The last few years have shown how we live in a financially connected world. It also seems that there is another financial emergency every single day. While nobody knows with 100% certainty what will happen in the future, one thing is sure. Cryptocurrency is starting to make waves. Regulatory approval for crypto is happening right now in the financial industry.
What’s Happening In The World Of Cryptocurrency
Whether you are a crypto advocate or not, it is an industry you can not ignore. The executive order signed by President Joe Biden in March of this year paved the way for crypto to become a reality.
The executive order requested that government agencies should form committees, research cryptocurrencies, and work towards creating a regulatory framework.
While this work continues, every part of the crypto network is under scrutiny. If cryptocurrency is to work, it has to be regulated appropriately.
However, because it is such a new concept, there has been a steep learning curve for regulators to get their heads around. Now, the signs are looking positive for the industry. The new regulatory framework will give it the credibility and security it needs to move forward.
Real Examples Of Changes Happening In The Crypto World
Fundamental changes are happening in the crypto world. It might be a bit clumsy and sluggish, but it will improve. Here are some examples of the trials and dilemmas facing the industry.
French Regulators Approve Crypto Platform After A Rigorous Process
At the beginning of August 2022, the world’s fastest-growing cryptocurrency platform, Crypto.com secured the Electronic Financial Transaction Act and Virtual Asset Service Provider registration.
So how did the company manage to do this? Well, it acquired a payment service provider and virtual asset service provider in South Korea.
At the time, the company said it was “committed to its mission of being an industry leader for regulatory compliance, consumer safety, awareness, and protection.”
Indeed, with more than 50 million users worldwide, it was a big step towards regulation. Later that same month, the Financial Conduct Authority (FCA) gave regulatory approval to Crypto.com as a crypto asset business.
Regulation Approved In France
Following this hive of activity, Crypto.com has gained regulatory approval in France. Firstly, the Autorité des Marchés Financiers (AMF) granted that Crypto.com can be known as a Digital Asset Service Provider (DASP).
Then the Autorité de Contrôle Prudentiel et de Résolution (ACPR) gave the final clearance.
However, it wasn’t plain sailing for the company to achieve this regulatory status. The crypto platform has been very public about its rigorous review process to get this approval.
The areas covered by the regulators predominantly involved anti-money laundering and detailing how the company would combat terrorism financing. Could this be the beginning of the regulatory process in action?
High Net Worth Clients Can Get Involved In Crypto
According to a World Health Report by Cap Gemini, 71% of High Net Worth Individuals (HNWI) have invested in digital assets worldwide. Also, an incredible 91% of HNWIs that have investments in digital assets are younger than 40 years old.
On top of all this, it is also interesting to note that these people say that cryptocurrencies are their favorite investment in digital assets.
The Younger Generation Are Embracing Cryptocurrency
There is a market for crypto investment. The market is certainly here to stay. Indeed, with so many young people investing in digital assets, it is only going to grow as a market.
DBS, the multinational banking and financial services organization, is making waves in this area. It is now opening up its crypto trading digital exchange DDEx to HNWIs.
With a minimum investment of $500, DBS wealth clients will be able to trade Bitcoin, Bitcoin Cash, Ethereum, and XRP on DDEX.
Sim. S. Lim, the Group Executive for Consumer Banking and Wealth Management at DBS Bank, said, “Broadening access to DDEX is yet another step in our efforts to provide sophisticated investors looking to dip their toes in cryptocurrencies with a seamless and secure way to do so.”
Authorization Takes Time And Will Speed Up
In such a relatively new industry, authorization will take some time. Revolut, a British FinTech company, has been through it all with the FCA. Revolut had originally applied for a license back in January 2021.
The company was frustrated with the FCA’s slow response to their license request. From March 2022, they used a temporary waiver to offer crypto services to UK consumers.
Finally, Revolut has been accepted to the FCA registry of crypto asset firms. It will help the company secure its next goal of a UK banking license.
Revolut’s CEO, Nik Storonsky, was critical of the FCA back in June and said the FCA was “slower compared to other regulators” and called for “stricter timelines” to speed the process along.
Regulatory Compliance Is Essential
The process certainly needs to improve, as no industry wants to deal with a slow regulatory process. However, at the same time, it is essential to remember why we have regulatory compliance in the first place. In Revolut’s case, the long delay was related to AML compliance issues. Thankfully, the process had a successful conclusion.
When Will Crypto Be The Norm?
Well, it’s still too early to say. The regulators are busy collating information and creating a regulatory framework in the US. The European Central Bank (ECB) predicts that a digital euro will not be available until 2026. The delay is because they are still weighing up design and distribution considerations.
An ECB board member has said that the Governing Council will decide in autumn 2023 when to start a realization phase. A board member said, “This phase will be important to develop and test the appropriate technical solutions and business arrangements necessary to provide a digital euro.”
There has been commentary that this phase could last three years. Three years from now seems like forever. However, anything can happen from now till then in the world of cryptocurrency. Next year, we will likely better understand how big the crypto waves will be.