Clifford Chance

Welcome to this week's global fintech round-up, summarising fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events.

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

SPOTLIGHT

Spotlight: Understanding the Regulatory Framework of the Future: Crypto Regulation in the EU and UK

In case you missed it, you can now access the recording from our recent webinar with Paysafe offering a deep dive into European regulatory developments for the crypto industry. Clifford Chance Partner Diego Ballon Ossio and Senior Associate Boika Deleva and Paysafe's Director of Digital Assets Samuel Collins discussed the practical implications arising from the Markets in Crypto-assests Regulation (MiCA) and regulatory efforts in the UK, as well as wider compliance challenges and strategies for businesses to navigate the evolving regulatory landscape. 

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

International

• (22 Aug 2023) Bank for International Settlements (BIS) paper on financial stability risks from cryptoassets in emerging market economies. The paper studies how vulnerabilities in the nature, structure, composition and function of cryptoasset markets translate into financial stability risks in traditional financial markets. | Webpage

APAC

Australia:

• (23 Aug 2023) The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) have published a report on the findings from a joint research project involving industry that explored potential use cases for a central bank digital currency (CBDC) in Australia. | Press release

New Zealand:

• (18 Aug 2023) Report by the New Zealand House of Representatives Finance and Expenditure Committee on its inquiry into the current and future nature, impact, and risks of cryptocurrencies. Amongst other things, the report recommends that, because it is early in the development of digital assets and blockchain, the Government and regulatory agencies proceed carefully and do not design and implement a fully integrated and consistent regulatory framework for digital assets at this point in time. | Inquiry webpage

Europe

EU:  

• (16 Aug 2023) European Central Bank (ECB) occasional paper entitled ‘Know your (holding) limits: CBDC, financial stability and central bank reliance’, which considers how CBDCs impact the balance sheets of banks and central banks and simulates the impact of a fictitious digital euro introduction in the third quarter of 2021.
• (16 Aug 2023) Interview with Verena Ross, Chair of the European Securities and Markets Authority (ESMA), published in the ECB’s Supervision Newsletter. The interview includes a section on MiCA, in which Ross warns that there is “no such thing” as a safe cryptoasset and that consumers need to be aware that MiCA does not provide the same protection as that for traditional financial products.

Luxembourg:

• (17 Aug 2023) Commission de Surveillance du Secteur Financier (CSSF) FAQs regarding virtual asset service providers.

UK:

• (17 Aug 2023) Financial Conduct Authority (FCA) statement setting out its expectations for cryptoasset businesses that need to comply with the Travel Rule from 1 September 2023. The Travel Rule, a recommendation of the Financial Action Task Force (FATF) and introduced in the UK through amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, requires cryptoasset businesses to collect, verify and share information about cryptoasset transfers.