Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
Regulatory Rewind #009 - Apr 2, '25
Recorded: April 2, 2025 Duration: 0:33:39Space Recording
Short Summary
Recent developments in the crypto space include regulatory advancements such as Switzerland's first DLT trading facility, the European Central Bank's stablecoin initiative, and South Africa's enforcement of the travel rule. The US shows a policy shift with eased crypto restrictions for banks, while El Salvador and Paraguay enhance cooperation on crypto regulation. The UK faces a slowdown in adoption due to stringent regulations.
Full Transcription
so Thank you. so so I'm going to go ahead and get some more of the details. so Thank you. Thank you. I'm going to go ahead and put it in the middle of the room. Let's go. We'll be right back. Oh, baby. Oh, baby. Oh, baby. Oh, baby. Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby.
Oh, baby. Oh, baby. Oh, baby. Oh, baby. Oh, baby. Oh, yeah. Baby, tell me the shit.
Oh, yeah.
Oh, yeah.
Oh, yeah.
Oh, yeah. Hello, hello everyone. Welcome to Regulatory Rewind. This is our ninth edition of Regulatory Rewind, where the Parity Technologies Legal Team
takes you for a quick canter around the world to keep you up to date on the regulatory thinking,
the regulatory rethinks, and just general regulatory view of the industry that we are all involved in. So as ever, when
lawyers are sharing their views, we like to remind everyone that we might be lawyers generally,
but we are not your lawyers. And so this cannot be seen as legal advice or investment advice.
This cannot be seen as legal advice or investment advice.
And I'm sure you all know that story, but it's worth repeating.
And today is a day I think many people will be very focused on what's going on in the world,
not just in crypto, blockchain or tech.
It is a day where we expect the U.S. to announce tariffs.
And it's in some circles, it's being called Liberation Day.
So it may be a day that we look back on as one to remember where things that might not be possible in the past are now possible for the future.
And that can be both good and bad we shall see
but we want to focus on Europe first and take you through what's happened in the
last week and I would like to ask Gustav to share his views on what's
happened hello thank you Chrissy I want to start with Switzerland where
FINMA has granted a license to BX Digital AG, making it the first DLT trading
facility in Switzerland under the DLT Act and governed by Financial Market
Infrastructure Act. The BX Digital AG is part of the Börse Stuttgart Group and facilitates multilateral trading
of DLT securities but no custody services.
And it's granted that license according to a DLT Act that's effective since August 2021
that aims to support innovation while also maintaining the market stable.
So this is an interesting development in Switzerland and with that we go over to EU where
institutional adoption according to Cointelegraph remains rather slow in contrast to the United States where we already talked
about the Bitcoin reserves. It seems that even after Trump's effective order to
keep cryptocurrency as a federal Bitcoin reserve, European companies have largely
stayed silent and it seems that the complex regulatory environment on the one side and the lack of clear stance on Bitcoin as a reserve asset contribute to some hesitation in that field.
A speaker of Bitpanda says that European financial institutions may be underestimating crypto investor demand by as much as 30%.
So that seems to be quite a mismatch. On the other hand, the European finance ministers
have concerns about the US policy shift under Trump to embrace cryptocurrencies as it could undermine the Eurozone's monetary sovereignty and financial stability.
As we have talked about quite a bit, Trump's executive order talks about a strategic reserve for cryptocurrencies.
We also know that strategic in this context means that they basically just
want to keep cryptocurrencies that the US government acquired out of legal
problems that people had and it does not mean that they are going to buy off
crypto coins on the market but still they are with that strategic reserve having a mind shift
that is important to notice.
While the European Central Bank is basically working on central bank money since 2020,
they started that when Facebook wanted to launch the Libra and did not do it in the end but
that was the the first move towards a European bank central bank backed
stablecoin and that is interesting because with with that stablecoin they
want to pose the euro as an as an important asset and just transform it into
a digital asset while the Americans are taking that other route, not having a central bank
backed coin, but instead really go into crypto as such.
And Gustav, I think there's some interesting development this week also in the insurance
space in the EU. And I think maybe that conservative attitude towards digital assets
is reflected in some of those decisions as well. Did you want to tell us a little bit about insurance? Insurance in so far as the stability
of stablecoins is in Europe very much densely connected to pools of money in the background
or real assets that would assure that the value of the stablecoin is connected to something that is seen as real money in the traditional world.
And that is different from the US where they don't have these backed stablecoins
and they just have private initiatives that are basically lacking regulation, I would say, from a European perspective.
I would say from a European perspective. So there's a lot more values created out of nothing,
very crypto attitude on the one side and in Europe it's a much more conservative approach
that's also connected to the real money banks that people might have. And probably that also affects the monetary markets as such.
So the traditional markets of currencies like euro and US dollar
and other currencies we've seen last time that, for example,
Israel is also working on a state-backed stable coin
in order to be present with currencies in the digital market.
I think it's interesting because even with banks, it's not always required that there's a one-to-one
backing, right? Even in a traditional insurance market, which we might all experience with cars
or homes or whatever it may be, again, a one-to-one requirement is very
conservative. And I think it is also consistent not only with the EU, but some other approaches
that we see countries taking around the world, with the US potentially being a notable exception.
potentially being a notable exception. Yes, definitely. So comparing and contrasting some
different ways of looking at the same issues. And again, not necessarily a right or a wrong way,
just different ways. Right. So we're going to move on now. Gustav, thank you. Jamil,
you're going to tell us a little bit about the UK, I believe. And of course,
last week, our story was about some more conservative traditional statements that were
emanating from the regulators here in the UK. But I think you're going to take us through a few more
things. Over to you. Thank you, Chrissie. Hello, everyone. So over in the UK, it's quite notable that globally there is growing institutional adoption of Bitcoin.
And it's seen that the UK is lagging in this sector. That's according to a recent Forbes article.
And this article notes that major US institutions, including university endowments like University of Austin and Emory University,
university endowments like the University of Austin and Emory University, they're significantly
increasing their cryptocurrency investments and that's seen to be driven by President Trump's
ambition to position the US as a Bitcoin superpower. The situation is in stark contrast to the UK.
So the UK is experiencing a slowdown in crypto adoption. There are regulatory challenges in the UK,
such as stringent measures being implemented
by the Financial Conduct Authority, the FCA,
and that's led to an exodus of crypto-related businesses
in the UK and hindered the country's vision
of becoming a crypto hub.
Sticking with the FCA,
their classification of cryptocurrencies
as restricted mass market investments has imposed limitations on retail investors contributing to the UK's diminished
stance in the global crypto market.
So it's quite clear to see quite a proactive approach of institutions over in the US.
And that's set against the backdrop of a cautious regulatory environment over in the UK, which is quite difficult for those trying to do business here in the industry.
I mentioned the FCA a couple of times there.
Chrissy, you mentioned the FCA last week in terms of an article by the head of the FCA
or statement by the head of the FCA, sorry,
questioning why so many young
people were turning to crypto. So I think it's quite interesting that thinking like that in
the UK from people like the FCA head, as well as, you know, the more stringent measures implemented
by the FCA itself, they're not helping the UK environment, are they, Chrissy?
What do you think is the kind of reasoning for that thinking?
And is it a lack of familiarity with the space?
Is it a lack of understanding of how the technology works?
Is it perhaps a lack of education even
from some of these heads of these agencies
and some politicians as well?
What do you think it might be, Chrissy?
I think it's a combination of factors, actually. I think one, diversification of investments and how you spend your money and invest your money is always important.
So I agree with everyone who says you shouldn't just invest everything in crypto.
with everyone who says you shouldn't just invest everything in crypto. It should be in other things
like property or shares or bonds or your family business or whatever, if you're privileged enough
to have those options that you're able to invest in. But it should be included in the list of investments that people are comfortable with.
And it's a focus on innovation and the digital world that's being built.
And I think that's absolutely essential, especially for younger generations,
because they are very, very digitally focused.
And I think you see that in how they interact with the world generally. And that is
only going to increase. I think there is an onus on legislators and people who, dare I say it,
are Gen Xers such as myself to not be intimidated by the tech, to not view it as opaque, but instead make an effort to understand innovation, whether it's
blockchain or AI or quantum or whatever it may be, however they define it. And I think what we need
to do is to reach out our hands and say, all right, let's make this accessible to you and put it into terminology that everyone can understand and not just those who understand all the acronyms that are used in within the industry.
And I think we also have to be mindful that not everybody has that same level of comfort.
like with the Polkadot Blockchain Academy, where we are introducing as of next week,
our blockchain certification through our Polkadot Blockchain Academy.
And it's going to be aimed at policymakers from around the world, actually.
We had hoped to be focused on just the UK initially, but actually we've received so much interest from around the globe,
from APAC to South America to Europe to everything
in between and so we are starting that next week and we will report back on that but education is
essential to me so I think yeah I mentioned APAC and we have some news from that region that we should go through.
That's over to Gustav.
Yes. In Japan we had interesting news on March 30th coming from Nikkei
who reported that the financial regulator was planning to submit a bill to Parliament
to revise Financial Instruments and Exchange Act as early as next year,
having considered the changes through internal study groups.
Interestingly enough, the Japanese Financial Services Agency stated that they did not decide on any specific politics
and also didn't decide whether or not they want to revise the Financial Instruments and Exchange Act
or whether to classify crypto as financial instruments.
So who knows if there are more news coming up soon or if this was just a mistake.
But it's interesting that they are also potentially going through study groups
and learning more about what financial products could be so let's let's stay
posted on this with that over to Jamil to Central and South America
Thank You Gustav so in Central and South, we have President Naive Bukele's
tour of the US. So the El Salvador president embarked on a tour across several US cities,
including Washington DC, New York and LA. And the main objectives of his visit were to
strengthen diplomatic ties, attract investments and promote El Salvador's Bitcoin initiatives.
He met with US officials, business leaders and members of the Salvadoran diaspora in the States
and he emphasized the potential of Bitcoin to drive financial inclusion and economic growth in El Salvador.
Sticking with this story, in terms of Panama's cryptocurrency legislation, lawmakers
introduced a new cryptocurrency bill aimed at establishing a comprehensive regulatory framework
for digital assets. And this proposed legislation seeks to recognize cryptocurrencies as a means of
payment and facilitate their integration into the country's financial system. And if this bill is passed, it would position Panama as more crypto friendly jurisdiction
and potentially attract blockchain based businesses as well as fostering innovation in the sector.
So I think this as well as the next story kind of underscore the growing influence of cryptocurrency
in Latin America with the countries there taking quite
quite proactive steps to integrate digital assets into their economies. I want to kind of
highlight that against what I just discussed with the UK and some of the challenges we're facing.
Moving on to the next story, El Salvador and Paraguay have joined forces in crypto regulation. They've signed an MOU, which is a memorandum
of understanding, to enhance cooperation on cryptocurrency
regulation. The agreement aims to strengthen oversight of
digital asset service providers with a focus on detecting
unlicensed operations and combating financial crimes such as money laundering.
And the MOU facilitates collaboration between two agencies in these countries.
So in El Salvador, the National Digit Asset Commission,
and in Paraguay, the Secretariat for the Prevention of Money Laundering.
That's the two agencies that will be collaborating and sharing information
and best practices to develop robust regulatory frameworks for the crypto sector.
This is not the first time El Salvador has done something like this in terms of collaboration with a local neighbour.
The country had an arrangement in Argentina with the National Securities Commission in December,
and it reflects a broader trend of Latin
American countries seeking to establish standardized cryptocurrency regulations to address both the
opportunities and risks associated with digital assets. So maybe we'll see something quite
substantial in terms of a more standardized approach within Central and Latin America.
In Paraguay the central bank over there recently clarified that cryptocurrencies
are not officially registered or authorized within the country.
And they advise citizens to exercise caution with unregulated platforms.
So overall in the region, I think there is a drive towards having a more transparent
a drive towards having a more transparent and secure crypto environment.
and secure crypto environment.
Now, moving on to the next region, the Middle Eastern Africa.
In South Africa, there has been a set of travel rules that just went live on the 30th of March.
The nation of South Africa is set to enforce the Financial Action Task Force's travel rule
for crypto asset service providers starting on April the 30th.
So from a licensing and registration perspective, these crypto asset service providers, abbreviated
as CASPS, they must obtain a financial service provider license from the Financial Sector
Conduct Authority in South Africa and register as accountable institutions with the Financial
Intelligence Centre in South Africa. CASPs are required to implement the travel rule which
band-aids the collection sharing of specific information during crypto asset transfers with
the aim of enhancing transparency and combating financial
crimes. There's a grace period until the 30th of April, allowing CASPS time to align their
operations with these new regulatory requirements. So the aim with these measures is to integrate
South Africa's crypto regulations with international standards, ensuring a more secure and transparent
digital asset environment.
I think I mentioned this link back to previous weeks when I mentioned this last week about
the need for KYC and AML and similar things to continue and that really not going away
anytime soon.
I think that's something Chrissy's mentioned as well a few times.
So yet another example of that.
And with that, over to Chrissy on the US.
Chrissy.
Thanks, Jamil.
Thanks, Gustav.
So we started off today's Regulatory Rewind talking about two different ways to view similar issues.
And I wanted to continue that discussion in the context of what's happening on the ground in the U.S. in particular states. So we start off with the fact
that California has introduced a Bitcoin rights concept into a money transmission bill. So that sounds a little bit boring. I can bring that to
life for you. It's actually California's Assembly Bill 1052, and it's about money transmissions.
But what's been added in is the concept of digital assets and the fact that these digital assets, including Bitcoin, can be used in
private transactions, that people have the right to use them, and that California wants to promote
that. So that's been introduced by lawmakers. And I think that focus on innovation is important to note in a state like California, and also
contrast that with a state like Florida. And anyone following the political discourse in
the US will know that California and Florida don't always see eye to eye on all issues,
but certainly the concept of innovation and digital assets is a unifying force, I think.
And you'll see that in some late breaking news that just happened yesterday because there were
some officials elected from Florida for Congress, Florida's first and sixth congressional districts.
Congress, Florida's first and sixth congressional districts.
The PAC, Fair Shake, which is representing the entirety of the crypto industry, actually
their candidates that they backed for those congressional races won.
And there were a number of messages from both candidates and also from Floridians generally
saying that they want crypto innovation. They want to see digital assets included. And so again,
even though we don't always see those states taking the same approach to all issues, certainly on the topic of innovation and
digital assets. They are. And it's also interesting to note that on the campaign trail, President
Trump promised a digital bill of rights. And that has not come forward yet from the White House.
has not come forward yet from the White House. And California actually has gotten ahead of that
promise and introduced their own. So again, this emphasis on innovation. And I think that is,
again, contrasting that with some of our news earlier in this regulatory rewind about a more conservative viewpoint that you could say is
coming from the EU and also the UK and perhaps other jurisdictions around the world. So another
federal level newsworthy item to just make you aware of from the U.S. is that the FDIC and the CFTC have eased
crypto restrictions for banks. So basically, the FDIC said, and that's the Federal Deposit
Insurance Corporation, said that institutions, including banks, can now engage in any crypto related
activities without prior approval. That's something new. And the CFTC announced that
any digital asset derivatives would be treated exactly the same as any other derivatives.
So actions and words aligning in various ways. So with that, we'll go to our last
news story, which is a continuation of last week's story. And that is regarding some of the statements
again that have been made in the UK about a concern about young people investing in crypto and that not being
balanced by traditional assets. And in the last week, there have actually been six industry bodies
in the UK who have written a letter to Virujhundra, who is the Prime Minister's Special Advisor to Business and Investments, asking for a special
crypto for the UK in order to jumpstart this area of the economy and pointing out that there is a
number of missed opportunities if that does not happen. So very happy to see the industry's response
going straight to the government
and also this being a very lively discourse
in the place that I call home
and also a lively discourse
in my home country of the United States as well.
So, and it's the the conversation will continue globally,
as you see, and this is why we can come to you every week
with Regulatory Rewind, sometimes Regulatory Rethink.
And we hope that we have more to discuss next week.
And perhaps we will be talking about tariffs and the geopolitical
situation. We'd love to get your questions that you have in advance of the next regulatory rewind.
If you would like us to focus on certain topics, you can get in touch with any of us directly.
You can put your questions in the chat now but we look forward to
seeing you next time thank you everyone everyone Thank you. I'm going to go ahead and get some more of the details. Thank you. Bye.
