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1、PwCPwC Global Crypto Regulation Report 202319 December 2022(updated)PwC2December 2022ContentsWhere is crypto regulation heading?4Views from global standard-setters9EU single market for digital assets13Summaries from selected jurisdictions18PwC services and capabilities66PwC Global Crypto Regulation
2、Report 2023PwCPurpose and objectivesThis PwC Global Crypto Regulation 2023 report provides an overview of the crypto regulation landscape,with a focus on financial services.It offers insights into how the regulatory frameworks are developing across the world and seeks to identify how this may impact
3、 relevant industry participants and virtual service providers within the financial services sector.Where is crypto regulation heading?This section provides a snapshot on global crypto regulation,our views on how market trends are shaping global frameworks and considerations for traditional financial
4、 services institutions and crypto native firms entering the space.Views from global standard-settersThis section focuses on how some of the key regulatory standard-setting institutions are shaping international crypto regulation discussions.EU and local regulationThese sections focus on the signific
5、ant advancements in digital asset regulation at the European Union and jurisdictional level.Noticeably,while much progress has been made over the last few years,there still remain differences between scope and implementation timelines.How can PwC help?PwC offers a wide range of expertise,including s
6、trategy,financial crime,legal,regulatory,accounting,tax,governance,risk assurance,audit,cybersecurity as well as transaction advisory for working with all areas of crypto and digital assets.Our global network is constantly evolving its thinking in how this technology can be applied,through research,
7、client engagements and the development of thought leadership.For further digital assets research,please also see our other global reports,including PwCs annual Crypto Tax,CBDC Index&Stablecoin Overview as well as Crypto Hedge Fund reports.The reports can be accessed through PwC Crypto Center(https:/
8、 in the space is broken right now.While regulation alone will not solve that,clarity across terminology and application of regulation,along with enhancements to risk management capabilities and procedures,is a good starting point.Global crypto regulation reportMatt BlumenfeldWeb3&Digital Asset LeadP
9、wC USDecember 20223PwC Global Crypto Regulation Report 2023*The original report was published on 13 December 2022.The report was updated on 19 December 2022 to incorporate the final rules on the prudential treatment of cryptoasset exposures,published by the Basel Committee on Banking Supervision on
10、16 December 2022(page 11).PwCWhere is crypto regulation heading?December 20224PwC Global Crypto Regulation Report 2023PwCGlobal digital asset regulation in developmentThe regulatory focus on digital assets has increased dramatically over the last few years and will continue to do so.The growth in re
11、tail and institutional adoption resulted in a rapid rise in market capitalisation and extreme volatility.More recently,we have witnessed a loss of consumer trust,following a number of high-profile crypto firm failures,fraud,scams and mismanagement of customer funds.This has brought immediate sharp f
12、ocus to regulators.The risk to market integrity demonstrates the need for a rapid and comprehensive global regulatory policy approach and supervisory framework,to ensure enhanced consumer protection.The global asset class,which has seemingly grown up overnight,is more and more interconnected with th
13、e traditional financial ecosystem,with an increasing impact on financial stability.The risks are heightened by the pace of innovation and lack of focus on risk management.The global standard-setters are accelerating the push for international cooperation.Many local authorities have publicly announce
14、d their plans to become global centres for digital assets,technology and innovation.The European Union is at advanced stages of finalising the new Markets in Crypto-Assets Regulation.In the United Arab Emirates,Dubai authorities are setting up the worlds first authority solely focussing on virtual a
15、ssets.Switzerland has integrated one of the most mature regulatory framework for digital assets,allowing market participants to gain certainty on the legal and regulatory treatment of their projects and intended activities.Overall,a significant number of countries are researching,defining,consulting
16、,negotiating and legislating in order to bring digital assets,typically,under the existing financial services frameworks.Yet,the speed of action,approaches adopted,services and products covered and even the definitions and terminology used*remain heavily fragmented.Regulators sharpen their knivesThe
17、 industry has long raised concerns over the lack of transparency and urgency in the regulatory decision-making.And it may seem that regulators are playing catch up having to grapple with the speed of change,while trying to ensure staff have the right skill sets and resources to support the policy-ma
18、king process.However,while regulatory timelines are not in all cases set,the direction of travel is clear.Firms involved in digital assets must be prepared for higher standards than those in place today.The bar is rising to bring digital asset firms in line with traditional financial services obliga
19、tions.And for consumers,firms,and other stakeholders,it seems that this change could not happen soon enough.Cryptocurrencies may have been originally created to operate free from control,but the lack of a robust global regulatory framework for digital assets is harmful for the sector,innovation and
20、consumer protection.Laura TalvitieSenior Manager,Digital Assets RegulationPwC UK*Some authorities have adopted a catch-all regulatory definition to include all digital assets as a new form of financial instrument.Others have implemented more detailed regulatory definitions,in accordance with the dig
21、ital assets economic function.The terminology adopted includes,but is not limited to:digital asset,crypto asset,virtual asset,digital settlement asset,virtual currency and cryptocurrency.In this report,the terminology and spelling used follows the one adopted by the authorities in the relevant juris
22、diction.December 2022PwC Global Crypto Regulation Report 20235PwCDigital assets ecosystem at a turning point-disrupt or be disruptedThe digital asset ecosystem has reached a turning point.While traditional financial institutions have experimented with distributed ledger technology(DLT)in some shape
23、or form,crypto native firms are the ones defining and transforming the sector through innovation.As adoption of the technology grows,the two will meet somewhere in the middle.What this crypto regulation report shows,is that many regulators across the globe have either enacted regulatory schemes for
24、dealing in crypto assets or are on the brink of doing so.The commonly used justification for traditional financial institutions not embracing the potential which digital assets can bring to an organisation,its customers and the ecosystem as a whole will no longer hold true.Despite the onset of the c
25、rypto winter at the beginning of 2022,public interest in digital assets remains high.Whether its a consistent base of investments into crypto currencies,the continued listing of new projects or the recovery of the security token and non-fungible token(NFT)markets,retail investors remain committed to
26、 digital assets.Institutional investors are also increasingly entering the space and the number of crypto based funds is steadily increasing.If traditional financial institutions want to avoid falling behind,they need to increase their pace of adapting to this new asset class and its underlying tech
27、nology.Ensuring you are crypto compatibleWith regulatory frameworks for digital asset products,services and service providers coming into effect,crypto native organisations are increasingly faced with adopting more traditional approaches towards corporate governance,compliance and risk management fr
28、ameworks.At PwC,we have been working with a number of crypto firms to help them define and implement the right controls and procedures.While more accustomed to being regulatory compliant in the business they do,the same applies for traditional financial institutions embarking on the digital asset tr
29、ansformation.What firms need to doRegulation has leveled the playing field for crypto assets.Traditional finance needs to step up now or fear being disrupted by crypto natives.Andreas TraumPartner,Digital AssetsPwC GermanyWhat is your crypto strategy?Whatever your organisations background is-whether
30、 crypto native or traditional centralised finance-with crypto regulation coming of age,you are faced with the same questions:which type of digital asset services do you want to offer?With the ecosystem quickly evolving,what is your right to play and can you differentiate?Further,are you well enough
31、equipped to succeed?The frequently quoted war for talent applies much stronger to the digital asset space,where crypto natives and traditional finance are not necessarily natural matches.Crypto fintechs need regulatory expertise and traditional finance needs crypto expertise-both are scarce.Finally,
32、all this needs to be factored into your risk strategy.Stakeholders and regulatory alike expect clear and conscious decisions on the risks an organisation is willing to take in the digital asset space.And,more importantly,how those risks will be managed and mitigated.December 2022PwC Global Crypto Re
33、gulation Report 20236PwCCrypto regulation at a glanceDecember 2022PwC Global Crypto Regulation Report 20237JurisdictionRegulatory frameworkAML/CTF*Travel ruleStablecoins(used for payments)United StatesUnited KingdomAustraliaAustriaBahamasBahrainCanadaCayman IslandsChina(Mainland)DenmarkEstoniaFrance
34、GermanyGibraltarHong KongHungaryIndiaItalyJapanLegislation/Regulation in placePending final legislationProcess initiated or plans communicatedRegulatory process not initiatedThe country prohibits cryptocurrencies*Anti-Money Laundering/Counter-Terrorist Financing.In this report,the term Combating the
35、 Financing of Terrorism(CFT)is also used.The regulatory assessment is based on the analysis undertaken by individual PwC member firms.PwCJurisdictionRegulatory frameworkAML/CTF*Travel ruleStablecoins(used for payments)Jordan*KuwaitLuxembourgMalaysiaMauritiusNew ZealandOmanPanamaQatarSaudi ArabiaSing
36、aporeSouth AfricaSwitzerlandTaiwanTurkey*United Arab EmiratesCrypto regulation at a glance*Anti-Money Laundering/Counter-Terrorist Financing.In this report,the term Combating the Financing of Terrorism(CFT)is also used.*The Central Bank of Jordan prohibits banks,currency exchanges,financial companie
37、s,and payment service companies from dealing in digital currencies.While it has warned the public of the risks of private digital currencies and they are not legal tender,payments may still be accepted by small businesses and merchants.*The Central Bank of Republic of Turkey prohibits the direct or
38、indirect use of crypto-assets that are not qualified as fiat currency,fiduciary money,electronic money,payment instrument,securities or other capital market instruments in payments.The regulatory assessment is based on the analysis undertaken by individual PwC member firms.December 2022PwC Global Cr
39、ypto Regulation Report 20238Legislation/Regulation in placePending final legislationProcess initiated or plans communicatedRegulatory process not initiatedThe country prohibits cryptocurrenciesPwCViews from global standard-setters9PwCThe FSB expects national authorities to implement regulatory frame
40、works for digital assets comparable to those already in place for traditional finance.For national authorities,this means having and using powers,tools and resources to regulate and supervise the growing crypto and stablecoin market.Authorities should cooperate and coordinate with each other,domesti
41、cally and internationally,to encourage consistency and knowledge-sharing.Crypto and stablecoin firms,including issuers,service providers,exchanges and wallets,should be subject to comprehensive regulatory requirements.These include having in place effective governance and risk management frameworks
42、as well as robust frameworks for collecting,storing,safeguarding,and the timely and accurate reporting of data.Global stablecoin arrangements should have high trust and transparency obligations,including redemption rights,stabilisation mechanisms and requirements around the composition and quality o
43、f reserve assets.Independent,transparent and regular audit arrangements should be in place to confirm the amount of global stablecoins in circulation as well as the value and composition of the assets backing them in reserve.The combination of multiple functions within a single service provider may
44、result in complex risk profiles and conflict of interest,such as those present in other financial conglomerates.The FSB expects jurisdictions to address these risks effectively.In some jurisdictions,this may mean disallowing the provision of certain combinations of services or functions within a sin
45、gle entity.The FSB will finalise the proposed recommendations by July 2023.Further work may be required in 2023 on developments in the broader field of wider decentralised finance(DeFi)and the associated financial stability risks.The FSB will review the implementation progress of its recommendations
46、 by the end of 2025 and take stock of the regulatory measures adopted by FSB member jurisdictions,including the achieved outcomes.FSB on global framework Expectations from global standard-settersGlobal regulatory standard-setters have become increasingly vocal on the threats the digital asset market
47、 could impose to global financial stability.The scale,structural vulnerabilities and increasing interconnectedness with the traditional financial system has become impossible to ignore.The core message remains:effective regulatory and supervisory frameworks at national level should be based on the p
48、rinciple of same activity,same risk,same regulation.Although the recommendations and guidance may not carry a legal status,they provide important direction to national authorities.Firms should consider the policy standards in the context of the likely implementation into their local regulation.Globa
49、l regulatory frameworkIn October 2022,the Financial Stability Board(FSB)published a proposed framework and recommendations for the international regulation of crypto assets and global stablecoin arrangements.The FSB identifies a number of challenges around the national application of crypto asset re
50、gulation and supervision:existing regulatory powers and reach as well as gaps in the application,including cross-border cooperationrisks related to wallets and custody services,trading,lending and borrowing activitiesextensive use of Distributed Ledger Technology(DLT)Further information:FSB:Regulati
51、on,supervision and oversight of Crypto-Asset activities and markets,11 October 2022,FSB:Review of the FSB high-level recommendations of the regulation,supervision and oversight of Global Stablecoin arrangements,11 October 2022December 2022PwC Global Crypto Regulation Report 202310PwCBanks breaching
52、the 1%limit expectation must apply Group 2b capital treatment(1250%risk weight)to the amount by which the limit is exceeded.Where 2%limit is exceeded,the whole of Group 2 exposures are subject to the Group 2b capital treatment.Additional operational risk,liquidity,leverage ratio and large exposure,s
53、upervisory review and disclosure requirements apply to both Groups.The BCBS will continue to monitor the standard,with a particular focus on certain identified key issues:Potential additional requirements needed on statistical and redemption risk test application in relation to Group 1b assets(stabl
54、ecoins);Inclusion of permissionless blockchain assets into Group 1;Assessment on whether Group 1b cryptoassets(stablecoins)could be used as collateral for capital requirements purposes;Criteria and degree of hedge recognition for Group 2a assets;andGroup 2 exposure limits.The BCBSs will implement th
55、e standards by 1 January 2025 and incorporate the text into the consolidated Basel Framework before that.Global prudential standardsThe Basel Committee on Banking Supervision(BCBS)published its final rules on the prudential treatment of cryptoasset exposures in December 2022.Unbacked cryptoassets an
56、d stablecoins with ineffective stabilisation mechanisms will be subject to a conservative prudential treatment.According to the final standard,banks are required to classify cryptoassets on an ongoing basis into two groups.Group 1 The cryptoassets must meet in full a set of classification conditions
57、.The assets in this Group include tokenised traditional assets which pose the same level of credit and market risk as the non-tokenised form of the asset(1a assets)and cryptoassets with effective stabilisation mechanism,linking the value to one or more traditional assets(stablecoins)(1b assets).Whil
58、e the capital requirements for group 1 assets generally follow the existing Basel Framework,an infrastructure risk add-on to risk-weighted assets(RWA)may apply if weaknesses are identified in the underlying exposure on which the cryptoassets is based.Group 1 stablecoins must also satisfy a redemptio
59、n risk test and an additional supervision/regulation requirements which are likely to evolve in the future.Group 1 excludes algorithmic stablecoins and assets using protocols to maintain their value.Group 2 The cryptoassets do not meet the classification conditions for Group 1 and are subject to a n
60、ew conservative capital treatment.These assets include tokenised traditional assets and stablecoins which fail the group 1 classification conditions,as well as all un-backed cryptoassets.An additional hedging recognition criteria sets the conditions for those Group 2 assets where a limited degree of
61、 hedging can be recognised(2a)and where hedging is not recognised(2b).Banks total exposure to Group 2 assets must not exceed 2%limit of the Tier 1 capital and should generally be lower than 1%.Exposures under the 1%threshold will be risk-weighted according to whether the asset does or does not meet
62、the hedging recognition criteria for Group 2a assets.BCBS on prudential standardsFurther information:BCBS:Prudential treatment of cryptoasset exposures,16 December 2022,PwC:Basel Committee confirms prudential standard for cryptoassets,19 December 2022.This page was updated on 19 December 2022 to inc
63、lude the final rules.December 2022PwC Global Crypto Regulation Report 202311PwCFinancial integrityIn October 2021,the Financial Action Task Force(FATF)issued updated guidance for a risk-based approach to virtual assets and virtual asset providers.It is intended to help regulators to develop regulato
64、ry and supervisory directives for virtual asset activities,and to help Virtual Asset Service Providers(VASPs)to understand and execute their AML/CFT obligations.For regulators,the FATF recommends a risk-based approach,technological neutrality and future-proofing a level playing field,while recognisi
65、ng the internet-based,borderless nature of virtual assets.For VASPs,the guidance clarifies the five listed activities which are covered under the FATF recommendations.All jurisdictions are obligated to impose specified AML/CFT requirements,including the travel rule,on financial institutions,designat
66、ed non-financial businesses and professions as well as VASPs.The travel rule requires financial institutions to share data on transactions beyond a threshold.The guidance recommends VASPs(exchanges,banks,Over-the-Counter desks,hosted wallets,and other financial institutions)to share certain personal
67、ly identifying information about the recipient and sender for crypto transactions over USD/EUR 1,000 globally.The rule is intended to block terrorist financing;deter payments to sanctioned individuals,entities and countries;enable law enforcement to subpoena transaction details;support reporting of
68、suspicious activities;and prevent money laundering.In July 2022,the FATF reported that jurisdictions have made only limited progress in introducing the travel rule and the vast majority have not passed legislation or started enforcement and supervisory measures.The FATF also noted that the vast majo
69、rity of jurisdictions have not fully implemented its Recommendation 15.The Recommendation sets the global AML/CFT Standards for virtual assets and VASPs.Countries are expected to ensure that VASPs are regulated for AML/CFT purposes,and licensed or registered as well as subject to effective systems f
70、or monitoring.Systemically important stablecoinsIn July 2022,the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions(CPMI-IOSCO)issued a final report providing clarity on the application of the Principles for Financial Market Infrastructures
71、to stablecoin arrangements,which are considered systemically important financial market infrastructures.It is intended to assist national authorities in determining whether a stablecoin arrangement is systemically important.Specifically,the report proposes guidance on aspects related to governance,f
72、ramework for the comprehensive management of risks,settlement finality and money settlements.The report excludes considerations for stablecoins denominated in or pegged to a basket of fiat currencies(multicurrency stablecoins)which will be considered in the future work as required.Fintech standardsI
73、n July 2022,IOSCOs Fintech Task Force issued a Crypto-Asset Roadmap for 2022-2023.It sets out the plans and activities for two workstreams,1)Crypto and digital assets and 2)DeFi.The workstreams will focus on issues relating to market integrity,investor protection and financial stability,as well as o
74、n how to manage crypto and DeFi risks within regulatory frameworks.Both groups will publish their final policy recommendations by the end of 2023.Other global developmentsFurther information:FATF:Targeted update on implementation of the FATF standards on virtual assets and virtual asset providers,Ju
75、ly 2022,FATF:Updated guidance for a risk-based approach virtual assets and virtual asset providers,IOSCO:IOSCO Crypto-Asset Roadmap for 2022-2023,7 July 2022,IOSCO:IOSCO Decentralised Finance Report,March 2022,CPMI-IOSCO:Application of the Principles for Financial Market Infrastructures to stablecoi
76、n arrangements,July 2022December 2022PwC Global Crypto Regulation Report 202312PwCEU single market for digital assetsEU single market for digital assets13PwCMiCA:introductionBackgroundThe Markets in Crypto-Assets Regulation(MiCA)is the first cross-jurisdictional regulatory and supervisory framework
77、for crypto-assets.It was originally introduced in 2020 as a response to a global stablecoin initiative.MiCA is expected to enter into force in 2024,subject to its ratification by the European Parliament(which is expected in early 2023).It forms a part of the European Commissions goal to establish a
78、regulatory framework for facilitating the adoption of distributed ledger technology(DLT)and crypto-assets in the financial services sector.MiCAs key objectives include ensuring legal clarity,consumer and investor protection,market integrity and financial stability,while promoting innovation and addr
79、essing the challenges caused by fragmented national frameworks.Firms in scopeIn general,any business activity related to crypto-assets in the EU is likely to fall under MiCA.Non-EU crypto-asset firms carrying out activities for EU customers must also comply with the requirements.MiCA exempts service
80、s provided by non-EU domiciled firms on the basis of reverse solicitation,i.e.when responding to an initiative from an EU customer under a set of strict terms,as defined in MiCA.MiCA clarifications:Tokens defined as financial instruments will be subject to the existing financial services rules(in pa
81、rticular,MiFIR/MiFID II).Tokens defined as crypto-assets will be subject to to the bespoke pan-EU regime established by MiCA.Introduces rules regarding regulated crypto-asset services,including authorisation,passporting and ongoing supervision requirements for crypto-asset issuers(CAIs)and crypto-as
82、set service providers(CASPs).Products in scopeMajority of crypto-assets which are not already in scope of existing regulation will fall under MiCA:Asset-referenced tokens(ART)Electronic money tokens(EMT)Other crypto-assets(including utility tokens)The European Securities and Markets Authority(ESMA)w
83、ill issue guidelines on the criteria and conditions on designating digital assets either in-scope or out of scope of MiCA within 18 months of MiCAs entry into force.Services in scopeThe services governed by MiCA are largely similar to MiFID regulation and trigger a licensing requirement for CASPs.Th
84、ese include:custody and administration of crypto-assets on behalf of third parties;operation of a trading platform for crypto-assets;exchange of crypto-assets for funds(i.e.fiat and other currencies);exchange of crypto-assets for other crypto-assets;execution of orders for crypto-assets on behalf of
85、 third parties;placing of crypto-assets(any marketing on behalf of,or for the account of,the offeror);providing transfer services for crypto-assets on behalf of third parties;reception and transmission of orders for crypto-assets on behalf of third parties;providing advice on crypto-assets;and provi
86、ding portfolio management on crypto-assets(i.e.where portfolios include one or more crypto-assets).MiCA does not specify whether lending of crypto-assets is a regulated activity.This may be regulated at the national level or lending activities involving crypto-assets may be undertaken in the context
87、 of a lender performing other regulated activities,triggering MiCAs authorisation requirements.If a digital asset is categorised as a financial instrument,lending of financial instruments is governed by the existing and extensive body of EU financial services legislative and regulatory instruments.F
88、urther information:European parliament:Proposal for a regulation of the European parliament and of the council on markets in crypto-assets,5 November 2022December 2022PwC Global Crypto Regulation Report 202314PwCSummary of product classificationDLT equivalents for coins and banknotes and used as pay
89、ment tokens.EMTs must be backed by one fiat currency which is a legal tender.Electronic money tokens(EMT)MiCA(in-scope)Asset-referenced tokens(ART)Other crypto-assetsTokens aiming to maintain a stable value by referencing one or several assets,including fiat currencies,crypto-assets or commodities.T
90、okens with a digital representation of value or rights which may be transferred and stored electronically.Utility tokens which provide access to a good or service and only accepted by the issuer of that token.Payment tokens which are not EMTs or security tokens.Digital assets governed by the existin
91、g financial services rules,as amended,including security tokens and derivatives on crypto-assets.EU financial instruments(regulated elsewhere)MiCA-out of scope Other digital assets(including)Digital assets which cannot be transferred,are offered for free or are automatically createdCentral bank digi
92、tal currencies(CBDCs)Non-fungible tokens(NFTs)Decentralised finance(DeFi)protocolsSignificant tokens*and stablecoins*MiCA may designate ARTs and/or EMTs(in particular algorithmic crypto-assets and stablecoins)as significant.Whether an ART or EMT is deemed as significant depends on the volume and fre
93、quency of transactions as well as systemic risk impact.Additional requirement for CAIs include,subject to further conditions:higher regulatory capital requirements,requirements for specific liquidity and management policies and procedures as well as compliance with a specific interoperability criter
94、ia.The European Banking Authority will supervise compliance of CAIs in collaboration with the respective national competent authorities.December 2022PwC Global Crypto Regulation Report 202315Algorithmic crypto-assets and algorithmic stablecoinsPwCKey compliance obligationsCrypto-asset issuers(CAIs)C
95、AIs will have to meet the following obligations,before making an offer of crypto-assets(other than ARTs or EMTs)to the general public in the EU or in order to request admission of such crypto-assets to trade on a trading platform:whitepaper describing the technical information of the crypto-asset,pu
96、blished online;approved market communication;legal entity registration,financial condition(review)for past three years and details of natural or legal persons involved in the project;brief description of the project,characteristics of the token,key features on utility and information on tokenomics;b
97、usiness plan,including planned use of funds from issuance;disclosures on risks and reasons for seeking admission to trading platforms(if applicable);andany restrictions on transferability of the tokens issued.The obligation to publish a whitepaper does not apply where the the crypto-assets are offer
98、ed for free,are created through mining,are unique and not fungible with other crypto-assets.A whitepaper is also not required if the offering is made to fewer than 150 natural or legal persons per member state,the total consideration of does not exceed EUR 1 million or if the offering is addressed e
99、xclusively to qualified investors.Asset-referenced tokens(ARTs)and Electronic money tokens(EMTs)ART and EMT offerings are subject to additional requirements.These include the public disclosure of various policies and procedures as well as further disclosures of safeguards of reserve funds and intern
100、al control systems.National competent authorities(NCAs)may also set additional requirements.CAIs of EMTs are required to be authorised either as credit institutions(i.e.a bank)or electronic money institutions.Yield and interest are prohibited under MiCA.Discounts,rewards or compensation for holding
101、EMTs will be considered as offering interest.Crypto-asset service providers(CASPs)A legal entity wishing to apply to become a CASP must have a registered office in an EU Member State and have obtained an authorisation to provide one or more regulated crypto-asset services from an NCA.An authorisatio
102、n obtained in one member state allows the CASP to passport its regulated activities across other member states.CASPs must also abide by the general conduct of business rules.These include that a CASP:acts fairly and in the interest of clients;has at least one Director who is a resident in the EU;has
103、 its place of effective management in the EU;ensures and satisfies the authorising and supervising NCA that its members of management and qualifying shareholders(i.e.those holding 10%or above)satisfy fit and proper standards;complies with prudential capital and governance,risk and compliance as well
104、 as internal organisational requirements;ensures that it maintains robust and secure standards of safekeeping of assets and funds;implements prompt and equitable complaint handling procedures;identifies,prevents and manages conflicts of interests promptly and fairly;monitors outsourcing risk and com
105、ply with on-going outsourcing requirements;andcomplies with other policies including orderly(solvent)wind-down and exits from certain markets.CASPs offering custody and/or safekeeping of crypto-assets are required to establish a custody policy with segregated holdings,daily reporting of holdings and
106、 have liability for loss of clients crypto-assets in the event of malfunctions or cyber-attacks.CASPs must place clients funds received with a central bank or credit institution(other than in relation to e-money tokens)at the end of every business day.Trading platforms are required to set operating
107、rules,technical measures and procedures to ensure resilience of the trading system,with the final settlement taking place within 24 hours of a trade.Capital requirements apply to CASPs,depends on the type of regulated activity.December 2022PwC Global Crypto Regulation Report 202316PwCOther regulator
108、y requirementsMarket abuseMiCA establishes a bespoke market abuse regime for crypto-assets.The regime sets rules to prevent market abuse,including through surveillance and enforcement mechanism.This amends and extends certain concepts which exist under EU financial services legislative and regulator
109、y instruments,and in particular in the EU market abuse regulation.MiCAs bespoke market abuse regime clarifies the definition of inside information as it applies to crypto-assets,the parameters of the market abuse regulations and the need for CAIs whose crypto-assets are permitted to trade on a crypt
110、o-asset trading platform to disclose inside information.MiCA also outlaws market manipulation,illegal disclosure of insider knowledge and insider trading in MiCA in-scope crypto-assets.Other regulatory requirementsThe European Commission has published and moved to implement the following EU legislat
111、ion,relevant to crypto-assets:A directive introducing targeted amendments to the existing extensive body of EU financial services legislative and regulatory instruments.These are to accommodate the MiCA regime and the Pilot DLT Market Infrastructure Regulation(PDMIR).The PDMIR,applicable from 23 Mar
112、ch 2023,creating a sandbox regime for private sector participants developing infrastructure for the trading and settlement of crypto-assets.EU regulation on digital operational resilience for the financial sector(DORA),which received final agreement in November 2022 and is awaiting signature and off
113、icial publication.In addition,updates are expected on the harmonisation of the EU AML framework,including the introduction of a single pan-EU AML Authority.Enforcement and supervisionNCAs act as the front-line supervisors and enforcement agents of CASPs and CAIs.NCAs will apply a modified set of sup
114、ervisory tools,including on-site and off-site inspections,thematic reviews and regular supervisory dialogue to identify,monitor and request remedies to compliance shortcomings by CASPs and/or CAIs.New enforcement powers include powers to:suspend CAIs/CASPs offering of activity;suspend advertisements
115、 and marketing activity;publish public censures or notices that a CAI/CASP is failing compliance;require auditors or skilled persons to carry out targeted on-site and/or off-site inspections of the CAI/CASP,and/or;issue monetary fines,other non-monetary sanctions and administrative measures to CAIs/
116、CASPs and/or the members of management(including bans).MiCA represents a paradigm shift in how digital assets are regulated and supervised.Firms will need to take an early action to move to meet the new requirements.Dr.Michael HuertasPartner,FS Legal Leader Europe PwC Legal Business Solutions,German
117、yDecember 2022PwC Global Crypto Regulation Report 202317PwCSummaries from selected jurisdictions18PwCSelected jurisdictionsDecember 2022PwC Global Crypto Regulation Report 202319United States20United Kingdom23Australia25Austria27Bahamas28Canada30Denmark31Estonia32France34Germany37Gibraltar41Hong Kon
118、g43Hungary45India46Italy48Japan49Luxembourg51Mauritius53New Zealand55Singapore57South Africa60Switzerland61Taiwan63Turkey64United Arab Emirates65PwCGovernment outlookThe US has a dual banking system,meaning that digital asset service provision can be regulated at the state level or at the Federal le
119、vel.In both cases,the state and Federal regulatory and enforcement agencies have outpaced Congress and the White House in moving to regulate digital asset activity.This has been done through using existing legal authorities,regulating digital asset activity using the payments scheme and,in some case
120、s,through the banking system,leveraging the non-depository trust vehicle to regulate digital asset activity.As the digital asset market grew and US Dollar-backed stablecoins approached systematic importance(exceeding the$50 billion threshold for systemic importance,as established in the wake of the
121、late 2000s financial crisis),Congress and the White House have increasingly engaged and issued guidance on the topic.While regulatory agencies continue to discuss regulatory authority,policy makers have been drafting digital asset legislation proposals.For instance,the bipartisan Responsible Financi
122、al Innovation Act(RFIA),would classify most digital assets as commodities(giving primary oversight responsibility to the Commodity Futures Trading Commission(CFTC)and establish requirements for stablecoins.In March 2022,the Administration released an Executive Order,outlining a whole-of-government a
123、pproach to address risks stemming from the growth of digital assets and blockchain technology while supporting responsible innovation.Initial findings have been reported,but questions still remain as to which of the many regulators in the US hold the power and authority to govern digital assets.The
124、Financial Stability Oversight Council,FSOC(an inter-agency consultative body composed of state and Federal banking,commodity,securities and consumer protection authorities)released a capstone report to the White House Executive Order,Report on Digital Asset Financial Stability Risks and Regulation.T
125、he report concludes that there is no comprehensive regulatory framework in the US for digital assets,despite clear registration requirements and jurisdictional claims by prudential and functional regulators.United StatesRegulators remain vocal on the risks towards financial stability and consumers.S
126、ome have started to carve out their jurisdiction through guidance and enforcement actions.Crypto asset regulationIn the absence of a comprehensive framework,the regulation of digital assets is a function of their regulatory asset classification,which may in certain cases overlap.Specifically,crypto
127、assets may qualify in a number of categories:Payments instrument or value that substitutes for currency,placing the provision of their services within the money service business(MSB)regulatory framework.Commodity instrument,if it constitutes a service,right or interest in which contracts for future
128、delivery are presently or in the future dealt in.Classification as a commodity places oversight over derivative instruments related to them under the commodity regulatory regime,which may include requirements for state registration.Security instrument,if it constitutes an investment of money in a co
129、mmon enterprise with a reasonable expectation of profits to be derived from the efforts of others.It may be subject to registration requirements and service provision may obligate the provider to register with securities regulators.Registration/licencingAs early as in 2013,the Financial Crimes Enfor
130、cement Network(FinCEN)issued guidance on administering,exchanging or using virtual currencies.It concluded that providing digital asset services is a form of money transmission and therefore are subject to FinCEN registration requirements as well as compliance with MSB money laundering prevention re
131、gulations and the US sanctions regime.As MSBs are regulated at the state level by state law,several states began to investigate the applicability of their specific laws and regulations to digital asset activity.Fragmented approaches remain,in similar way to general payments regimes.Certain states re
132、quire no registration.For instance,California has a policy of permitting digital asset firms to operate without a license to foster the industry whereas Montana does not regulate payments at all.Further information:The White House:Executive Order on Ensuring Responsible Development of Digital Assets
133、,9 March 2022,Congress:Responsible Financial Innovation Act(the bill),7 June 2022,FSOC:Report on Digital Asset Financial Stability Risks and Regulation,3 October 2022,FinCEN:Application of FinCENs Regulations to Persons Administering,Exchanging,or Using Virtual Currencies,18 March 2013.December 2022
134、PwC Global Crypto Regulation Report 202320PwCOn the other end of the spectrum,certain states have added incremental requirements to their money transmission regimes for digital assets.For instance,Texas requires an information security audit.New York has established a bespoke regulatory regime,the B
135、itLicense,for companies engaging in digital asset activity.Certain states permit digital asset activity to be conducted through the non-depository trust bank framework.And certain states will require a state chartered trust bank to hold an MSB authorisation in addition to the trust charter issued by
136、 another state to operate.The Federal banking regulator,the Office of the Comptroller of the Currency(OCC),has issued several legal opinions interpreting Federal banking law as permitting the provision of digital asset services.As a consequence,such service provision is also generally permissible un
137、der state regulatory regimes,as states permit,with appropriate supervisory approvals,a state chartered institution to exercise powers afforded to a similarly chartered Federal institutions(so-called wildcard or parity statutes).For instance,Texas has taken the step of issuing stand alone guidance of
138、fering a similar interpretation of state banking law to permit digital asset custody services for state banks.Financial crimeDigital asset firms are generally required to register with FinCEN and comply with AML and sanctions requirements.Both FinCEN and the Office of Foreign Assets Control(OFAC),th
139、e primary US sanctions regulator,have released guidance and taken enforcement actions for violations of the requirements.Guidance from both regulators as well as the New York State Department of Financial Services has placed emphasis on using blockchain analytics to augment know your customer(KYC),t
140、ransaction monitoring and sanctions screening programs.New York has implemented a transaction monitoring and filtering regulation,requiring covered entities to affirmatively certify compliance with the regulation on an annual basis.United States(continued)Sales and promotionFederal and state regulat
141、ors have monitored the digital asset markets and taken enforcement actions for fraudulent claims in the sales and promotion of digital assets.Over the past several years,most of these enforcement actions have been focused on claims regarding the profitability of investments,misrepresenting the natur
142、e of the asset(e.g.claiming a stablecoin is fully backed by fiat currency),and failure to disclose conflicts of interest.More recently,the focus has expanded to include misrepresentations that assets held on platform are covered by federal deposit insurance.The Securities and Exchange Commission(SEC
143、)has also more broadly focused on digital engagement practices,including the gamification of trading.Prudential treatmentPrudential treatment of digital assets has been increasingly understood to be a blind spot.While there has been movement on international prudential treatment frameworks,the US ha
144、s yet to put forward a US-specific framework.The FSOCs response to the White House Executive Order identified that the payments regime in the US lacks a resolution framework outside of the existing MSB laws,which generally do not address the orderly resolution of large,interconnected entities outsid
145、e of the bankruptcy process.While US regulated MSBs and trust banks are subject to net worth requirements,only New York State specifically imposes digital asset specific capital requirements.StablecoinsLIke digital assets more broadly,US dollar-backed stablecoins are generally treated and regulated
146、as payments instruments,issued through state chartered or licensed entities.The reserves are held in insured depository institutions,which are subject to Federal oversight.In June 2022,the New York State Department of Financial Services issued guidance for stablecoin issuers.Further information:OCC:
147、#1170 Authority of a National Bank to Provide Cryptocurrency Custody Services for Customers,22 July 2020,OCC:#1172 OCC Chief Counsels Interpretation on National Bank and Federal Savings Association Authority to Hold Stablecoin Reserves,21 September 2020,OCC:#1174 OCC Chief Counsels Interpretation on
148、 National Bank and Federal Savings Association Authority to Use Independent Node Verification Networks and Stablecoins for Payment Activities,4 January 2021,Texas Department of Banking:Authority of Texas State-Chartered Banks to Provide Virtual Currency Custody Services to Customers,10 June 2021,New
149、 York State Department of Financial Services:Guidance on Use of Blockchain Analytics,28 April 2022 and Guidance on the Issuance of U.S.Dollar-Backed Stablecoins,8 June 2022,SEC:RIN 3235-AN00,Request for Information and Comments,27 August 2021December 2022PwC Global Crypto Regulation Report 202321PwC
150、United States(continued)In November 2021,the Presidents Working Group on Financial Markets(PWG)released a report calling for Congress to pass a law requiring that stablecoins register as insured depository institutions.This would subject them to the same regulatory regime as banks,including governan
151、ce and risk management expectations,capital and liquidity requirements,and resolution planning and recovery requirements.Further reports and speeches by regulators have either echoed this recommendation,or more broadly called for Congress to pass a law bringing stablecoins into the bank regulatory f
152、old.A number of bills in Congress are taking a different approach.For instance,the RFIA would set forth 1:1 reserve requirements as well as disclosure requirements.While it does not require that all stablecoins become depository institutions,it creates a special purpose charter for stablecoins with
153、tailored requirements.Others have not required stablecoins to receive a charter,but instead set forth requirements around backing and disclosures.Stablecoins remain subject to a web of federal and state regulations,including FinCEN AML and OFAC sanctions regimes as well as scrutiny from the SEC and
154、CFTC over fraud and misconduct.Federal and state banking regulators can also use their authorities to examine banks holding fiat reserves for stablecoin issuers.Central Bank Digital Currency(CBDC)The US has not made a decision on introducing a CBDC.The Federal Reserve Bank continues to lead the work
155、 on CBDC research.In January 2022,it released a discussion paper on the pros and cons of a US CBDC that noted it would only proceed if it is determined to be in the national interest and it would seek Congressional authorisation before doing so.In November,it announced a 12-week proof-of-concept pro
156、ject to explore the feasibility of a wholesale CBDC.The March 2022 Executive Order puts the highest urgency into CBDC research.Subsequent reports suggest that the US will continue its careful research and wait-and-see approach before making any decisions.Other digital assetsRegulators are at early s
157、tages of assessing their approach to other areas of digital assets,including NFTs and wider DeFi.While NFTs may be classified as works of art,FinCENs recent treatment of the digital asset class,in its study on works of art in money laundering,indicates that they are not outside the scope for regulat
158、ory scrutiny under existing frameworks.Expected regulatory announcementsInteragency guidance on liquidity risk management by the Fed,OCC and FDIC,expected in 2023.Interagency guidance on finder activities by the Fed,OCC and FDIC,expected in 2023.Stablecoin legislation,expected in due course.Further
159、information:PWG:Report on Stablecoins,1 November 2021,The Federal Reserve:Money and Payments:The U.S.Dollar in the Age of Digital Transformation,14 January 2022,The Federal Reserve Bank:New York Innovation Center to Explore Feasibility of Theoretical Payments System Designed to Facilitate and Settle
160、 Digital Asset Transactions.15 November 2022,FinCen:Study of the Facilitation of Money Laundering and Terror Finance Through the Trade in Works of Art,4 February 2022AuthorsRobert Donovan,Managing Director,PwC US Matthew Blumenfeld,Director,PwC USDecember 2022PwC Global Crypto Regulation Report 2023
161、22PwCGovernment outlookIn October 2022,the House of Commons voted to give HM Treasury(HMT)the power to make cryptoassets a regulated financial instrument.The vote clarifies that Digital Settlement Assets can be brought within the scope of the existing provisions of the Financial Services and Markets
162、 Act 2000.If they are brought within scope,cryptoassets will be treated like other forms of financial assets,allowing HMT and the regulators to quickly respond to new developments.The new legislation is included in the Financial Services and Markets Bill 2022(FSMB),which also covers measures to brin
163、g stablecoins under the existing financial services legislation.The FSMB continues its passage through the Houses,before the expected Royal Assent in the first half of 2023.The Government intends to make the UK a global hub for cryptoasset technology and investment and consults on the proposed appro
164、ach to wider cryptoassets.Regulators remain vocal on the risks to financial stability and consumer protection.Crypto asset regulationTokens currently regulated:Security tokens which amount to a Specified Investment under the Regulated Activities Order(RAO),excluding electronic money.Electronic money
165、 tokens which meet the definition of electronic money under the Electronic Money Regulations(EMRs).Tokens currently unregulated,but could be captured under the FSMB,subject to regulatory outcomes:Other tokens,including utility tokens,which can be redeemed for access to a specific product or service.
166、Unbacked exchange tokens or cryptocurrencies,which are usually decentralised and designed to be used primarily as a medium of exchange.United KingdomRegistration/licencingSince 2020,firms undertaking certain cryptoasset activities(such as buying and selling cryptocurrencies)must comply with the Mone
167、y Laundering,Terrorist Financing and Transfer of Funds(Information on the Payer)Regulations 2017(MLRs).Firms are required to register with the Financial Conduct Authority(FCA)before conducting business or notify the regulator before a proposed acquisition of a registered cryptoasset firm.Firms that
168、undertake certain cryptoasset activities in relation to cryptoassets classified as financial instruments or electronic money must be authorised by the FCA.Financial crimeIn June 2022,HMT confirmed it would extend information sharing requirements for wire transfers(known as the Travel Rule)to include
169、 cryptoassets.From September 2023,firms will be required to collect beneficiary and originator information for transactions with an elevated risk of illicit finance,as defined in the legislation.Regulators are at early stages of assessing their approach to market abuse relating to on-chain crypto as
170、sets.Sales and promotionHMT will bring cryptoasset financial promotions in line with other financial advertising,under the Financial Promotion Order.This will apply regardless of whether financial promotions are made to retail or wholesale clients.As a result,the FCA will align its rules for qualify
171、ing cryptoassets with other highrisk investments,placing additional restrictions on firms communicating or approving relevant promotions.The FCA prohibits the sale,marketing and distribution of crypto-derivatives(excluding security tokens)to retail consumers.In March 2022,the Committee of Advertisin
172、g Practice and Advertising Standards Authority(ASA)issued an enforcement notice on advertising of cryptoassets.The ASA will report non-compliance to the FCA,Trading Standards and any other relevant professional industry body.Further information:UK Government:The Financial Services and Markets Bill,a
173、s at 28 October 2022,HMT:Government sets out plan to make UK a global crypto asset technology hub,4 April 2022,Cryptoasset Taskforce:Final Report,October 2018,HMT:Amendments to the Money Laundering,Terrorist Financing and Transfer of Funds(Information on the Payer)Regulations 2017 Statutory Instrume
174、nt 2022,June 2022,HMT:Cryptoasset promotions:Consultation response,January 2022,FCA:PS22/10:Strengthening our financial promotion rules for high-risk investments and firms approving financial promotions,01 August 2022,ASA:Enforcement Notice:Advertising of Cryptoassets:Cryptocurrencies,22 March 2022D
175、ecember 2022PwC Global Crypto Regulation Report 202323PwCExpected regulatory announcementsConsultation on proposed approach to wider cryptoassets(including extending the investor protection,market integrity,the promotion and trading of financial products to activities and entities involving cryptoas
176、sets)by HMT,expected in 2023.Final FMSB,establishing a regulatory environment for stablecoins used for payments and ensuring the Government has the necessary powers to bring a broader range of investment-related cryptoasset activities into UK regulation,expected in 2023.Final rules for cryptoasset f
177、inancial promotions by the FCA,expected in 2023.Consultations on proposed regulatory framework for systemic stablecoins,systemic wallets as well as proposed authorisation and supervision regime by the BoE,expected in 2023.Final rules on managing the failure of systemic stablecoin firms by HMT,expect
178、ed in 2023.Prudential treatmentThe Prudential Regulation Authority(PRA)acknowledges that no single part of its framework fully captures cryptoasset risks.Until an overarching framework is agreed internationally,the PRA expects firms to consider a combination of existing measures to adequately addres
179、s risks involved.According to the PRAs guidance,firms should reflect the risks posed by cryptoasset activities in their risk management frameworks,overseen by the board and senior executive management.Firms should explore using stress tests to address the uncertainties in modelling the relationship
180、between different cryptoasset exposures.The PRA also maintains that a number of aspects of the Pillar 1 framework are relevant to cryptoasset exposures.In many cases,holdings will be classed as an intangible asset and deducted from CET1.For the vast majority of cryptoasset positions,a capital requir
181、ement of 100%of the position will be appropriate.Most counterparty credit risk exposures should be mapped as other risks under the SA-CCR framework.Firms must also assess the risks posed by cryptoassets under the Pillar 2 framework.Depending on the nature of a firms activities,this should cover mark
182、et,credit,counterparty and operational risk as well as other risks not generally considered under the Pillar 2 framework.Operational risk is particularly relevant to certain cryptoasset activities,with greater risks of fraud and cyber attack.Where firms outsource certain activities,they should consi
183、der their residual liability and ability to gain control of assets.In 2022,the PRA requested regulated firms to provide information on their current and planned exposures to cryptoassets.FCA regulated firms should also assess risks posed by cryptoassets.StablecoinsThe Government announced that it wi
184、ll bring stablecoins,where used as means of payment,into the UK regulatory perimeter and make stablecoins a recognised form of payment in the UK.This will be largely done through extending the existing electronic money and payments legislation to include payments systems and service providers using
185、stablecoins.The framework will only apply to fiat backed stablecoins.United Kingdom(continued)The amendments will give the FCA powers to establish an authorisation and supervision regime for stablecoins.The Bank of England(BoE)will supervise systemic stablecoins and payment systems.Stablecoins used
186、in systemic payment chains will be required to meet the same standards as commercial bank money and will need to be backed with high-quality and liquid assets(including central bank reserves),as well as loss absorbing capital as necessary.Central Bank Digital Currency(CBDC)The BoE and HMT continue t
187、o lead the work on CBDC research,consulting on the case for a potential retail CBDC.No decision has been made to introduce a UK CBDC.Further information:PRA:Existing or planned exposure to cryptoassets,24 March 2022,HMT:UK regulatory approach to cryptoassets,stablecoins,and distributed ledger techno
188、logy in financial markets,April 2022,BoE:Reflections on DeFi,digital currencies and regulation,21 November 2022,BoE:UK central bank digital currency,accessed 12 December 2022December 2022PwC Global Crypto Regulation Report 202324AuthorsAndrzej Wieckowski,Director,PwC UK Laura Talvitie,Senior Manager
189、,PwC UK PwCFinancial crimeDigital currency exchange providers are required to register with the Australian Transaction Reports and Analysis Centre(AUSTRAC)and implement KYC policies,report suspicious transactions and comply with the existing AML legislation.A bespoke licensing and custody regime for
190、 digital asset firms is in development.Home Affairs and AUSTRAC continue to work with the industry on implementation of the FATF Standards,including the Travel Rule.Sales and promotionNo specific guidance is in place for the sale and promotion of digital assets.ASIC provides guidance on how existing
191、 financial services laws apply to social media influencers who discuss financial products and services online as well as information for Australian Financial Services(AFS)licensees who use an influencer.AFS licensees planning to offer digital asset must also comply with product design and distributi
192、on obligations,which requires the firm to consider any sales and promotion activity in line with its target market determination.In October 2022,ASIC placed an interim stop order on a group of crypto funds highlighting it was to protect retail investors from potentially investing in funds that may n
193、ot be suitable for their financial objectives,situation or needs.Prudential treatmentIn April 2021,the Australian Prudential Regulation Authority(APRA)issued a letter to regulated entities outlining its risk management expectations and a policy roadmap for crypto assets.These include a strong focus
194、on operational and technology risk management as well as on comprehensive due diligence,risk assessment and risk controls ahead of engaging in crypto activities.The APRA plans to consult on prudential treatment of crypto assets in 2023,implemented in 2025.Government outlookIn December 2021,the Austr
195、alian Government agreed to establish regulatory regimes for digital assets.These included a licencing and custody regime,decentralised autonomous organisations structures,reviewing the policy framework for digital assets taxation,token mapping and research on a potential CBDC viability.In March 2022
196、,as part of a Treasury consultation,the key digital asset regulatory objectives were set as:ensuring that regulation is fit for purpose,technology neutral and risk-focussed.creating a predictable,light touch,consistent and simple legal framework.avoiding undue restrictions.recognising the unique nat
197、ure of crypto assets.harnessing the power of the private sector.In May 2022,Australia elected a new Government,which has resulted in a slightly amended course to one agreed by the former government,impacting the previously set timing and path to establishing the proposed regulatory regimes.The new G
198、overnment will consult on token mapping,with a purpose of identifying notable gaps in the regulatory framework,progress work on a licensing framework,review innovative organisational structures,look at custody obligations for third party custodians of crypto assets and provide additional consumer sa
199、feguards.Crypto assets regulationThere is no bespoke regulatory framework for digital assets,unless the assets are caught through existing rules which apply to financial products and general consumer law.Australian Securities and Investments Commission(ASIC)identifies crypto assets as one of its cor
200、e strategic projects and will continue to support the development of an effective regulatory framework,with a focus on consumer protection and market integrity.AustraliaFurther information:Australian Government:Transforming Australias Payment System,December 2021,ASIC:Corporate Plan 2022-26,August 2
201、022,AUSTRAC:Digital currency exchange providers,accessed 12 October 2022,ASIC:Information Sheet 269,March 2022,APRA:Crypto-assets:Risk management expectations and policy roadmap,21 April 2022December 2022PwC Global Crypto Regulation Report 202325PwC26StablecoinsIn September 2022,a draft bill titled,
202、Digital Assets(Market Regulation)Bill was published for parliamentary debate and public consultation on digital assets,including stablecoins.It proposes stablecoin issuers to hold Australian or foreign currency in reserve in an Australian bank and regularly report on the assets held in reserve to th
203、e APRA.In its December 2022 report,the Reserve Bank of Australia published stablecoin market,risks and regulation.It confirms that the development of a regulatory framework for payment stablecoins is a near-term priority for the Council of Financial Regulators.Central Bank Digital Currency(CBDC)In S
204、eptember 2022,the Reserve Bank of Australia(RBA)issued a white paper on a potential Australia CBDC.The RBA will launch a pilot project with selected uses cases in early 2023.The report on findings is expected in mid 2023.The consultative Digital Assets(market regulation)Bill proposed to establish di
205、sclosure requirements for facilitators of the e-Yuan(Mainland China CBDC)in Australia.Australia(continued)December 2022Further information:Senator Bragg:Digital Assets(Market Regulation)Bill,19 September 2022,Reserve Bank of Australia:Stablecoins:Market Developments,Risks and Regulation,8 December 2
206、022Expected regulatory announcementsConsultation on token mapping by the Treasury.Consultation on new corporate structures,including decentralised autonomous organisations by the Treasury.Legislation on Crypto Asset Secondary Service Providers(CASSPrs)Licensing and Custody Requirements.Consultation
207、on the prudential treatment of crypto assets by the APRA.Next steps on the consultative Digital Assets(Market Regulation)Bill.Including proposed requirements on stablecoins,licencing requirements and e-Yuan by the Parliament.Next steps on the Board of Taxation consultation on the review of tax treat
208、ment of Digital assets and transactions in Australia.Findings from the CBDC pilot project by the RBA.AuthorSagan Rajbhandary Director,PwC Australia Firms waiting for regulatory clarity are likely to be left behind by those forging ahead and pro-actively providing stakeholders with assurance over the
209、ir governance,risk management and transparency,using both traditional methods as well as real time on-chain evidence.Sagan RajbhandaryDirector,Crypto AssetsPwC AustraliaPwC Global Crypto Regulation Report 2023PwCGovernment outlookAustrian law does not provide for a dedicated crypto asset regulation.
210、The Financial Market Authority(FMA),Austrias financial regulator,has positioned itself as neutral when it comes to business models related to crypto assets and new technologies.It follows the EU approach of technology neutrality.In general,crypto assets and related business models are not prohibited
211、.The FMA does not regard every crypto assets as a currency or security.However,it points out that a final regulatory assessment is subject to the concrete business model.Depending on the features of a crypto asset(e.g.Payment Token,Security Token,Utility Token)the existing regulatory regime may appl
212、y(e.g.PSD II,E-Money Act,MiFID II).Crypto asset regulationWhile crypto assets are not specifically regulated by Austrian law,the FMA points out that crypto assets can be categorised,for example,as financial instruments or electronic money,and relevant business models may constitute a regulated activ
213、ity,including a banking activity or payment service.Registration and financial crimeSince January 2020,all crypto asset service providers(as defined in the law)must comply with the Austrian AML Act.In particular,they must register with the FMA and are subject to the due diligence and reporting oblig
214、ations set out in the Austrian AML Act.In October 2022,the European Commission published its supranational risk assessment report on money laundering and terrorist financing affecting the internal market and relating to cross-border activities.The report emphasises the risks associated with crypto a
215、ssets as well as calls for ensuring a high level of consumer and investor protection,market integrity and measures to prevent market manipulation and money laundering and terrorist financing activities.Sales and promotionNo specific guidance is in place for the sale and promotion of crypto assets.Ch
216、anges are likely to occur,with the adoption of MiCA at the EU-level.Prudential treatmentThere are no specific prudential requirements in place for crypto assets.These are likely to be defined in the future,in accordance with the Basel Committee on Banking Supervisions expectations.StablecoinsNo spec
217、ific framework is adopted for stablecoins and the existing regulatory regime applies(especially the Austrian E-Money Act).Changes will occur,with the adoption of MiCA at the EU-level.Other digital assetsRegulators are at early stages of assessing their approach towards wider digital assets.The work
218、will be directed by the adoption of MiCA and the DLT Pilot Regime at the EU-level.Central Bank Digital Currency(CBDC)The Austrian National Bank(OeNB),together with a number of other financial institutions,continues to actively monitor and participate in the digital Euro project.27December 2022PwC Gl
219、obal Crypto Regulation Report 2023Further information:Financial Market Authority Austria:FinTech Navigator,accessed on 20 October 2022,European Commission:Report on the assessment of the risk of money laundering and terrorist financing affecting the internal market and relating to cross-border activ
220、ities,27 October 2022Expected regulatory announcementsImplementation of MiCA and the proposed new AML/CTF legislative package with other EU Member States,upon the entry into force.AuthorsIrene Eckart,Director,PwC Legal Business Solutions,ACarina Wolf,Senior Manager,PwC Legal Business Solutions,AAust
221、riaPwCGovernment outlookThe Digital Asset and Registered Exchanges Act,2020(DARE)was enacted in The Bahamas in December 2020.DARE creates a legal framework to regulate the issuance,sale and transfer of digital assets,such as crypto assets,in or from within The Bahamas.The Digital Assets and Register
222、ed Exchanges(Anti-Money Laundering and Countering Financing of Terrorism and Countering Financing of Proliferation)Rules,2022(Rules)was subsequently enacted in March 2022,to provide AML rules for digital assets businesses.In April 2022,the Government issued a Policy White Paper on Future Digital Ass
223、ets to clarify and expand on the scope of the legislative framework for digital assets operations in or from within the jurisdiction.The paper identifies nine key objectives,including:To explore new opportunities in a rapidly and continuously evolving digital asset landscape,including developments i
224、n DeFi,NFTs,stablecoins and asset-referenced tokens.To improve the attractiveness of The Bahamas as a well-regulated jurisdiction where well-run digital asset businesses,of any size,can operate,grow,and prosper.To encourage innovation in the FinTech space and identify emerging technologies that woul
225、d help maintain The Bahamas competitive advantages.To explore linkages between The Bahamas existing financial services toolkit(i.e.corporate and fiduciary services)to facilitate continued innovation in the international financial services sector.Where necessary,to clarify and expand the scope of the
226、 legislative framework,generally,and DARE,in particular,to continue to safely regulate digital assets and digital asset businesses.DARE and the Rules were drafted to ensure harmonisation of existing domestic laws and enhance the legislative and regulatory framework needed for the administration of d
227、igital assets business activity in the jurisdiction.The Securities Commission of The Bahamas(Commission)regulates,monitors,and supervises the issuance of digital assets and persons conducting digital asset businesses in the jurisdiction.It is tasked with developing rules and codes of practice for th
228、e conduct of digital assets businesses and initial token offerings.In addition,the Commission is empowered under DARE to suspend or revoke registration,inspect and investigate and impose administrative sanctions for non-compliance.The Digital Assets Policy Committee was established to ensure the imp
229、lementation of the Governments policy objectives as well as an effective intra-governmental collaboration.Crypto asset regulationDigital asset businesses regulated under DARE includes(i)business of a digital token exchange,(ii)providing services related to a digital token exchange,(iii)operating as
230、a payment service provider,including providing DLT platform that facilitates the exchange between digital assets and fiat currencies,the exchange between one or more forms of digital assets,assets and the transfer of digital asset,(iv)participation in and provision of financial services related to a
231、n issuers offer or sale of a digital asset,and(v)any other activity provided under regulations.DARE defines a digital asset as a digital representation of value through a DLT platform where value is embedded,or in which there is a contractual right of use and includes without limitation digital toke
232、ns(e.g.virtual currency token,asset token,utility token,non-fungible token and any other digital representation of value designated by the Commission to be a digital token under DARE).28December 2022PwC Global Crypto Regulation Report 2023Further information:Securities Commission of The Bahamas:DARE
233、 Act and Rules,Government of The Bahamas White Paper Policy:The Future of Digital Assets in The Bahamas,20 April 2022The BahamasPwCRegistration/licencingAny person desirous of engaging in digital assets business(which include crypto assets)in or from within The Bahamas must register with the Commiss
234、ion under DARE.DARE applies to any legal entity carrying on business in The Bahamas,regardless of its physical location.For the purposes of DARE,legal entity is defined to include an incorporated,established or a registered Bahamas Company.Application forms must be completed for the legal entity,fou
235、nder,beneficial owner,security holder,director and/or officer and Chief Executive Officer and Compliance Officer respectively.The applications should be accompanied with all relevant supporting documentation which includes the legal entitys constitutive documents and evidence of good standing and fu
236、ll identification of key investors,and designation of key senior personnel.An existing registrant of the Commission intending to provide digital asset business services will be required to submit a simplified application form for approval before commencing operations of the new activity.Financial cr
237、imeDARE has brought digital assets business under the national AML/CFT risk coordination framework,and includes provisions related to the Financial Action Task Forces(FATF)Recommendation 15(AML/CFT).Digital assets businesses are therefore required to implement systems which can prevent,detect and di
238、sclose money laundering,terrorist financing and suspicious transactions pursuant to the Proceeds of Crime Act,2018(POCA),Anti-Terrorism Act,2018(ATA)and Financial Transactions Reporting Act and Regulations(FTRA).This includes 1)implementing a risk rating framework to assess its customers and busines
239、s;2)maintaining internal control procedures including suspicious transaction reporting;3)maintaining customer identity verification,including third party verification and eligible introducers;and record keeping;and 4)relying on third party verification procedures implemented by another regulated vir
240、tual asset service provider or financial institution in an approved jurisdiction.Sales and promotionDARE prohibits any person from carrying on or being involved in a digital assets business or offering services as a digital token exchange without being registered by the Commission.Registrants engagi
241、ng in the sale,exchange or transfer of digital assets must ensure that it conducts AML/CFT risk assessment for compliance with POCA,ATA and FTRA,as well as the Rules.StablecoinsIn September 2022,the Commission announced proposed amendments to DARE and the Rules to address,among other things,the requ
242、irement for a supervisory framework for derivatives of crypto assets as well as enhanced disclosure requirement for stablecoins.Central Bank Digital Currency(CBDC)In 2020,the Central Bank of The Bahamas issued the digital Bahamian Dollar Currency,known as the Sand Dollar.The Sand Dollar is one of th
243、e first live CBDCs in the world.29December 2022PwC Global Crypto Regulation Report 2023Further information:Proceeds of Crime Act,2018(POCA);Anti-Terrorism Act,2018(ATA);Financial Transactions Reporitng Act and Regulationns 2018(as amended in 2022 and 2021 respectively)(FTRA);The Central Bank of The
244、Bahamas.The Bahamas(continued)AuthorsPrince A.Rahming,Partner,PwC B Rochelle M.Sealy,Senior Manager,PwC B PwCGovernment outlookThe Canadian regulatory landscape is open to innovation,as long as the right safeguards are in place.Central to this approach is the Canadian Securities Administrators(CSA)R
245、egulatory Sandbox.It was designed to support fintech businesses seeking to offer innovative products,services and applications in Canada.It allows firms to register and/or obtain exemptive relief from securities laws requirements,under a fast and flexible process.The purpose is to allow firms to tes
246、t their products,services and applications throughout the Canadian market on a time limited basis.At least ten crypto asset trading platforms have received exemptive relief to offer crypto products to investors through the Sandbox,with more expected.Canada has issued at least around 40 crypto exchan
247、ge traded funds(ETF).Authorities favour approach where the crypto industry is regulated in a similar way than other asset classes,enabling the right safeguards and custody solutions to be in place to protect investors and consumers.Crypto asset regulationIn November 2022,the Federal Government annou
248、nced a legislative review,focused on the digital money and financial sector stability and security.With this,the Government launched a consultation on digital currencies,including stablecoins and central bank digital currency(CBDC).The CSA and the Investment Industry Regulatory Organization of Canad
249、a(IIROC)oversees the securities legislation and how it applies to crypto asset trading platforms,including the registration through the Regulatory Sandbox.In August 2022,the CSA provided guidance relating to crypto asset trading platforms which operate in Canada,but are not registered with their pri
250、ncipal regulator.In order to continue operations,the crypto trading platform must sign a pre-registration to their principal regulator that addresses investor protection concerns.The recent announcements are expected to narrow the gap between regulated and unregulated platforms,operating in Canada.P
251、rudential treatmentIn August 2022,the Office of the Superintendent of Financial Institutions(OSFI)announced its interim approach for crypto assets held by federally regulated financial institutions.OSFI expects crypto assets to be managed prudently,setting limits on their use by banks and insurers.T
252、he guidance closely follows the Basel Committee on Banking Supervisions guidance on crypto asset exposures.Financial crimeMoney Service Businesses participating in virtual currency transactions are required to report suspicious money transactions to Financial Transactions and Reports Analysis Centre
253、 of Canada.Firms must complete KYC verification,when exchanging or transferring money.The rules extend to requirements to maintain and submit transaction records for virtual currency transactions over$10,000 CAD in a single or multiple transactions over a 24 hour period.Sales and promotionIn Septemb
254、er 2021,the CSA and IIROC issued joint guidance relating to the advertising,marketing and social media use for crypto trading platforms,raising concerns over false or misleading advertising as well as compliance and supervisory challenges.Stablecoins and Central Bank Digital CurrencyIn November 2022
255、,the Federal Government launched a consultation on digital currencies,including stablecoins and CBDC.The Bank of Canada continues to actively research,prepare and consult on the case of a potential CBDC.The formal position remains that there is no need to issue a CBDC at the moment.30CanadaDecember
256、2022Further information:Government of Canada:Fall Economic Statement 2022,3 November 2022,CSA:CSA Regulatory Sandbox,accessed 24 October 2022,OSC:Joint Canadian Securities Administrators/Investment Industry Regulatory Organization of Canada Staff Notice 21-329 Guidance for Crypto-Asset Trading Platf
257、orms,29 March 2021,OSC:Canadian securities regulators expect commitments from crypto trading platforms pursuing registration,15 August 2022,OSC:Buyer Aware:applying essential protections to the crypto world,6 October 2022,OSFI:Interim approach to crypto assets,18 August 2022,Government of Canada:Rep
258、orting large virtual currency transactions to FINTRAC,1 June 2021,OSC:Canadian securities regulators outline expectations for advertising and marketing by crypto trading platforms,23 September 2021,Bank of Canada:Central bank digital currency(CBDC),accessed on 24 October 2022AuthorRyan Leopold,Partn
259、er,PwC CPwC Global Crypto Regulation Report 2023PwCSales and promotionNo specific guidance is in place for the sale and promotion of crypto assets.Changes are likely to occur,with the adoption of MiCA at the EU-level.Prudential treatmentThere are no specific prudential requirements in place for cryp
260、to assets.These are likely to be defined in the future,in accordance with the Basel Committee on Banking Supervisions expectations.StablecoinsNo regulatory framework is adopted for stablecoins.These will be defined with the adoption of MiCA at the EU-level.Central Bank Digital Currency(CBDC)The Nati
261、onal Bank of Denmark has not made a decision to issue a CBDC.It continues to monitor closely especially wholesale CBDC developments and actively participates in international CBDC working groups.Denmark is not part of the Eurozone.31Government outlookThe Danish Financial Supervisory Authority(DFSA)h
262、as a cautious view on crypto assets and investment,reminding consumers that their investments may not be protected.The ownership or trading of crypto assets is not prohibited.The Danish Financial Business Act does not regard crypto assets as a currency or security and only financial instruments and
263、services are covered by the regulation.As a result,very little regulation for digital assets is currently in place.Changes will occur,with the adoption of MiCA at the EU-level.Crypto asset regulationWhile crypto assets are not regulated by the DFSA,regulators have not excluded the possibility of iso
264、lated instances where the nature of certain assets,based on a specific assessment,can be regarded as financial instruments.Registration/licencingExchange and transfer providers,eWallet providers and issuers of virtual currencies must be registered with the DFSA for AML purposes.Firms must comply wit
265、h the provisions set out in the Danish AML Act.Financial crimeVirtual wallets and providers of exchange between one or more types of virtual currencies are covered by the Danish AML Act.Therefore,businesses providing this kind of services must comply with the provisions set out in the regulation,inc
266、luding KYC checks and suspicious reporting.In October 2022,the European Commission published its supranational risk assessment report on money laundering and terrorist financing affecting the internal market and relating to cross-border activities.The report emphasises the risks associated with cryp
267、to assets and calls for ensuring a high level of consumer and investor protection and market integrity as well as measures to prevent market manipulation,money laundering and terrorist financing.DenmarkDecember 2022Further information:Danmarks Nationalbank:Analyse Nye former for digitale penge,June
268、2022,European Commission:Report on the assessment of the risk of money laundering and terrorist financing affecting the internal market and relating to cross-border activities,27 October 2022Expected regulatory announcementsImplementation of MiCA and the proposed new AML/CTF legislative package with
269、 other EU Member States upon their entry into force.AuthorsJanus Mens,Partner,PwC DSine Bak Josefsen,Senior Manager,PwC D PwC Global Crypto Regulation Report 2023PwC32EstoniaDecember 2022Government outlookThe Estonian Government encourages innovation in the financial services sector.The strategy pla
270、n of the Estonian Financial Supervision and Resolution Authority(EFSRA)for 2022-2025 includes plans to introduce a possibility to obtain authorisation with secondary conditions to encourage development of technologically innovative business models,including the sector of crypto assets.EFSRA is respo
271、nsible for the financial services market regulation and supervision.The Financial Intelligence Unit(FIU)supervises the activities of Virtual Asset Service Providers(VASPs),requiring an activity licence.While crypto assets are treated in a technology-neutral manner under the securities laws,virtual a
272、ssets(and activities of VASPs)are considered under a special regime in accordance with the Money Laundering and Terrorist Financing Prevention Act(AML Act).The attitude of the Government and regulators has grown increasingly cautious towards crypto asset activities within financial services.This is
273、due to possible money laundering in the sector and an EU-wide approach to further regulate the activities of relevant companies.Crypto asset regulationCrypto assets are treated as property under Estonias Law of Obligations Act.The purchase and sales of virtual currencies may be subject to AML regula
274、tion.Authorisation by the FIU is required to operate in the area of providing a virtual currency service.Treatment of Initial Coin Offerings(ICO)is subject to requirements based on the legal nature of the token offered as part of the ICO.Where the token is deemed to qualify as a security,the provisi
275、ons of the Estonian Securities Market Act and the relevant EU legislation apply.Token issuers may be subject to the requirements of the Credit Institutions Act and the relevant activity licence.The issuer may also need to obtain an activity licence from the EFSRA,under the Credit Institutions Act.De
276、pending on the structure and purpose of the ICO,it may also be subject to the requirements set out in the Investment Funds Act.Changes to the ICO regime are expected with the adoption of MiCA at the EU-level.Registration/licencingProvision of financial services,deposit and lending services,and/or el
277、ectronic money services with crypto assets is subject to the requirement to receive the relevant activity licence from the EFSRA.VASPs are under an obligation to hold an activity licence issued by the FIU under the AML Act and therefore to receive authorisation from the FIU to provide virtual curren
278、cy wallet services,virtual currency exchange services,virtual currency transfer services and virtual currency issuance services.Financial crimeVASPs are required to hold an activity licence issued by the FIU and comply with the provisions set out in the AML Act akin to financial institutions.Since M
279、arch 2022,VASPs are also subject to further prudential requirements,a mandatory obligation for auditing of annual accounts and heightened requirements in respect of the companys seat,place of business,members of the management board and compliance officer.In October 2022,the European Commission publ
280、ished its supranational risk assessment report on money laundering and terrorist financing affecting the internal market and relating to cross-border activities.The report emphasises the risks associated with crypto assets and calls for ensuring a high level of consumer and investor protection and m
281、arket integrity as well as measures to prevent market manipulation,money laundering and terrorist financing.Sales and promotionGeneral rules apply for the sale and promotion of financial services making use of crypto assets,based on Estonias Advertising Act and depending on the services provided.Fur
282、ther information:Financial Supervision and Resolution Authority:Innovation Hub,November 2022,European Commission:Report on the assessment of the risk of money laundering and terrorist financing affecting the internal market and relating to cross-border activities,27 October 2022PwC Global Crypto Reg
283、ulation Report 2023PwC33December 2022Prudential treatmentThere are no specific prudential requirements in place for crypto assets.These are likely to be defined in the future,in accordance with the Basel Committee on Banking Supervisions expectations.The share capital of a VASP must be:at least 100,
284、000 euros to provide virtual currency wallet services,virtual currency exchange services or virtual currency issuance services.at least 250,000 euros to provide virtual currency transfer services.Specific requirements for own funds are stipulated in the AML Act,based on the services which the VASP p
285、rovides.If the VASP provides virtual currency wallet services or virtual currency issuance services,the own funds of the VASP must not be less than 25 per cent of the fixed overhead costs of the previous financial year.If the VASP only provides virtual currency exchange service or virtual currency t
286、ransfer service,its own funds must at least be equal to the sum of the part-volumes of the volume of transactions carried out in the framework of providing the service,as prescribed in the AML Act.StablecoinsNo regulatory framework has been adopted to specifically target stablecoins.These will be de
287、fined with the adoption of MiCA at the EU-level.Where stablecoins are considered to be electronic money under the Payment Institutions and E-money Institutions Act or securities under the Securities Market Act,an issuer may be required to hold a licence.Central Bank Digital Currency(CBDC)The Bank of
288、 Estonia,together with a number of other financial institutions,continues to actively research and participate in the digital Euro project.Other digital assetsDepending on the token,NFTs could be subject to the Law of Obligations Act or qualify as securities under the securities laws.Expected regula
289、tory announcementsImplementation of MiCA and the proposed new AML/CTF legislative package with other EU Member States upon their entry into force.Adoption of a new legislation on crowdfunding and other investment instruments and virtual currencies.Further information:Regulation(EU)2017/1129 of the E
290、uropean Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market,and repealing Directive 2003/71/EC,Proposal for a Regulation of the European Parliament and of the Council on Markets in Cryp
291、to-assets and amending Directive(EU)2019/1937,Financial Supervision and Resolution Authority:Technical Regulatory Authority:Nuded finantsteenuse reklaamile,10 June 2017,Regulation(EU)no.575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and inve
292、stment firms and amending Regulation(EU)No 648/2012AuthorsPriit Ltt,Director,PwC EKirill Leeiko,Senior Manager,PwC E PwC Global Crypto Regulation Report 2023Estonia(continued)PwC34Government outlookFrance has put in place a regulatory framework specific to digital assets,with the Blockchain Order an
293、d the Pacte Law.Changes will occur in the future,with the adoption of MiCA.Crypto asset regulationRegulated assetsThe French Monetary and Financial Code(CMF)identifies three categories of digital assets:Utility tokens,any intangible asset representing,in digital form,one or more rights that can be i
294、ssued,registered,retained or transferred by means of a shared electronic recording device which allows the owner of the asset to be identified,directly or indirectly.This definition does not include tokens which have the characteristics of financial instruments and saving notes.Payment tokens or cry
295、ptocurrencies,any digital representation of value which is not issued or guaranteed by a central bank or public authority,is not necessarily attached to legal tender and does not have the legal status of money,but is accepted by natural or legal persons as a medium of exchange and can be transferred
296、,stored or exchanged electronically(this includes cryptocurrencies such as bitcoin and ether).Security tokens,since the Blockchain Order,French law has authorised the registration of financial securities,not admitted to the operations of a central depository,in an electronically shared registration
297、device such as the blockchain.Subject to certain conditions,some security tokens are accordingly recognised in France as financial instruments,the issuance of which is governed by financial securities law and prospectus regulations.Unregulated assets:NFTs which are similar to utility tokens,are excl
298、uded from the scope of any regulation.The French definition of a token and digital assets does not include a criteria on fungibility.An NFT can be qualified as a utility token in the CMF.The French financial markets authority(AMF)excludes NFTs from the regulation on utility tokens,due to their non-f
299、ungible nature which makes it impossible to trade them on a secondary market.FranceDecember 2022Regulated activitiesOn the primary market,French law regulates:-the registration of financial securities not admitted to the operations of a central depository,in an electronically shared registration dev
300、ice such as the blockchain.Such registration has the same legal effects as a registration of financial securities in an account held by a custody account keeper,particularly in terms of proof of ownership of the securities.-the issuance of utility tokens and Initial Coin Offering(ICO)is subject to a
301、n optional visa(approval)from the AMF.On the secondary market,the Loi Pacte provides a framework for the provision of digital asset services by Digital Asset Service Providers(DASPs).Digital asset services include:the safekeeping of digital assets on behalf of third parties and access to digital ass
302、ets,the purchase or sale of digital assets in legal tender,the exchange of digital assets for other digital assets,the exploitation of a trading platform for digital assets,and the following services:reception and transmission of orders on digital assets on behalf of third parties.portfolio manageme
303、nt of digital assets on behalf of third parties.advice to the subscriber of digital assets.underwriting of digital assets.Further information:Order n2017-1674 of 8 December 2017 on the use of a shared electronic recording device for the representation and transmission of financial securities(the Blo
304、ckchain Order),Law n2019-486 of 22 May 2019 on the growth and transformation of firms(Pacte law Loi Pacte)PwC Global Crypto Regulation Report 2023PwC35Registration&Authorisation1)In France,DASPs offering custody(1),purchase or sale(2),exchange of digital assets services(3)and/or exploiting a digital
305、 asset trading platform(4)must be registered with the French AMF.The extension of the registration requirement to service 3)and 4)was introduced by the Order n 2020-1544 of 9 December 2020.Before registering,the AMF will verify in particular that:The persons who effectively manage the DASP have the
306、necessary good repute and competence to carry out their functions,Individual shareholders(holding more than 25%of the providers capital or voting rights)guarantee the prudent and proper management of the provider,are of good repute and have the necessary skills,DASPs providing services 1)and 2)have
307、set up an organization,procedures and an internal control system to ensure compliance with AML/CFT provisions(the compliance of DASPs providing services 3)and 4)in terms of internal control and AML/CFT is the result of a posteriori controls by the AMF)The AMF must obtain the approval of the ACPR bef
308、ore proceeding with registration.2)DASPs may also(optionally)request for a specific licence from the AMF which licence entails additional organizational and conduct of business requirements for this category of DASPs,which are not applicable to registered DASPs only.Financial crimeAML/CFT rulesThrou
309、gh the Loi PACTE,France has transposed the 5th EU AML/CFT Directive and extended AML/CFT obligations to registered and licensed digital asset service providers,as well as to issuers of tokens whose ICO has been approved by the AMF.France(continued)December 2022However,since 2020,only DASPs providing
310、 custody and purchase-sale services of digital assets in legal tender,are subject to an a priori control,at the time of their application for registration,regarding their ability to comply with their AML/CFT obligations.The elements relating to risk classification,identification,verification of iden
311、tity and knowledge of the client,enhanced examinations,suspicious transaction reports and asset freezing are verified.This a priori verification does not cover the internal control system,the methods of training of the employees,document retention or outsourcing,as well as additional vigilance measu
312、res.Other DASPs,offering exchange services or operating a trading platform for digital assets,are subject to an a posteriori control of the respect of their obligations in terms of AML/CFT.Travel ruleFrance also implemented travel rule requirements as derived from the FATF Recommendation n16 which a
313、imed at ensuring the traceability of crypto-asset transfers at all times.Indeed,under French law,digital asset service providers(both registered and licensed)as well as token issuers must identify:usual customers and,where applicable,beneficial owners before entering into a business relationship.occ
314、asional customers and,if applicable,the beneficial owners before any transaction,even if there is no suspicion regarding the transaction.In this case,DASPs identify and verify the identity of their occasional customer and,where applicable,the beneficial owner,under the same conditions as those requi
315、red for the customer and the beneficial owner in a business relationship.Since the entry into force of the Decree n2021-387 of 2 April 2021,this obligation applies to all transactions on digital assets,the requirement to exceed a threshold of 1000 having been repealed.Further information:Order n2017
316、-1674 of 8 December 2017 on the use of a shared electronic recording device for the representation and transmission of financial securities(the Blockchain Order),Law n2019-486 of 22 May 2019 on the growth and transformation of firms(Pacte law Loi Pacte)PwC Global Crypto Regulation Report 2023PwC36Fi
317、nancial promotion The distribution to individuals or legal entities of simple advertising information,excluding any contractual or pre-contractual document,regardless of the medium,is not subject to the rules on banking and financial promotion.However,unsolicited contact with a natural or legal pers
318、on in order to obtain their agreement to provide a service,or participate in a transaction,relating to a digital asset(e.g.ICO)is subject to banking and financial promotion rules.In this context,only token offerings that have been approved by the AMF may give rise to financial promotion/customer sol
319、icitation.Also,only the following entities can promote digital asset services to customers:Issuers of tokens which have obtained the AMFs approval or licensed DASPs(only i.e.merely registered DASPs are not eligible).Regulated financial services providers:credit institutions or finance companies,elec
320、tronic money institutions,payment institutions,investment firms and insurance companies,occupational pension funds,venture capital companies,investment management companies,financial investment advisors,intermediaries in banking and payment services,tied agents,providers of participative financing s
321、ervices.Prudential requirementsLicensed DASPs(only)must at all times have capital in an amount that corresponds at least to the highest of the following capital calculation methods:1)overheads-based,2)based on minimum capital or 3)based on the DASPs activity level.The minimum capital requirement for
322、 a DASP is:50,000 for the provision of legal tender digital asset purchase-sale services and digital asset exchange services.150,000 for the provision of other digital asset services.Licensed DASPs must justify an amount of equity permanently higher than 4.5%of the assets they hold for their own acc
323、ount.France(continued)December 2022StablecoinsFrench law does not recognise the category of stablecoins.An information report on the implementation of the conclusions of the information mission dedicated to crypto-assets was submitted by the French committee on finance,general economy and budgetary
324、control,to the French National Assembly in December 2021.The report identifies stablecoins as one of the new regulatory challenges in the face of rapid changes in the digital assets sector.Central Bank Digital Currency(CBDC)Several international initiatives are underway under the supervision of the
325、Banque de France for a potential digital Euro.Further information:Law n2019-486 of 22 May 2019 on the growth and transformation of firms(Pacte law-Loi Pacte),AMF:Instruction DOC-2019-23,Rules applicable to digital asset service providers,last update 23 April 2021,General speech of Franois Villeroy d
326、e Galhau,Governor of the Banque de France,during the Paris Europlace International Financial Forum 2022,12 July 2022Expected regulatory announcementsImplementation of MiCA with other EU Member States upon its entry into force,with some EU driven provisions being more stringent than the current Frenc
327、h law provisions(e.g.in respect of DASPs).AuthorsNicolas Mordaunt-Crook,Partner,PwC Legal Business Solutions,Francenicolas.mordaunt-PwC Global Crypto Regulation Report 2023Maximilien Jatteau,Senior Manager,PwC Legal Business Solutions,F PwCGovernment outlookGermanys Federal Financial Supervisory Aut
328、hority(BaFin),the national competent authority(NCA)responsible for financial services regulation and supervision,has since 2013 been working with the German legislator to ensure the country is attractive for market participants engaging in crypto assets,blockchain,distributed ledger technology and D
329、eFi(collectively digital finance),provided certain safeguards are met.The German legislator,together with the BaFin,has made targeted amendments to the general regulatory and supervisory framework to accommodate digital finance in a technology neutral manner.This includes amending existing regulated
330、 activity permissions and introducing new licensing requirements.The issuance,trading,custody,reporting and client facing disclosure are applied to digital finance activity.Various types of tokens and business models are subject to differing degrees of application of capital markets,banking,financia
331、l services,AML and financial crime prevention measures and other laws.The German Act on Electronic Securities(eWpG)has equally clarified the use of digital registers(including blockchain based systems)for dematerialised securities including tokens.BaFin has issued guidance which further clarifies bo
332、th EU and German regulations and supervisory expectations.Changes will occur in the future,with the adoption of MiCA.Crypto asset regulationThe German Banking Act(KWG)and the German Securities Institution Act(WpIG)are the core pillars of Germanys general regulatory structure for banking,financial an
333、d investment services and authorisation requirements depending on the assets and regulated business activity conducted.Crypto assets which meet the definition in the acts,*are regulated instruments and treated as financial instruments under the legislative and regulatory regime.Crypto assets include virtual currencies,but not government issued virtual currencies,electronic money or certain monetar