EU institutions announced an agreement on two landmark pieces of regulation: the Market in Crypto-Asset Act (aka MiCA), regulating most providers of cryptocurrency services, and an anti-money-laundering package imposing robust checks on cryptocurrency transfers. In the US, several proposals have been put forward over the past few months. One notable example is the wide-ranging bipartisan bill sponsored by Republican senator Cynthia Lummis and Democratic senator Kirsten Gillibrand, which the crypto industry has saluted as beneficial, while others have condemned it as a capitulation to the crypto lobby’s requests. On the other end of the spectrum is Democratic senator Elizabeth Warren, a fierce crypto critic who sponsored a bill calling for robust checks on cryptocurrency transactions in order to stop the evasion of sanctions against Russia. While the OG cryptocurrency bitcoin was launched in 2009 as a type of digital money, other tokens launched after it have been marketed as ideal “shares” giving voting rights in cryptocurrency-based startups, or as purely speculative assets. That has raised the question of whether selling a token to the public is tantamount to peddling unregistered securities. If you ask the US Securities and Exchange Commission (SEC), in fact, crypto does not need more regulation: Most of the tokens launched and sold today should simply stick to existing securities regulations.
England’s central bank says that a recent $2 trillion drop in the value of cryptocurrencies shows the market needs stricter regulations. The Bank of England’s (BOE) Fiscal Policy Committee says the market capitalization of digital assets has plummeted to about $900 billion from a peak of nearly $3 trillion late last year. The BOE said the recent volatility in crypto markets isn’t a threat to the overall system for the moment. But unless governments act, the bank says systemic risks will develop if crypto-asset activity and its ties to banks and other markets keep growing.