As Russia’s self-styled “special operation” against Ukraine continues, crippling economic sanctions remain Western powers’ main weapon to counter Russia’s military actions without triggering an even more dramatic escalation.. as it unfolds financial offensive by NATO and its allies, ensuring that the collective West presents a united front remains the main concern of political leaders. The global cryptocurrency industry continues to draw suspicious glances as some state power brokers appear entrenched in their belief that digital assets could be the weak link undermining the effectiveness of the sanctions push. Despite abundant evidence to the contrary, including testimony by the FBI director in Congress, there are signs of increased regulatory pressure on participants in the cryptocurrency industry, as well as political initiatives that are clearly taking advantage of the situation to tighten state control over the circulation of digital assets.
Few of those who follow the evolution of the crypto-political space were surprised to learn that United States Senator Elizabeth Warren was hard at work drafting a bill that would impose additional disclosure requirements on cryptocurrency exchanges. According to some observers, the military conflict could also have contributed to US President Joe Biden finally authorizing the long-awaited executive order on digital currencies.
A whole-of-government effort is mandated
There are two mutually exclusive views on the relationship between the timing of Biden’s executive order and the war in Ukraine. One is that the directive was set to be issued in mid- to late-February and that the administration’s concern over the conflict delayed its release by several weeks. Another is that concern about the application of sanctions against Russia caused the early publication of the document that could otherwise have remained on the president’s desk for longer.. In any case, the long-awaited OE hit the cryptocurrency industry with a globally favorable reception. Many industry stakeholders and advocates were generally satisfied with the lack of restrictive language or superfluous emphasis on the risks associated with cryptocurrencies. The key theme of the order is the consolidation of the government’s efforts to address the new financial reality within each agency’s jurisdiction. At least 14 separate reports on crypto-related matters will be ordered from various agencies, and most of them are expected to be delivered within 90-180 days. Overall, the executive order will likely pave the way for more focused and coordinated federal oversight of the digital asset arena.
EU teeters on proof of work
On March 14, the European Parliament is scheduled to vote on a key piece of crypto legislation: The Regulatory Framework for Crypto Asset Markets, or MiCA. One of the biggest points of contention in the latest draft has been the provision that many observers interpreted as a way to ban proof-of-work (PoW) mining for environmental reasons. The threat seemed to have faded when German MP Stefan Berger announced last week that the final draft would not include the mining clause. However, just hours before the vote, it became known that the language of the “minimum environmental sustainability” required for cryptocurrency mining has returned to the text of the bill. The worst case scenario seems to be on the table, as some European regulators seem hell-bent on going the distance in their crusade against PoW mining.
Cryptocurrencies break the tie in Korea
In a close race that has apparently been decided by less than 1% of the vote, pro-crypto candidate Yoon Suk-yeol has been chosen to be the next president of South Korea. The candidates’ stances on the regulation of digital assets could well have been the tiebreaker. Since cryptocurrencies have been a hot political topic throughout the past year, Both Yoon and his opponent, Lee Jae-myung, have articulated pro-crypto stances during the campaign. Yoon’s promises to deregulate the digital asset industry and facilitate the development of the fintech sector into a regional powerhouse they might have resonated with younger South Korean voters more strongly than Lee’s platform.
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