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Over 40 new countries got into crypto in 2023 – Inside look

The cryptocurrency industry has witnessed a significant shift in 2023, with a remarkable 42 new countries entering the sphere. This dynamic change, as highlighted in a recent PriceWaterhouseCoopers report, underscores a global shift towards embracing and regulating digital currencies.

Global Crypto Adoption: A New Wave

The PwC report paints a vivid picture of the rapidly expanding global crypto ecosystem. Forty-two countries have stepped into the industry, each taking diverse approaches towards regulation and legislation. The move is not just about adoption; it’s a stride towards creating comprehensive frameworks that address various aspects of digital currency usage, from stablecoins to cross-border compliance. This surge of interest from countries worldwide signifies a pivotal moment in the global acceptance and understanding of cryptocurrencies.

Among the standout regions, the European Union, Japan, and the Bahamas have got into all focus areas of crypto regulation. In stark contrast, nations like Uganda, India, and Brazil have taken a more selective approach, indicating a cautious stance towards the burgeoning industry.

Regulatory Focus: A Varied Approach From Top Countries

In the United States, the approach towards cryptocurrency regulation has been multifaceted, involving both state and federal levels. The regulatory landscape is characterized by a dual banking system, with significant steps taken to address digital asset activities through existing legal frameworks.

The focus has been on leveraging the non-depository trust vehicle and payments scheme to regulate digital assets. Notably, U.S. Dollar-backed stablecoins have drawn attention due to their growing systemic importance, prompting Congress and the White House to issue guidance and engage more actively in policy formation.

In the United Kingdom, the government’s proactive stance is evident in the recent empowerment of HM Treasury to classify cryptoassets as regulated financial instruments. The Financial Services and Markets Bill 2022 is set to integrate stablecoins into the financial services legislation, aligning cryptoassets with traditional financial assets. This move is part of the UK’s broader objective to position itself as a global hub for cryptoasset technology and investment.

Australia’s approach to digital assets highlights a commitment to creating a regulatory environment conducive to innovation while maintaining a focus on consumer protection and market integrity. The Australian Government’s recent initiatives include exploring the viability of a central bank digital currency (CBDC), reviewing innovative organizational structures, and considering custody obligations for third-party custodians of crypto assets.

Germany’s proactive regulatory efforts in the digital finance sector are noteworthy. The German legislator and the Federal Financial Supervisory Authority (BaFin) have effectively integrated crypto assets into the existing regulatory framework, accommodating various types of tokens and business models. This integration includes amendments to regulated activity permissions and the introduction of new licensing requirements, ensuring a balanced approach to innovation, consumer protection, and market stability.

In contrast to these proactive approaches, some countries like Hungary and Denmark have adopted a more cautious stance. Hungary is currently in the process of creating a legislative package in anticipation of the EU’s Markets in Crypto-Assets (MiCA) regulation, with a focus on blockchain technology’s economic utilization. Denmark, maintaining a technology-neutral perspective, has yet to introduce specific regulations for digital assets, indicating a wait-and-see approach pending EU directives.

Canada’s stance on digital finance and crypto assets is characterized by a welcoming attitude towards innovation, provided appropriate safeguards are maintained. The Canadian Securities Administrators’ Regulatory Sandbox allows fintech businesses, including those dealing with crypto products, to operate in a controlled environment. This approach not only encourages innovation but also ensures investor and consumer protection. Canada’s growing number of crypto exchange traded funds (ETFs) reflects its regulatory adaptability, positioning itself as a key player in the crypto market.

In the Asian financial hub of Hong Kong, there’s a concerted effort to establish a robust and harmonized regulatory framework for virtual assets. The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) are expanding regulations to cover the entire virtual asset ecosystem. Recent policy statements indicate a possible shift towards opening retail access to virtual asset exchange operators, suggesting a gradual yet significant change in the region’s crypto regulatory landscape.

Mauritius, representing the Eastern and Southern African region, has taken significant strides in the crypto industry by enacting comprehensive legislation on virtual assets and initial token offerings. The Virtual Asset and Initial Token Offerings Act 2021 establishes a clear regulatory framework under the oversight of the Financial Services Commission (FSC). This legislation underscores Mauritius’s commitment to developing a well-regulated digital asset sector, thereby attracting global crypto businesses and investors.

A Global Shift in Perspective

The spectrum of regulatory attention is as varied as the countries themselves. The Financial Action Task Force’s travel rule emerged as the most common area of focus, with 40 out of 42 countries engaging in discussions on this aspect. Conversely, guidelines for stablecoin issuance appeared to be a lesser priority among these nations.

India, Brazil, Turkey, the UAE, and Taiwan are some of the countries that did not explore stablecoin legislation in 2023. Interestingly, Turkey remained unique in its approach, making no substantial progress in any form of crypto-related initiatives at a national level.

The increased involvement of countries in cryptocurrency regulation marks a notable shift in the global financial landscape. This movement isn’t just about embracing a new form of currency but also about recognizing the potential impact of digital assets on the global economy. Each country’s unique approach to crypto regulation reflects its economic priorities, risk appetite, and technological readiness.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Jai Hamid

Jai Hamid is a passionate writer with a keen interest in blockchain technology, the global economy, and literature. She dedicates most of her time to exploring the transformative potential of crypto and the dynamics of worldwide economic trends.

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