The past week has been relatively quiet in terms of enforcement news, but it has brought some peculiar local developments in regulation. US Representative Tom Emmer has introduced legislation in the US House of Representatives that could prevent the Federal Reserve from issuing a central bank digital currency (CBDC). According to the Minnesota legislator, the bill could prohibit the Fed from issuing a digital dollar “directly to anyone,” prevent the central bank from implementing monetary policy based on a CBDC, and require transparency for projects related to a digital dollar. .
Canadian Securities Administrators has published a notice outlining new commitments it expects from cryptocurrency trading platforms seeking registration in Canada. The new commitments address issues including asset segregation, leverage, capital determination, transparency and others. But most notably, it anticipates the ban on algorithmic stablecoins.
In a joint statement by three US federal agencies, the banking industry was advised against creating new risk management principles to combat liquidity risks from crypto market vulnerabilities. The Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency released a statement reminding banks to apply existing risk management principles when dealing with liquidity risks related to cryptocurrencies.
By July 2023, the Financial Stability Board, the International Monetary Fund (IMF) and the Bank for International Settlements will deliver documents and recommendations setting standards for a global crypto regulatory framework. The announcement was made by representatives of the world’s 20 largest economies, known collectively as the G20.
IMF says there is no cryptocurrency as legal tender
The IMF Executive Board endorsed a crypto-asset policy framework that did not grant crypto-assets official currency or legal tender status. The document “Elements of Effective Policies for Crypto Assets” develops a framework of nine policy principles that address macrofinancial, legal and regulatory issues, and international coordination. According to the first principle, safeguarding sovereignty and monetary stability, “do not grant crypto assets official currency or legal tender status”.
Emojis count as financial advice and have legal consequences
The judge of the United States District Court for the Southern District of New York ruled that emojis such as the rocket ship, stock graph and bags of money indicate a financial return on investment. In his ruling on Dapper Labs’ motion to dismiss the amended claim on the grounds that its NBA highlights violated safety laws, Federal Judge Viktor Marreo wrote: “And although the literal word ‘profit’ is not included in any of the tweets, the ‘rocket emoji, stock chart, and money bag emoji objectively mean one thing: a financial return on investment.
SEC Files Objection to Binance.US Offer for Voyager Assets
The U.S. Securities and Exchange Commission (SEC) has objected to Binance.US’s decision to acquire more than $1 billion in assets belonging to defunct cryptocurrency lending firm Voyager Digital. The SEC is formally investigating whether Binance.US and related debtors violated anti-fraud, registration and other provisions of federal securities laws. The agency noted a particular concern for asset security through the planned acquisition. According to the regulator, the information provided in the planned purchase of Voyager assets does not adequately describe whether Binance.US or affiliated third parties will have access to customer wallet keys or control over anyone with access to those wallets.
Nigeria in talks with NY-based company to revamp CBDC
After several attempts to create an efficient digital currency, the Central Bank of Nigeria is turning to a New York tech company to revamp the underlying technology. According to sources close to the matter, the Nigerian financial official discussed plans to develop a new and improved system with New York-based technology company R3. Although one of the first countries to launch a CBDC, Nigeria’s eNaira has had a slow start, with low adoption by the population. According to some reports, the ambitious project is “crippled”, with only 0.5% of Nigerians using CBDC.