Global governments and financial bodies want to regulate crypto

Globally, governments and regulators are calling for crypto regulations given the rise in cases of fraud and other illegal activities involving such virtual digital assets, in addition to growing concerns about the carbon footprint, among others.

Union Finance Minister Nirmala Sitharaman pushed for a global strategy on crypto and other digital assets during a meeting with International Monetary Fund (IMF) chief Kristalina Georgieva on Wednesday. Previously, the newly elected Prime Minister of the United Kingdom, Liz Truss, also called for the inclusion of crypto on the subject of digital assets.

Approximately $1.9 trillion has been wiped from the crypto market since last November, dropping from its high of $2.96 trillion on November 20, 2021. Currently, the crypto market capitalization is rising at $1.03 trillion. The crypto market is also under constant threat from hackers, as $1.9 billion was stolen in hacks during the January-August 2022 period, according to a Chainanalysis report published in August 2022.

RECENT INITIATIVES ON REGULATING CRYPTO WORLDWIDE

Here is a list of recent initiatives on crypto regulations around the world

Sitharaman for a global push on crypto assets

Union Finance Minister Nirmala Sitharaman called for a unified global digital asset regulation strategy on Wednesday, during a meeting with International Monetary Fund (IMF) Managing Director Kristalina Georgieva.

She encouraged the IMF to take the lead in crypto regulation.

After the meeting, Georgieva said in a Tweet, “IMF stands ready to work with India’s Ministry of Finance on climate change, crypto regulation and other global challenges of our time.”

Sitharaman called for a global framework to control cryptocurrencies and warned of the dangers of money laundering and global terrorist financing through crypto. She pointed out that no nation can handle these dangers independently and that crypto can only be controlled when nations decide to tackle this problem in unison.

In February 2022, India introduced a 30% tax on crypto income, effective April 1, 2022. Additionally, it was also decided to levy a withholding tax (TDS) of 1% on virtual asset payouts exceeding Rs 10,000. , and the taxation of these gifts in the hands of the recipient.

Report from the White House to the United States

In a new report released Thursday, the White House Office of Science and Technology Policy urged the United States to conduct further research on the energetic effect of cryptocurrency mining and set standards accordingly. Of the industry.

According to a White House assessment, crypto mining activities in the United States consume as much energy as all personal computers or household lighting. The research comes amid growing concerns about the amount of energy used by cryptocurrency mining companies.

To generate new tokens and validate transactions, cryptocurrency mining requires a network of computers to solve complex mathematical equations. Bitcoin, the largest crypto by market capitalization, operates on a “proof of work” mechanism, which uses a lot of energy. However, Ethereum, the second largest crypto by market capitalization, is currently switching to a different mechanism, which requires 99.9% less energy.

“If these measures prove ineffective in reducing impacts, the administration should explore executive branch actions, and Congress could consider legislation, to limit or eliminate the use of energy-intensive consensus mechanisms for the ‘crypto-asset mining’,” the report said.

US Federal Reserve Chairman Jeremy Powell on Crypto Regulation

On Thursday, Federal Reserve Chairman Jerome Powell called for stablecoin legislation during a speech at a conference at the Cato Institute, a monetary think tank.

“We don’t want to get in the way of proper innovation. We believe that something like what pretends to be money should be regulated appropriately. I think we need regulation. If people think something is money, it must have the qualities of money. I don’t think you want to take money and make it another commodity,” Powell said at the conference.

United States SEC on Crypto Regulation

According to Gary Gensler, Chairman of the United States Securities and Exchange Commission, more regulation is needed to ensure public and investor confidence in cryptocurrencies.

He did so through a video call at a startup founders and investors event at the New York summit. “This field will only take off if you have some confidence,” he told the conference.

The SEC has been in conflict with the crypto industry, long before Gensler took over the agency in April 2021, over the rules that should apply to decentralized projects, such as those in place for stocks or the obligations.