Crypto markets have seen a surge in regulatory clarity in recent years, with Japan’s recognition of crypto as a means of payment in 2016 and a series of interpretative letters from the Office of the Comptroller of the Currency (OCC) in 2020 being two of the most significant drivers of the 2021 bull market. As the technology matures, regulatory clarity has become a necessity for the next potential bull market.
The digital asset space needs pillars of trust via regulatory certainty to bring codified benefits for investors, enabling the community to grow safely and function long-term, say David Lawant and Purvi Maniar of FalconX.
Regulatory frameworks are blossoming across the globe, with many regions attempting to attract crypto businesses and innovators by offering clear and understandable regulations. Japan, Singapore, and the United Kingdom are just some of the key developments in 2023 so far.
The U.S. is lagging behind other financial jurisdictions in providing the regulatory clarity that the industry craves. Lack of U.S. banking access was a meaningful barrier to operations for crypto firms earlier this year, and the SEC’s engagement with the crypto industry has created widespread uncertainty.
However, there are early signs that the tide is turning for crypto in America. The Blackrock spot BTC ETF filing in mid-June marked the start of the most compelling round of such filings to date, and the SEC has indicated an openness to futures-based ETH ETFs. Recently, bills addressing crypto market structure and stablecoins have passed their relevant committees with bipartisan support.
We are optimistic. Even if the regulatory developments worldwide are not perfect and the U.S. still has a long way to catch up, in a few years we will remember this time as the critical juncture in which the foundational groundwork for adequate crypto regulation was laid out, say Lawant and Maniar.
Fresh off the press, NASDAQ just released a report on the state of global regulation and crypto. The XRP token is NOT a security when sold to the public, according to a ruling by a Manhattan judge in June. The SEC doesn’t agree with the ruling, so it may not be settled yet, but the markets responded favorably to the ruling.