time: 4 mins read
A A
ShareShareShareShareShare

Related articles

CFTC Commissioner Kristin Johnson on Future of Crypto Regulation

August 17, 2022

Do Kwon hires lawyer in preparation for defense in South Korea

August 17, 2022

Following recent turmoil, a host of regulatory bodies and policymakers have called for stricter supervision of the crypto sector to protect investors and ensure financial stability

The spillover from crypto markets to traditional financial markets remains limited, but there is an urgent need for the “swift development and implementation” of consistent and comprehensive regulation for crypto-asset issuers and service providers, with a view to holding crypto-assets, including stablecoins, to the same standards as the rest of the financial system, the G7 group announced in its latest communication recently.

Meanwhile, the Bank for International Settlements (BIS) argued in a paper that the crypto sector was increasingly used for speculation by unsophisticated retail investors and that the lack of crypto adoption by traditional banks had caused the growth of a “shadow crypto-financial system” in which crypto-exchanges held a dominant, yet largely unregulated role.

“The flipside of limited adoption by banks is a dominant role for novel ‘crypto-exchanges’,” the paper stated. “Compared to existing regulated exchanges for ‘traditional’ financial assets, the regulatory and supervisory oversight of crypto-exchanges — encompassing consumer protection, market integrity, trading, disclosure, prudential, and addressing anti-money laundering, combatting the financing of terrorism — remains patchy at best.”

Retail investors did not generally buy into the libertarian ideas behind crypto-assets such as Bitcoin, and accepted that crypto-exchanges held their assets in custody, as opposed to on the blockchain, the paper argued. Large crypto-exchanges such as Binance and Coinbase do not write every transaction to the blockchain due to the cost and energy required, and instead operate an internal ledger of transactions on a traditional standardized program language-type database.

“Instead of relying on a trust-free — i.e., on-chain — environment, a new set of agents has come to the fore that is offering convenience, market access, transaction scale and liquidity to these markets in much the same manner as in commercial banking and securities trading, albeit without the same degree of regulatory and supervisory oversight,” the paper noted. “Crypto intermediaries… should be subject to the same types of regulation and oversight as intermediaries in economically equivalent asset classes. The purportedly decentralized nature of cryptocurrencies does not negate the need for these critical public policy functions.”

More data needed

To counter future risk to the broader financial system, the BIS paper proposed enhancing the collection and publication of cryptocurrency trading data in a more rigorous manner, such as through “embedded supervision”, which would gather information in distributed ledger-based finance and decentralized finance with the aim of improving the quality of data available to supervisors. “Data gaps risk undermining the ability of authorities to oversee and regulate cryptocurrencies holistically.”

Indeed, data gaps have also been singled out in the fight against money laundering, with regulators seeking to gather more information on the parties involved in crypto-transactions. A proposal recently raised in the European Parliament involved introducing the Financial Action Task Force’s (FATF) “travel rule” for crypto-transaction monitoring purposes, a move that was supported by the recent G7 statement.

Stablecoins in the mix

The G7 statement also called for stronger disclosure and regulatory reporting for reserve assets backing stablecoins such as Tether and the recently crashed TerraUSD. “The G7 remains committed to high regulatory standards for global stablecoins, following the principle of same activity, same risk, same regulation,” the G7 statement noted. “No global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards.”

The BIS paper also warned against the potential for stablecoins to pose a systemic threat to the broader financial system, saying risks in the “shadow” corners of the financial system could quickly find their way to regulated institutions. Left unaddressed, the evolving crypto landscape would see conventional and regulated intermediaries increasingly linked to an unregulated crypto financial system, the paper stated. As such, the fundamental policy choice was to either focus on a framework that allowed such interlinkages but enforce a more level playing field with regard to the regulation and supervision of financial services, or limit the level of interlinkage between the two systems.

“Separating both systems could prove challenging at a global level, making the former solution inevitable,” according to the paper. “Initiatives to promote regulatory clarity on the treatment of these potential exposures… could help to ensure a more level playing field and ensure the prudent management of risks from a micro-prudential and macro-prudential perspective. In practice, this would mean applying more stringent regulatory and supervisory oversight of crypto-exchanges with regard to the provision of financial services… while applying a conservative bank prudential regulatory treatment for cryptocurrency exposures.”

Meanwhile, Charles Randell, chair of the UK Financial Conduct Authority, said in a recent speech that the regulator was not ready to take over the supervision of the crypto sector in the UK, despite the UK government’s ambition to create a world-leading market for crypto-assets, citing the speculative and volatile nature of the market.

Separately, the European Central Bank (ECB) on said in its biannual financial stability review that exposure to crypto by banks and other financial institutions on a wide scale could put capital at risk and damage investor confidence, lending and financial markets. “Systemic risk increases in line with the level of interconnectedness between crypto-assets and the traditional financial sector,” the ECB stated, adding that highly leveraged trading offered by crypto-exchanges has seen investors borrow funds to buy greater exposure to crypto, also heightening financial stability risks.

Further, data shortcomings in the sector are also hindering the assessment of financial risks, the ECN noted, warning that publications by crypto-exchanges and data aggregators should be treated with caution.

Additional reporting by Francesco Canepa of Reuters.

[View source.]

Credit: Source link

ShareTweetSendPinShare
Previous Post

What’s the Crypto Regulation Endgame?

Next Post

Bitcoin narrowly dodges record 10 weeks in the red

Related Posts

CFTC Commissioner Kristin Johnson on Future of Crypto Regulation

August 17, 2022

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.The...

Do Kwon hires lawyer in preparation for defense in South Korea

August 17, 2022

Terra co-founder Do Kwon has hired a lawyer in preparation for his defense against South Korea’s legal actions, South Korea-based...

Security or Commodity? Crypto Would Just Like To Know

August 17, 2022

Editor’s note: Mergers & Money is a monthly column by Senior Reporter Chris Metinko that covers dealmaking and the flow...

Crypto.com eyes security via regulation as it secures UK FCA approval amid global compliance tour

August 17, 2022

Major crypto exchange Crypto.com secured approval from the U.K. Financial Conduct Authority (FCA) in its most recent addition to its...

Crypto.com gets UK regulatory approval

August 17, 2022

Representations of cryptocurrency Bitcoin are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/IllustrationRegister now for FREE unlimited access to...

Load More
Next Post

Bitcoin narrowly dodges record 10 weeks in the red

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Binance Announces Seizure Of Assets Linked To…

August 13, 2022

6 Best New Cryptocurrency Australia to Buy 2022

August 17, 2022

Bullish Sentiment Restores in Crypto Derivatives Markets, Surged to $3.12 Trillion in July

August 12, 2022

Uniswap, Maker Whales in full action; Is DeFi summer here?

August 12, 2022

Jump Crypto to Build New Validator Client for Solana

August 17, 2022

About Us

This is an online news portal that aims to provide the latest Crypto news, Altcoins, blockchain, regulations and much more stuff like that around the world. Feel free to get in touch with us!

What’s New Here!

  • CFTC Commissioner Kristin Johnson on Future of Crypto Regulation
  • Chainlink In Bearish Mood As LINK Price Retreats To $8.63
  • Are Shiba Inu burns reflecting on its price?

Newsletter

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2022 - OnlineCryptoCollege.com - All rights reserved!

No Result
View All Result
  • Home
  • Live Crypto Prices
  • Crypto News
    • Bitcoin
    • Altcoin
  • Blockchain
  • Regulation
  • Trading
  • Learn Crypto
    • Free Crypto Training
    • iCoinPro Crypto Trading

© 2018 JNews by Jegtheme.

  • bitcoinBitcoin(BTC)$23,426.00-1.78%
  • ethereumEthereum(ETH)$1,840.57-2.06%
  • tetherTether(USDT)$1.000.07%
  • usd-coinUSD Coin(USDC)$1.000.11%
  • binancecoinBNB(BNB)$307.51-2.18%
  • rippleXRP(XRP)$0.3755930.32%
  • cardanoCardano(ADA)$0.54-3.71%
  • Binance USDBinance USD(BUSD)$1.000.00%
  • SolanaSolana(SOL)$41.37-4.30%
  • dogecoinDogecoin(DOGE)$0.082496-2.82%
  • polkadotPolkadot(DOT)$8.44-3.93%
  • Shiba InuShiba Inu(SHIB)$0.000015-4.29%
  • Lido Staked EtherLido Staked Ether(STETH)$1,790.23-2.00%
  • AvalancheAvalanche(AVAX)$26.38-3.59%
  • daiDai(DAI)$1.000.10%
  • matic-networkPolygon(MATIC)$0.90-3.67%
  • tronTRON(TRX)$0.068910-1.26%
  • wrapped-bitcoinWrapped Bitcoin(WBTC)$23,437.00-1.54%
  • ethereum-classicEthereum Classic(ETC)$39.87-2.70%
  • OKBOKB(OKB)$20.76-2.02%
  • leo-tokenLEO Token(LEO)$5.353.87%
  • litecoinLitecoin(LTC)$60.46-0.83%
  • FTXFTX(FTT)$30.18-1.63%
  • NEAR ProtocolNEAR Protocol(NEAR)$5.08-4.35%
  • chainlinkChainlink(LINK)$8.14-4.21%
  • UniswapUniswap(UNI)$8.07-3.40%
  • CronosCronos(CRO)$0.144315-3.51%
  • cosmosCosmos Hub(ATOM)$11.37-1.06%
  • stellarStellar(XLM)$0.121053-0.69%
  • moneroMonero(XMR)$163.01-3.70%
  • FlowFlow(FLOW)$2.58-4.13%
  • bitcoin-cashBitcoin Cash(BCH)$134.42-1.64%
  • Aerarium FiAerarium Fi(AERA)$7.15-13.10%
  • algorandAlgorand(ALGO)$0.345240-3.03%
  • vechainVeChain(VET)$0.029730-3.77%
  • filecoinFilecoin(FIL)$8.19-3.99%
  • Internet ComputerInternet Computer(ICP)$7.46-4.27%
  • ApeCoinApeCoin(APE)$6.06-2.02%
  • ChainChain(XCN)$0.083855-0.50%
  • decentralandDecentraland(MANA)$0.98-5.34%
  • The SandboxThe Sandbox(SAND)$1.24-3.87%
  • tezosTezos(XTZ)$1.902.03%
  • HederaHedera(HBAR)$0.074941-3.05%
  • eosEOS(EOS)$1.5617.72%
  • Axie InfinityAxie Infinity(AXS)$17.17-5.09%
  • QuantQuant(QNT)$111.54-4.18%
  • AaveAave(AAVE)$104.95-2.67%
  • FraxFrax(FRAX)$1.000.29%
  • Lido DAOLido DAO(LDO)$2.52-2.02%
  • theta-tokenTheta Network(THETA)$1.41-4.17%