August 16, 2023

Veriscope Regulatory Recap - 1st August to 15th August

Veriscope Regulatory Recap - 1st August to 15th August

Welcome to the latest edition of our Veriscope crypto regulatory newsletter, where we cut through the noise and spotlight shifts redefining the global crypto landscape.

In this edition, we start from France, where preparations are in full swing for the EU’s MiCA 2024 rollout, and reach to Oman's careful steps toward shaping its own crypto future. 

We pass trough Singapore, where innovative plans for stablecoins are taking center stage, and touch down in Namibia, a nation that is boldly reimagining its place in the crypto landscape with a new legal framework.

Now, let's dive straight into it. 

World Overview 🌍

France: While preparing for the European Union's MiCA regulation that will come into force in late 2024, France's Autorité des Marchés Financiers (AMF) is revising its guidelines for digital asset service providers. These changes, effective from January 1, 2024, will demand heightened registration and operational standards.

Oman: Meanwhile, in the Middle East, Oman's Capital Market Authority (CMA) is inching towards its own crypto guidelines, as it recently released a consultation paper for public feedback. This proposal hints at an upcoming comprehensive framework, emphasizing the balance between opportunity and safeguards.

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Singapore: Shifting eastward to Southeast Asia, the Monetary Authority of Singapore unveiled a robust regulatory blueprint for specific single-currency stablecoins on August 15th. This move is part of the country’s broader vision to shape its digital asset landscape, backed by considerable investments in fintech innovations.

Namibia: Venturing further, we look towards Africa, where we found Namibia turning a new page with its new Virtual Assets Act, as the nation has shifted gears from its earlier stance on crypto. The act, while being an initial legal foundation, requires the establishment of a dedicated crypto regulator and sets licensing norms for providers.

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Now, let's zero in on two of these major developments and analyze them in detail. 

France Tightens Grip on Crypto Sector Ahead of MiCA Rollout: A Bid for Clarity or a Barrier to Innovation?

France's securities regulator, the AMF, is tightening the leash on its country's digital asset service providers (DASPs) as the European Union gears up for the MiCA regulation in late 2024. 

From January 1, 2024, DASPs in France wanting to offer a full suite of crypto services—from custody to trading—will need to meet elevated registration standards. 

These aren’t mere checkboxes, as the AMF is demanding robust internal control systems, clear conflict of interest policies, transparent public pricing, and ironclad custody provisions to protect client assets.

Impact on the Crypto Ecosystem

By aligning its DASP licensing requirements with the upcoming MiCA standards, France is positioning itself as a front runner—a clear, compliant gateway for crypto businesses aiming to operate across Europe. This proactive stance could lure crypto innovators seeking regulatory clarity and market access, strengthening France's position as a crypto-friendly hub.

However, on the flip side, these stringent standards may set a steep climb for smaller, emerging crypto entities, limiting innovation and potentially leading to a less diverse and competitive landscape.

Namibia's Crypto Pivot: A Foundation Laid, But Uncertainty Lingers

Namibia’s newly passed Virtual Assets Act marks a significant shift in the country’s stance towards cryptocurrency. 

Previously, crypto exchanges operated in a grey zone, essentially outlawed by the central bank, but that is not the case anymore, as the Act now legalizes these entities.

However, the Act does mandate regulatory oversight, mandatory licensing, and strict adherence to both anti-financial crime provisions and the Companies Act to align Namibia’s crypto sector with international standards.

While the Act is a major step forward, it’s not without its critics. Some factions within the government have dubbed it a "skeleton," a basic structure that requires more fleshing out. Conversely, others argue that the Act serves as a necessary starting line rather than a complete, comprehensive framework.

Adding to this mixed response is a significant gap: the Act mandates a crypto sector regulator but leaves open the questions of who this will be and what standards it will enforce.

This positions Namibia in a bit of a tight spot, as it has a foundational law in place, but key details are still undefined, keeping the future of its crypto landscape uncertain.

The Impact

The Act could be seen as a welcoming signal for crypto businesses as Namibia starts shedding its earlier, more prohibitive stance. After all, it provides initial legality and establishes an anti-financial crime environment that might appeal to compliant, legitimate businesses.

But on the downside, the Act might not offer enough clarity. In its present form, the Act demands compliance but offers little guidance, leaving crypto entrepreneurs guessing about the operational landscape they would be entering. 

Moreover, the Act's stringent penalties, which include hefty fines and potential imprisonment, could also be perceived as a sword hanging over the sector. Plus, the absence of a crypto tax framework leaves a significant aspect of operating in Namibia under a cloud of uncertainty.

Interesting Reads

Understanding the EU's Transfer of Funds Regulation (TFR): A Primer for Crypto Professionals

Shyft Dev Deep Dive Monthly - July 2023

Shyft Network’s July Update 


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