From Russia to Hong Kong to Seoul: How Three Countries Are Racing to Regulate Crypto This Week
In the same week, three of the world's biggest economies are taking steps towards crypto regulation—and each is going about it in a distinct manner.
Russia is the most advanced of all countries in terms of procedure. The State Duma is holding today a second and third reading of a bill titled "On Digital Currency and Digital Rights" that was passed in April with a record 327 votes in favor.
In the event of approval, it would establish Russia's first all-encompassing legal framework for digital assets under the control of the Bank of Russia, which will come into force as early as September 1.
The Russian way is well managed. A single licensed intermediary would allow retail investors to buy and sell up to 300,000 rubles ($3,800) of cryptocurrencies each year, and to transfer up to 100,000 rubles ($1,200) abroad. A limited number of licensed premises would be allowed to open.
The banking route is being taken by Hong Kong. The Hong Kong Monetary Authority (HKMA) granted licenses to its first two stablecoin issuers in April, and a Hong Kong dollar-pegged stablecoin from a Standard Chartered-backed venture may hit the exchanges before the end of this month.
The city of Hong Kong is also preparing general laws on virtual asset trading, custody and advisory.
Seoul is on two tracks. Crypto has been formally incorporated into the government's asset management system for the first time in 76 years, as part of a new National Asset Basic Act on July 15.
On its own, this week regulators have agreed to speed up the Framework Act on Digital Assets, which is supposed to legalize stablecoins denominated in won. It will be aimed at being reintroduced in September and reviewed by sub-committees on a fortnightly basis.
Here, three philosophies are seen. Russia is creating a narrow but allowed channel with strict state oversight. Before opening the market of stablecoins in Hong Kong, the city is allowing licensed banks to issue stablecoins.
South Korea is developing state recognition and stablecoin regulations concurrently, hoping other cryptocurrencies will stay in the country if they are given some clarity.
These frameworks aren't finalised, but timelines within crypto legislation keep changing regularly. All above are treated as development law rather than established law.
This is not financial advice. Regulatory regulations may change before they are implemented and are subject to change from jurisdiction to jurisdiction.
Which of these three do you consider to be the best compromise between investor protection and market growth? Share your opinion.
