Regulations Round-Up – January 2022

Cryptocurrencies had a difficult month in December after the Federal Reserve hinted that it will start hiking interest rates in 2022. Bitcoin retreated to $45,000 while all cryptocurrencies tracked by CoinGecko saw their market capitalization crash to about $2.4 trillion. American stocks rose, with the S&P 500 index rising to an all-time high. As an agency specialising in financial marketing, our team has rounded up the top regulation changes in December and now we’re looking at what’s coming up in January 2022.

Turkey prepares cryptocurrencies regulations

Turkey was in the spotlight in December as its local currency continued its freefall. The lira crashed to a record low of about 18 against the US dollar. That happened after the Turkish central bank continued its rate cuts even as inflation surged above 21%.

In December, the government confirmed that its cryptocurrency regulations were ready. President, Erdogan, confirmed that the regulators had come up with comprehensive regulations, which will be submitted to parliament soon. In a recent statement, the president said that the country was at war with cryptocurrencies. That signals that the laws will be stiff since many people in Turkey had started to embrace stablecoins as an alternative to the lira.

Issuers of standard listed shares, or equity shares represented by certificates (global depositary receipts) must now include a statement in their annual financial reports setting out whether their disclosures meet the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). If they don’t, they’ll need to explain why.

FCA-regulated asset managers and asset owners – including life insurers and pension providers, will have to disclose how they take climate-related risks and opportunities into account in managing investments. They’ll also have to make disclosures about the climate-related attributes of their products.

The rules will come into effect from 1 January 2022. Asset managers and asset owners will have a phased implementation, with the rules initially applying to the largest firms and coming into effect for smaller firms one year later.

India crypto regulations

India made headlines early this year when it hinted that it will ban cryptocurrencies. The government later confirmed that it was working on regulations that will control how cryptocurrencies will be used. In a report in December, the Indian Central Bank recommended that the government should ban cryptocurrencies like Bitcoin.

In its place, the bank suggested that it was building its central bank digital currency (CBDC). The bank said that the CBDC will provide a safe and robust alternative to cash. It is also building wholesale and retail CBDCs.

ASIC To Soften Rules on Charges

The Australian Securities and Investments Commission is in line for a new program designed to stop it imposing too many fees across the economy. Regulators are encouraged to recover costs from industry but there are concerns that has gone too far. The Department of Finance told a Senate estimates hearing they are shortlisting from 60 to 70 regulators to select three to kick off a pilot program that will bring practices and performance up to standard. Liberal senator James Paterson said.

“ASIC’s decisions to charge and increase fees is often very contentious with industry,” 

Finance Minister Simon Birmingham agreed small businesses and financial advisers in particular are concerned about the “escalation” of fees imposed by the corporate watchdog. ASIC has a reputation for being one of the most litigious regulators in the FX space.

Crypto CEOs urge light touch regulations

The Securities and Exchange Commission (SEC) is said to be working on a set of cryptocurrency regulations. In previous statements, the SEC has sought input from participants in the cryptocurrencies industry.

In December, several cryptocurrency executives went to Capital Hill to testify before Congress. This included executives from companies like Coinbase and Circle. The session was followed by another testimony by stablecoin companies like Circle and Tether.

The common theme of these testimonies was the need of soft-touch approach to cryptocurrencies. In a statement, the CEO of Coinbase said:

“Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations.”

Singapore unfriendly to cryptocurrencies

For a long time, Singapore has sought to cultivate an image as a welcoming cryptocurrencies country. However, data compiled by Vulcan Post in December showed that only about 3% of all digital payment tokens (DPT) received license from the Monetary Authority of Singapore (MAS). This is despite the fact that Singapore ranks as the best country for cryptocurrency regulations according to the Coincub Global Crypto Rankings.

If you enjoyed our Regulations Roundup January 2022, be sure to hit the share button. Love this type of content and want it for your FX broker or crypto exchange? We hear you. Contact the Contentworks team for financial services content.

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