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International developments in cryptocurrencies - May 2018
There have been many developments around the world in relation to digital currencies, as outlined below. While not discussed in this update, ASIC has also updated its guidance in relation to initial coin offerings (ICOs) and cryptocurrency. This has been detailed here.
- United States (US): The US Securities and Exchange Commission has launched a mock ICO, complete with a functional website, to educate investors on the trademarks of a fraudulent ICO. The US Commodity Futures Trading Commission (CFTC) has also released a joint staff advisory to assist exchanges and clearing houses wishing to list virtual currency-related derivative products. The advisory clarifies the expectations of the CTFC in its review of digital currency-related derivative products that a derivatives clearing organisation may wish to list.
- Singapore: The Monetary Authority of Singapore (MAS) has opened consultation on a three-tier market operator system to facilitate the growth in new business models based on emerging technologies, such as blockchain. MAS currently supervises a two-tier system of approved exchanges and recognised market operators. Consultation closes 22 June 2018.
MAS has also cautioned eight digital token exchanges against trading virtual currencies that may be securities or future contracts requiring authorisation by MAS. MAS has indicated that it will take “firm action” against any breaches of securities law in relation to digital currency.
- United Kingdom (UK): The UK’s Cryptoassets Taskforce held its inaugural meeting, discussing the impact of cryptoassets and distributed ledger technology, and what the required regulatory response is. The Taskforce will consider existing analysis undertaken by the government and regulators as well as consult with industry and academics. It is expected that the Taskforce will publish a report in the third quarter of 2018.
- Norway: A working group from Norway’s central bank has released a report assessing whether the bank should issue its own digital currency (CBDC). The report suggested three possible purposes for a CBDC that required further investigation, being to ensure a public and credit risk-free alternative to bank deposits alongside cash, to function as an independent back-up solution for electronic payment systems, and as legal tender supplementing cash. The working group noted that further long-term analysis is required.
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