"Building cars while building roads", Eurasian is cautious about the rapid development of crypto assets

Source: Economic Daily , original title "Europe and Asia Prudently Treats Rapid Development of Crypto Assets"

Author: Tahara

In the field of crypto assets based on the rapid development of financial technology such as blockchain, the U.S. dominance pattern no longer exists, and the “curve overtaking” effect in Europe and Asia has begun to appear. Under such circumstances, Eurasian regulatory attitudes and initiatives on this emerging issue have increasingly attracted global attention.

In 2019, the "mysterious world" of crypto assets represented by "Bitcoin" is still in a "three-legged stand" situation. It's just that the ranking of the top three players has changed from "America, Europe, and Asia" in 2018 to "Europe, America, and Asia" this year.

PricewaterhouseCoopers recently released a report that Europe and Asia accounted for 41% and 26% of the global crypto asset financing scale in the second quarter of 2019, respectively, and the Americas (mainly the United States) fell from 51% to 28% in the same period last year; in Of the scale of crypto asset investment mergers and acquisitions over the same period, the total share of Europe and Asia rose from 17% last year to 50%, while the Americas cut nearly half from 80% to 48%. This fully demonstrates that in the field of crypto assets based on the rapid development of financial technology such as blockchain, the U.S. dominance pattern is no longer, and the "curve overtaking" effect in Europe and Asia has begun to appear. Under such circumstances, Eurasian regulatory attitudes and initiatives on this emerging issue have increasingly attracted global attention.

Europe: Prudent tightening and tight control of risks

Europe is cautious about crypto asset management. Dongbrovskys, the European Commission's deputy chairman responsible for financial affairs, recently pointed out that the European Commission will complete an assessment of the EU's existing laws and regulations by April 2020 based on the Fintech Action Plan issued in March 2018. Ensuring that it will not impede financial innovation and effectively protect stakeholders, especially consumers in general. Regarding Facebook's "Libracoin", East Brovsky made it clear that the European Commission will continue to track its progress and will dynamically assess its financial stability, monetary policy, market competition, data privacy, and cyber security with global partners. Risks such as consumer protection, anti-money laundering, and many other areas. To this end, the European Commission has issued continuous warnings in recent months, calling on EU consumers, investors and banks to avoid holding cryptocurrencies.

When it comes to crypto assets, EU economic policy makers' two priorities are: What to control? When does it matter? First, it is imperative to distinguish which crypto assets are commodities and which are financial instruments. At present, crypto assets mainly include cryptocurrencies, private payment instruments and speculative instruments, initial digital currency stock offerings (hereinafter referred to as ICO) funds, etc. Only in the first 10 months of 2019, ICO funds favored by small and micro enterprises but lacking transparency in the whole process, their global financing scale has exceeded US $ 18 billion, which has nearly quadrupled compared with the whole year of 2018, triggering Kostens, a technology consultant, is a general concern within EU regulators, and many member states have included domestic law as a crowdfunding tool and tightened supervision. Second, when to intervene is also a difficult issue. Although France, Malta and other countries have separately proposed legislative frameworks, the European Commission is concerned that premature intervention will stifle financial innovation and thus allow other "players" such as the United States to occupy a favorable position in the market. Some think tanks have suggested that EU policy makers "must choose the right time to upgrade from national regulation to EU regulation."

Some EU member states have even adopted a stricter attitude towards crypto asset supervision. The Belgian Financial Services Market Authority has received consumer reports and recently issued a "fraud alert" against nine cryptocurrency websites. Due to anti-money laundering considerations, the Dutch financial regulatory authorities have closed the door of non-European countries to conduct crypto asset-related businesses in their territories, while requiring similar companies in the country to register with the Dutch central bank and accept government supervision. Britain, which is in the process of leaving the European Union, has announced that its Financial Operations Authority will ban the sale of crypto assets to non-institutional investors starting in 2020.

Asia: prudent optimism

Due to the decline in the rate of return on US dollar assets and the overall entry of negative interest rates in the Eurozone, Asian investors have increased their investment in crypto assets with higher returns this year. The PricewaterhouseCoopers report points out that many high-net-worth individuals and wealthy households in Asia have begun to increase their holdings of digital wealth such as crypto hedge funds, and the demand for securely investing in crypto assets through traditional financial institutions such as banks and funds is increasing. .

Compared to the increasingly stringent approach in Europe, Asia has shown a more constructive attitude towards crypto assets. The Global Law Research Center recently released a report saying that eight countries and regions including Singapore, Malaysia, Mongolia, etc. are open to cryptocurrency holdings and transactions and have no specific legislation. Seven countries and regions such as Japan, South Korea, and Thailand are improving the relevant Legislation and advocate for dynamic regulation. In this regard, experts from the Asian Development Bank suggest that high-quality crypto asset supervision will help the financial industry to develop innovatively. Supervision should “catch up with fintech” by means such as establishing rules and regulations, enhancing credibility, eliminating bureaucracy, strengthening international cooperation and policy coordination. Speed ​​of innovation. "

Take ICO as an example. A joint study by the Thai National Legislative University and the Singapore Management University shows that this form of financing, which sells "digital tokens" to investors to raise cryptocurrencies such as "Bitcoin," is being invested due to lack of review of stock exchange institutions such as IPOs Such as the performance and financial situation of investors, investors face the risk of highly asymmetric information and suffer losses. Such cases have occurred in Japan, Singapore, Thailand, and Vietnam. At the same time, due to the large fluctuations in the price of cryptocurrencies, both sides of the ICO are at risk of bursting asset bubbles. Scholars from Thailand and New Zealand suggested that Asian regulators should pay attention to the balance of supervision and innovation in improving the system, not only to protect the rights and interests of all parties, but also not to prevent "Asia from growing into a regional and even global cryptocurrency harbor."

"Building a car while building a road", Eurasian adopted such a pragmatic attitude of overall prudence and perfect supervision when faced with rapidly developing crypto assets. BBShares person in charge Jeter lamented: "If a few months ago," Libra Coin "planned to make a perfect advertisement for the development of crypto assets, then the news that the People's Bank of China plans to issue digital sovereign currency makes Asian and global investors eager to try. In any case, "it must run fast and have a direction", which should be the only choice for the international community to use financial technology to build a benign ecology for the development of the global digital economy.