The US SEC wants to supervise DEFI, and El Salvador bitcoin is still an option!
On August 20, staff of the U.S. Securities and Exchange Commission (SEC) said that peer-to-peer networks are completely unregulated in the United States, which may change in the future. The decentralized financial project called DEFI seems to have the characteristics of entity types regulated by the sec. Any project that rewards participants with valuable digital tokens or similar incentives may enter the jurisdiction of regulators.
Analysts believe that the U.S. SEC’s desire to regulate DEFI may cause continuous panic in the market. At the same time, it is reasonable to believe that the U.S. SEC will carry out the same operation for DEFI after the tax bill on cryptocurrency trading is formulated. In the long run, this is the only way for the whole blockchain market to move towards compliance. However, according to the current situation, market panic may cause a short-term decline in market trading volume.
On August 20, the Central Bank of El Salvador recently issued two drafts to guide banks and financial institutions on how to provide BTC related services to customers. The draft entitled “operation guide for authorization of bitcoin and US dollar on digital wallet platform” stipulates that BTC will be officially adopted as legal currency from September 7.
In the draft technical standards for promoting the application of bitcoin method, the Central Bank of El Salvador pointed out that financial entities must apply to the central bank to provide digital wallets. The application must specify the type of product provided, including target market details, risk assessment, customer charges, customer education regulations and complaint procedures.
ZB Research Institute believes that although the authentication of customers by the Central Bank of El Salvador is applicable to encrypted wallets, based on the comprehensive anti money laundering measures promoted by all countries, El Salvador may monitor and analyze special currency transactions. In the two-way circulation and exchange process between bitcoin and US dollar, banks will inevitably intervene to collect fees.
As the first application of Decentralization — bitcoin, whether users are willing to accept the intervention of intermediaries is still unknown. According to the information obtained by ZB Research Institute from two draft bills, the bill requires banks or financial institutions to warn customers that bitcoin price is unstable and the transaction cannot be reversed. If the private key is lost, bitcoin will be lost. Analysts believe that El Salvador’s move will lose the trust of some cryptocurrency investors without the introduction of the exchange rate and regulations for the conversion of cryptocurrency into legal currency.
Earlier, Alejandro Zelaya, Minister of finance of El Salvador, said that the use of bitcoin and digital wallet in El Salvador would be “completely optional”, and enterprises that did not accept cryptocurrency would not be subject to sanctions.
ZB Institute believes that although El Salvador abandoned the plan of bitcoin as legal tender due to international pressure, it can still see the efforts made by the government in the legalization process of cryptocurrency. Perhaps El Salvador is looking for a new way to integrate the characteristics of both sides between the legalization of bitcoin and the international integration of us dollar. From this perspective, the relevant draft bill of El Salvador also opens up another way for the global cryptocurrency market.
On August 20, Moody’s analyst zedric Cheung and others said in a report on Thursday that the digital payment tools operated by Tencent and ant group are very popular, making China basically a cashless society. The dominance of the technology platform has a squeezing effect on banks, such as causing more customers to transfer bank deposits to the money market funds operated by the platform.
ZB Research Institute believes that the introduction of digital RMB is expected to improve the payment competitiveness of banks, enhance the status of banks in the payment system, enhance data collection capacity and expand the user base. It also expressed the concern of relevant departments about the centralized control of data by technology companies. In the future, technologies such as big data may be gradually returned to the government.
On August 20, VachiraArromdee, deputy governor of the Bank of Thailand, said that the Bank of Thailand plans to test retail central bank digital currency as an alternative payment option in the second quarter of 2022. The pilot project will assess the use of CBDC in limited cash activities, such as receiving, converting or paying for goods and services.
On August 20, the governor of the Bank of Indonesia said that the central bank would launch a digital IDR based on blockchain. Previously, ZB Research Institute had made relevant comments on the Central Bank of Indonesia’s research on central bank digital currency (CBDC) or digital rupiah.
On August 20, Russian President Vladimir Putin signed a decree approving the country’s national anti-corruption plan for 2021–2024. ZB Research Institute was informed that in the plan, Putin instructs the Ministry of Finance, the Ministry of Labor, the Ministry of Digital Development, and the Central Bank to submit plans for encrypted assets and currencies declared by verification officials to ensure the accuracy and completeness of relevant data.
ZB Research Institute believes that the legalization of global digital currency is in the process of fierce integration, which will inevitably cause market anxiety, so the market fluctuation in the short term is inevitable. In the long run, the future of encrypted assets is still on the rise. Whether the policy supports the tax collection or supervision of encrypted assets or not, encrypted currency can not be driven by the policy to completely disappear or fully comply with the government’s policies, which is related to the original intention of encrypted assets.