Regtech Digest (01 November 2020)
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Our Top 5 Articles From the Week
Regulation Will Keep Paypal’s New Crypto Services From Looking Anything Like Crypto
PayPal recently confirmed that it would be adding crypto payments to its global platform over the coming months. The rollout will begin in the United States, where PayPal also became the first recipient of the New York Department of Financial Services’, or NYDFS, conditional Bitlicense, a program that the regulator announced this past summer. While the news is huge for crypto, PayPal will be under intense scrutiny. The nature of the conditional Bitlicense is that conditional licensees have to pair off with firms that have full Bitlicenses (in this case, Paxos) that will act as mentors of a sort. Per the NYDFS, conditional licensees also “may be subject to heightened review, whether in regard to the scope and frequency of examination or otherwise.” [Coin Telegraph]
Cryptocurrency ETFs: SEC Wants to Facilitate Tokenized Products
The U.S. Securities and Exchange Commission (SEC) wants to facilitate tokenized exchange-traded funds (ETFs), according to chairman Jay Clayton. The agency is collaborating with other U.S. regulators to determine how to regulate different crypto products. SEC Chairman Jay Clayton talked about the commission’s approach to regulating crypto products during a panel discussion hosted by the Chamber of Digital Commerce earlier this month. [Bitcoin News]
FSB Releases Recommendations to Regulate ‘Global Stablecoins’ Such as Libra
The G20’s financial watchdog, the Financial Stability Board (FSB), has published regulatory recommendations opposing the trans-national ambitions of “global stablecoins,” such as Facebook’s Libra project. The FSB’s report offers regulatory recommendations to G20 member states and the broader international community intended to prevent stablecoin projects from using opportunities for “regulatory arbitrage” and becoming embedded within the financial structures of national economies. [Coin Telegraph]
China Drafts Law to Legalize Digital Yuan, Outlawing Competitors
China’s central bank, the People’s Bank of China (PBOC), has drafted a law to legalize the digital yuan and outlaw digital currencies issued by anyone else competing with it. Meanwhile, the central bank has been cracking down on gambling sites that use the stablecoin tether. The People’s Bank of China published a draft law on Friday that gives legal status to its central bank digital currency (CBDC), the digital yuan. The central bank has also begun a public consultation on the draft law; comments can be submitted through Nov. 23. [Bitcoin News]
Iran’s New Crypto Law Requires Miners to Sell Bitcoin Directly to Central Bank to Fund Imports
Iran has reportedly revised the country’s cryptocurrency regulation to require licensed bitcoin miners to sell their coins directly to the central bank for use to fund imports. Iranian publication Financial Tribune conveyed: the measure proposed by the Central Bank of Iran [CBI] and the Ministry of Energy requires licensed crypto miners to sell the coins they mine directly to the CBI. [Bitcoin News]
Merkle Science News
Pundi X Set to Work With Merkle Science to Prevent Money Laundering
Pundi X is working with Merkle Science to prevent the illicit use of cryptocurrencies. Merkle Science’s solutions will enable the tracking of origin and destination of funds and help Pundi X in creating a safer environment for cryptocurrency transactions.
Merkle Science Becomes Official Sponsor of Access Code of Practice to Help Ensure Transparency in Cryptocurrency Use Cases
Merkle Science is now an associate sponsor of Code of Practice, launched by the Association of Crypto-Currency Enterprises and Start-ups Singapore (ACCESS). Facilitated by the Monetary Authority of Singapore (MAS) and developed in consultation with The Association of Banks in Singapore (ABS), the Code of Practice is a ground-up collaborative effort by the industry to develop a set of guidelines to help digital asset players strengthen regulatory compliance and enhance conduct.
About Merkle Science
Merkle Science provides blockchain transaction monitoring and intelligence solutions for cryptoasset service providers, financial institutions and government agencies to detect, investigate and prevent the use of cryptocurrency for money laundering, terrorist financing and other criminal activities. Merkle Science is headquartered in Singapore with offices in Bangalore, Seoul, and Tokyo and backed by Digital Currency Group, Kenetic, SGInnovate, and LuneX.
