Global Regulatory Updates: Cryptocurrency Scrutiny and AI Act Approval in the EU, CBDC Plan in the Philippines, and Crypto Ban in Honduras
Summary:
Japan's FSA has outlined measures to protect users from unauthorized crypto transactions, potentially disrupting the P2P sector. South Korea's FIU is tightening scrutiny over cryptocurrency, including a preemptive trading suspension system. EU committees have approved AI act regulations aiming to establish guidelines for AI across industries. The Governor of the Philippines' central bank plans to introduce a wholesale CBDC within his term. Finally, Honduras' National Banking and Securities Commission has banned financial institutions from handling cryptocurrency due to fraud concerns.
Japan's chief financial watchdog, the Financial Services Agency (FSA), has outlined diverse techniques to shield consumers from unauthorized crypto exchange transactions, which might significantly disrupt the peer-to-peer (P2P) transaction sector. The regulatory body is advocating for halting money transfers to cryptocurrency trading platforms if the sender's name differs from the account name. Despite being only suggestive and not mandating strict adherence, it's unclear how financial institutions will respond and whether it will impact the P2P industry.
South Korea's Financial Intelligence Unit (FIU) has declared increased examinations into cryptocurrency. As part of its 2024 work plan, the FIU will deploy a proactive suspension of trading activities suspected of illicitness on existing South Korean platforms. It intends to even halt transactions during a preliminary investigation phase. Additionally, the FIU is planning to enhance its cryptocurrency-focused team in 2024, offering appropriate training, and inaugurating a virtual asset analysis framework for scrutinizing virtual asset transaction specifics and intricate movement patterns.
The Internal Market and Civil Liberties Committees within the European Parliament, backing an interim agreement on its AI Act by voting 71–8, aim to establish standard rules for artificial intelligence (AI) in numerous sectors, including finance, car manufacturing, electronics, aviation, security, and law enforcement. The law will regulate fundamental models or generative AI, trained on sizable data sets, like OpenAI’s ChatGPT. The primary objective of the AI Act is to set safeguards, such as copyright protection, pertaining to generative AI models while banning AI applications that compromise citizens’ rights including biometric categorization and social scoring.
In the next couple of years, Bangko Sentral ng Pilipinas (BSP) Governor, Eli Remolona, divulges the central bank's plan to roll out a central bank digital currency (CBDC) with the wholesale approach. Despite excluding blockchain technology from the CBDC development project, Remolona sites China and Sweden as exemplary nations developing their CBDCs as digital substitutes for cash and competition with other cryptocurrencies, he believes the plan can successfully duplicate. The BSP head undertakes that unveiling the CBDC will happen within his tenure.
In Honduras, the National Banking and Securities Commission has passed a resolution prohibiting local banks from engaging in cryptocurrency transactions. The resolution claims that those who use blockchain-based financial services and cryptocurrencies might face fraud and operational and legal risks, including cessation of their acceptance as no legal obligation exists to acknowledge them as legal tender. Moreover, due to their unregulated nature, cryptocurrencies may also pave the way for fraudulent activities, money laundering, and terrorism financing. The decree also restricts regulated organizations from keeping crypto asset-based derivatives.
Published At
2/19/2024 11:00:00 PM
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