Crypto regulation: Central banks around the world show their skills

As we enter 2022, discussions on crypto regulation are escalating and measures are being taken around the world. The industry will usher in "extensive new regulation" and these regulatory policies will influence the crypto market at any time.

U.S. President Biden signed an executive order titled "Ensuring the Responsible Development of Digital Assets" on March 9 local time, which will instruct federal agencies to take a unified approach to regulating cryptocurrencies, requiring them to work together to address the risks of cryptocurrencies, including consumer protection issues, national security impacts and threats to the financial system, while calling on them to support cryptocurrency innovation and ensure that the United States maintains "technological leadership in this rapidly developing field."

As the Russian-Ukrainian conflict erupts, Western countries are expanding the scope of economic sanctions to the crypto sector. Russia, which is under pressure, has recently discussed the future of cryptocurrencies. A State Duma (lower house of parliament) working group has expressed support for regulation rather than banning digital assets. The working group called for "clear regulation of the digital asset industry" as the most effective way to reduce the risks associated with the adoption of cryptocurrencies in the country. According to local media reports, about 50 experts attended a panel meeting "on the issue of cryptocurrency regulation" convened by the Duma working group. Participants concluded that "effective and transparent" regulation of Russia's digital asset industry requires a mechanism to "control cryptocurrency transactions."

South Korea's conservative candidate Yoon Seok-yeol won the general election and will be elected as the next president. He has promised to deregulate the crypto industry. At a cryptocurrency conference in January, Yoon Seok-yeol said that "out of touch with reality and unreasonable" regulations must be thoroughly reformed to "unleash the unlimited potential of the virtual asset market." Yoon Seok-yeol also promised to raise the proposed cryptocurrency capital gains tax threshold to 52.4 million won ($42,450). In addition, Yoon Seok-yeol said he would "take legal measures to confiscate cryptocurrency profits obtained through illegal means and return them to the victims." Earlier, South Korean lawmaker Yoon Chang-hyun said that if the Yoon Seok-yeol government came to power, South Korea would introduce a virtual asset professional banking system. In addition, Yoon Seok-yeol began issuing more than 22,000 NFTs on Monday this week to influence young voters in the final stages of the campaign.

In addition, Singapore Finance Minister Lawrence Wong said in parliament today that Singapore’s current income tax rules will apply to NFT transactions and to individuals who trade NFTs. In addition, Wong pointed out that since Singapore does not have a capital gains tax system, such gains will not be taxed.

While the promise of regulatory clarity continues to emerge is exciting for many in the crypto space, we need to recognize that this process will not be quick. The world still has a long way to go in terms of crypto regulatory policymaking. Thinking about the right framework for how to regulate the crypto industry is the right path.