When it comes to cryptocurrency/blockchain regulation, considerable attention has been focused, this past year, on the United States’ action (or inaction). But the U.S. is not the world, just one important player, and crypto, from its beginnings, has been a global enterprise.
Perhaps, then, it makes sense to step back and ask: What is going on with crypto regulation when viewed through a global lens?
For instance, how do geographic regions such as Europe, Asia and North America compare in terms of crypto legislation, rules and enforcement? Is there any single country or jurisdiction that could serve as an exemplar for regulation? How is the developing world dealing with all this variation? And finally, are there reasons to be hopeful about the way regulatory trends are now unfolding?
If one focuses solely on the negative — the tide of crypto-related collapses, bankruptcies and enforcement actions in the United States this past year — a skewed picture can emerge. Progress in places like Europe might be overlooked, like the European Union’s recent adoption of its Markets in Crypto-Assets (MiCA) regulatory framework.
“Through MiCA, the European Union has been a global model by offering the much needed regulatory clarity that crypto businesses of varying sizes and business models would need,” Caroline Malcolm, vice president of global Policy at Chainalysis, told Cointelegraph, adding:
“Regulatory clarity and consistent implementation of rules will allow businesses to devise their operational program.”
Nor is Europe necessarily alone in pursuing a forward-looking path. “There is massive momentum on achieving regulatory clarity for digital assets across the world, whether that be in the U.S., Singapore, the UAE or others,” Malcolm said.
A fragmented world
Despite some promising trends, global crypto regulation — laws, rules, enforcement, taxation, etc. — remains a mixed bag.
“There’s a lot of fragmentation when it comes to regulation depending on the jurisdictions and geographical areas,” Bertrand Perez, CEO of the Web3 Foundation, told Cointelegraph in an interview earlier this week.
“In the U.S. we know, we know what’s happening or what is not happening over there,” continued Perez, who earlier served as chief operations officer at the Diem Association (formerly Libra, Facebook’s high-profile but ultimately failed stablecoin experiment).
Europe’s MiCA regulations, by comparison, focus on stablecoins. Indeed, MiCA is the EU’s “answer to the Libra project,” Perez said.
Significantly, the Europeans recognize that one can’t have a single regulatory framework for everything crypto, he added. MiCA is step one, “but then they’ve been slicing the use cases.” There will eventually be another regulatory framework for nonfungible tokens and another for metaverse-related use cases.
The EU doesn’t hold a monopoly on progressive thinking either. Switzerland, which is not an EU member, was the first country to develop a clear crypto framework back in 2018.
The Swiss regulatory scheme separates tokens into three categories: security (a.k.a. “asset”) tokens, utility tokens and payment tokens, and also provides a number of licensing schemes dependent on the project’s structure.
In the U.S., by comparison, the Securities and Exchange Commission appears to have categorized all digital tokens — with the possible exception of Bitcoin — as security tokens. But in Switzerland, according to Perez:
“If you are a utility token and or if you’re a security token, the rules of the road are completely different from the regulation perspective.”
The legal certainty that Switzerland has offered for several years now is the reason that so many crypto-related foundations and companies are based there and the reason so much Web3 innovation comes out of that country, he said. The Web3 Foundation, creator of the Polkadot protocol, is based in Zug, Switzerland.
Historically, Singapore followed Switzerland’s lead, and for a while, those two venues stood alone in terms of crypto rule-making clarity. “In 2019, when we announced Libra, there were those two choices, either Switzerland or Singapore, in terms of regulation,” Perez recalled. “The two countries were clearly leading the pack and having clear frameworks that were well defined.”
The evolving case of Japan
Today, there are more approaches. “In Asia as a geographical area, every country is having a different approach” to regulation, Perez continued.
However, Japan is one jurisdiction that is attracting more attention than the others. Japan was formerly the home of Mt. Gox, which was the subject of crypto’s first mega scandal. When that cryptocurrency exchange collapsed in 2014, it arguably made Japan crypto-wary. But if so, the island nation seems to be emerging from its isolation now — at least based on discussions Perez and others have held there recently.
“Japan is still a land of many innovations,” he reported. Indeed, at the WebX conference held in Tokyo in late July, Japanese Prime Minister Fumio Kishida announced, “Web3 is part of the new form of capitalism,” adding that it would be a vital element of Japan’s economic strategy, centered on growth, innovation, wealth distribution, digital transformation and the support of startups.
“The Prime Minister announced that basically he is welcoming Web3 to Japan, where a year ago or even a few months ago it wasn’t clear if they were supportive or not,” Perez told Cointelegraph. “Now it’s clear and the rules are going to be as business friendly as possible.”
Japan wanted to develop and implement clear and well-defined rules of the road for cryptocurrencies before it opened its gates again after Mt. Gox, Perez suggested, and they have those now. As he further noted:
“Japan’s crypto exchanges are the safest in the world now because the regulation is very strong. And now they are broadening their reach and welcoming broader [crypto] use cases.”
The most progressive G7 nation?
Elsewhere, China has been in the process of launching its digital yuan, becoming “the first country to have a central bank digital currency at scale,” according to Perez. Meanwhile, Dubai, the most populous city in the United Arab Emirates, is now “really pushing hard” in the crypto sphere “to attract not only capital but also skills from all around the world,” said Perez.
Asked to rank the largest Western countries in terms of regulatory crypto foresightedness, Perez put the European countries ahead of Japan, with the U.S. bringing up the rear. Within the EU, he would place his native France at the forefront, given that it is “the first European country to clearly implement the MiCA framework ahead of the law being enforced in the European Union.”
France has also done a good job at defining the rules of the road “in a way that is usable from a business perspective.” The U.K., no longer in the EU, is also “beginning to shift and see the value” in crypto and blockchain technology, he added.
Perez even detects “a different tone” among U.S. regulators and legislators; they now seem less likely to view the cryptoverse as a place inhabited chiefly by drug dealers and money launderers. He also observed that cryptocurrency reform is being spearheaded by legislators “on both sides of the aisles” within the most recent U.S. Congress.
What about low- and moderate-income countries — where do they stand with regard to crypto regulation?
“Most of those countries are basically waiting for the big players like the U.S., the European Union and Japan,” Perez said. They will watch to see which frameworks work best and can be adapted to their particular circumstances.
Which regulatory elements would he especially like to see duplicated globally? “If I had to recommend one framework, I would choose a combination of the Swiss token framework and parts of the EU’s stablecoin framework,” Perez answered.
These would offer some flexibility and encourage innovation. Within the EU framework, there is even room now for a token to be reclassified over time. A token might begin its “life” as a security token, but later evolve into a utility token. As the Web3 Foundation’s chief legal officer, Daniel Schoenberger, explained to Cointelegraph in May:
“A token can be used initially as a fundraising instrument. If a token is used for fundraising purposes, it should be subject to all applicable laws and regulations. However, over time that same token may serve a functional purpose devoid of speculative investment. This is part of the nature and innovation of blockchain technology.”
When asked whether he viewed the global regulatory glass as half empty or half full, Perez noted that this past year was generally a difficult one for the crypto sector amid scandals and bankruptcies like FTX and Celsius.
However, “I think we’ve passed through the worst,” Perez said. Some harsh criticism was heaped upon the industry, but that in turn may have led to “a bit more transparency” as well as reinforcing the need to build projects that last. Perez continued:
“So from that perspective, I’m very optimistic in terms of regulation. I’m also optimistic regarding U.S. policymakers. People are really starting to get it.”
The controversial assisted dying bill is still very much alive, having received a second reading in the House of Lords without a vote.
But that doesn’t tell the whole story. Day two of debate on the bill in the Lords was just as passionate and emotional as the first, a week earlier.
And now comes the hard part for supporters of Labour MP Kim Leadbeater’s Terminally Ill Adults (End of Life) Bill, as opponents attempt to make major changes in the months ahead.
The Lords’ chamber was again packed for the debate, which this time began at 10am and lasted nearly six hours. In all, during 13 hours of debate over two days, nearly 200 peers spoke.
According to one estimate, over both days of the debate only around 50 peers spoke in favour of the bill and considerably more than 100 against, with only a handful neutral.
The bill proposes allowing terminally ill adults in England and Wales with fewer than six months to live to apply for an assisted death. Scotland’s parliament has already passed a similar law.
Image: Pro-assisted dying campaigners outside parliament earlier this month. Pic: PA
In a safeguard introduced in the Commons, an application would have to be approved by two doctors and a panel featuring a social worker, senior lawyer and psychiatrist.
The bill’s sponsor in the Lords, Charlie Falconer, said while peers have “a job of work to do”, elected MPs in the Commons should have the final decision on the bill, not unelected peers.
One of the most contentious moments in the first day of debate last Friday was a powerful speech by former Tory prime minister Theresa May, who said the legislation was a “licence to kill” bill.
That claim prompted angry attacks on the former PM when the debate resumed from Labour peers, who said it had left them dismayed and caused distress to many terminally ill people.
The former PM, daughter of a church of England vicar, had claimed in her speech that the proposed law was an “assisted suicide bill” and “effectively says suicide is OK”.
But opening the second day’s debate, Baroness Thornton, a lay preacher and health minister in Tony Blair’s government, said: “People have written to me in the last week, very distressed.
“They say things such as: ‘We are not suicidal – we want to live – but we are dying, and we do not have the choice or ability to change that. Assisted dying is not suicide’.”
Throughout the criticism of her strong opposition to the bill, the former PM sat rooted to her seat, not reacting visibly but looking furious as her critics attacked her.
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3:06
Assisted Dying: Reflections at the end of life
There was opposition to the bill, too, from grandees of the Thatcher and Major cabinets. Lord Deben, formerly John Gummer and an ex-member of the Church of England synod, said the bill “empowers the state to kill”.
And Lord Chris Patten, former Tory chairman, Hong Kong governor and Oxford University chancellor, said it was an “unholy legislative mess” and could lead to death becoming the “default solution to perceived suffering”.
Day two of the debate also saw an unholy clash between Church of England bishops past and present, with former Archbishop of Canterbury George Carey claiming opponents led by Archbishop of York Stephen Cottrell were out of touch with public opinion.
While a large group of bishops sat in their full robes on their benches, Lord Carey suggested both the Church and the Lords would “risk our legitimacy by claiming that we know better than both the public” and the Commons.
“Do we really want to stand in the way of this bill?” he challenged peers. “It will pass, whether in this session or the next. It has commanding support from the British public and passed the elected House after an unprecedented period of scrutiny.”
But Archbishop Cottrell hit back, declaring he was confident he represented “views held by many, not just Christian leaders, but faith leaders across our nation in whom I’ve been in discussion and written to me”.
And he said the bill was wrong “because it ruptures relationships” and would “turbocharge” the agonising choices facing poor and vulnerable people.
Image: A campaigner in opposition of the bill. Pic: PA
One of the most powerful speeches came from former Tory MP Craig Mackinlay, awarded a peerage by Rishi Sunak after a dramatic Commons comeback after losing his arms and legs after a bout of sepsis.
He shocked peers by revealing that in Belgium, terminally ill children as young as nine had been euthanised. “I’m concerned we want to embed an option for death in the NHS when its modus operandi should be for life,” he said.
And appearing via video link, a self-confessed “severely disabled” Tory peer, Kevin Shinkwin, was listened to in a stunned silence as he said the legislation amounted to the “stuff of nightmares”.
He said it would give the state “a licence to kill the wrong type of people”, adding: “I’m the wrong type. This bill effectively puts a price on my head.”
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2:09
Assisted Dying vote: Both sides react
After the debate, Labour peer and former MP Baroness Luciana Berger, an opponent of the bill, claimed a victory after peers accepted her proposal to introduce a special committee to examine the bill and report by 7 November.
“The introduction of a select committee is a victory for those of us that want proper scrutiny of how these new laws would work, the massive changes they could make to the NHSand how we treat people at the end of their lives,” she told Sky News.
“It’s essential that as we look at these new laws we get a chance to hear from those government ministers and professionals that would be in charge of creating and running any new assisted dying system.”
After the select committee reports, at least four sitting Fridays in the Lords have been set aside for all peers – a Committee of the whole house – to debate the bill and propose amendments.
Report stage and third reading will follow early next year, then the bill goes back to the Commons for debate on any Lords amendments. There’s then every chance of parliamentary ping pong between the two Houses.
Kim Leadbeater’s bill may have cleared an important hurdle in the Lords. But there’s still a long way to go – and no doubt a fierce battle ahead – before it becomes law.
The UK and Irish governments have agreed a new framework to address the legacy of the Northern Ireland Troubles.
The framework, announced by Northern Ireland Secretary Hilary Benn and the Irish deputy prime minister, Simon Harris, at Hillsborough Castle on Friday, replaces the controversial Legacy Act, introduced by the Conservative government.
“I believe that this framework, underpinned by new co-operation from both our governments, represents the best way forward to finally make progress on the unfinished business of the Good Friday Agreement,” said Mr Benn.
He added that it would allow the families of victims killed during violence in Northern Ireland between the 1960s and 1990s, to “find the answers they have long been seeking”.
The proposed framework includes a dedicated Legacy Commission to investigate deaths during the Troubles, a resumption of inquests regarding cases from the conflict which were halted by the Legacy Act.
There will also be a separate truth recovery mechanism, the Independent Commission on Information Retrieval, jointly funded by London and Dublin.
“Dealing with the legacy of the Troubles is hard, and that is why it has been for so long the unfinished business of the Good Friday Agreement,” said Mr Benn.
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Mr Harris described the framework as a “night and day improvement” on the previous act. Scrapping the Legacy Act, introduced in 2023, was a Labour government pledge.
What this means
A section of the Legacy Act offered immunity from prosecution for ex-soldiers and militants who cooperate with a new investigative body. This provision was ruled incompatible with human rights law.
The 2023 law was opposed by all political parties in Northern Ireland, including pro-British and Irish nationalist groups.
Image: The agreement replaces a controversial law. (Pic: PA)
The Irish government, which brought a legal challenge against Britain at the European Court of Human Rights, also opposed it.
Both governments said the new plans will ensure it is possible to refer cases for potential prosecutions.
Image: Sir Keir Starmer’s Labour government had pledged to improve relations with Ireland. (Pic: PA)
It will ‘take time’ to win families’ confidence
Irish Foreign Minister, Simon Harris, said in a statement that the framework could deliver on Ireland’s two tests of being human rights-compliant and securing the support of victims’ families, if implemented in good faith.
He added that winning the confidence of victims’ families would take time.
Dublin will revisit its legal challenge against Britain if the tests are met, it said.
Restoring strained relations
The UK’s Labour government had sought to reset relations with Ireland, after they were damaged by the process of Britain leaving the European Union.
The Conservative government had defended its previous approach, arguing prosecutions were unlikely to lead to convictions, and that it wanted to draw a line under the conflict.
A number of trials have collapsed in recent years, but the first former British soldier to be convicted of an offence since the peace deal was given a suspended sentenced in 2023.
The former SEC chair and Paul Atkins, the current head of the agency, both made media appearance this week to address significant policies proposed by US President Donald Trump.