In 2022, the crypto sector witnessed a series of significant layoffs, the price of Bitcoin collapsed three times, and several giant firms went bankrupt. However, 2022 was a pivotal year for crypto legislation worldwide, and several noteworthy regulatory occurrences might give one hope for the industry’s future.
The Markets in Crypto-Assets bill
After the European Parliament’s various voting procedures, the European Markets in Crypto Assets bill is on track to become law in 2024. Since the proposed initially comprehensive crypto framework in September 2020, it has undergone several rounds of consideration.
MiCA (Market in Crypto Assets regulation) is a regulation project aiming to establish a specific European framework for stablecoins and providers (VASP).
Basically, it’s the next big step for the European industry (access to the EU market/level of compliance similar to TradFi).
— William O’Rorke (@williamororke) March 12, 2022
The European Securities and Markets Authority oversees the transparent licensing system included in the bill. Rigorous requirements will be placed on stablecoin operators, and legal liability for crypto influencers will increase. The law takes a middle-ground approach, with an appropriate focus on safeguarding investments.
US Drafted Bills for Crypto Legislation
The Responsible Financial Innovation Act (RFIA) of the United States allocates responsibilities among various federal regulatory bodies. Investment contracts, which the RFIA classifies as “ancillary assets,” would be subject to regulation by the Commodity Futures Trading Commission under the new legislation. The document also defines DAOs, and sheds light on the taxation of cryptocurrency mining and staking, etc.
Several bills were made to stablecoins. One, from New Jersey Democrat Josh Gottheimer, would have the Federal Deposit Insurance Corporation insure stablecoins like it insures fiat deposits. The second was presented in September, which seeks to outlaw algorithmic stablecoins for two years.
Russia U-turns on Crypto
Russia sees cryptocurrency as a way to cope with the country’s relative isolation from the international monetary system. Before the invasion of Ukraine on February 24th, disagreements between the central bank and the finance ministry dominated the national crypto regulatory discussion. However, the Ministry of Finance has adopted a more moderate stance than the Central Bank on proposals to legalise crypto.
The balance of power was altered with the first digital asset licence given by the central bank. The deputy minister of energy has recommended legalising cryptocurrency mining, while high-ranking authorities have openly hinted at the possibility of using Bitcoin as a foreign trade currency.
Russia considers accepting Bitcoin for oil and gas https://t.co/q7zvTbuHDE
— BBC News (World) (@BBCWorld) March 25, 2022
At least three measures have been discussed in the Russian State Duma since then. Two bills are pending in Congress; one would incorporate cryptocurrency into the national tax code, while the other would permit mining under an experimental regime. The third, prohibiting the use of digital financial assets within the country as payments, has already been signed into law by the President.
Crypto mining moratoriums in US and Canada
Recently, crypto mining has been banned in New York and Manitoba in the United States and Canada, respectively. Proof-of-stake consensus mechanisms, which require significantly less energy to operate, have long been held up as a more sustainable alternative to proof-of-work crypto mining. But this possibility has remained on the table throughout the ongoing global discussion about the environmental costs of this practice.
Despite the widespread belief, the New York moratorium does not outright prohibit PoW mining. Instead, it conditions the privilege of doing so on the use of only renewable energy sources. This re-connects the topic to the ongoing “clean energy” debate as proponents of cryptocurrencies build their arguments for public support.
Brazil legalises crypto as a payment method.
The Brazilian Chamber of Deputies officially approved a regulatory framework for cryptocurrency payments at the end of November. While this legislation does not declare cryptocurrencies legal tender like in El Salvador, it lays the groundwork for a robust regulatory framework.
JUST IN: Brazil passes law to legalise #crypto as a method of payment throughout the country.
📰 https://t.co/iJVTndtwvR pic.twitter.com/mQ8nGihM5K
— CoinGecko (@coingecko) November 30, 2022
The news may seem trivial when placed in the context of more significant stories concerning regulation in the United States or Europe. However, it indicates a growing trend toward crypto-friendly policies in the region. In the previous few years, Asian legal systems have been sending restrictive signals, whereas Latin American countries have made significant progress toward crypto adoption.
