- Singapore cracks down on cryptocurrency promotion
- Mining vs. the environment
- EU might tighten rules
- Close attention to crypto exchanges
After the extraordinary ups and downs of Bitcoin in 2021, the crypto world has drawn the attention of people all over the world. Even those who used to know nothing about crypto have started considering potential investments and studying various virtual assets. The possibility of earning money without much effort seems very appealing.
By the look things, the authorities all over the world are concerned about it. It seems that 2022 might see new attempts to regulate crypto.
Cryptocurrency ATMs have been shut down in Singapore. This was initiated by the MAS — the central bank of Singapore.
“To comply with the sudden announcement, we have ceased to offer buy or sell services via our five ATMs while seeking further clarification from the MAS,” stated Daenerys & Co, Singapore’s largest crypto ATM operator.
Another crypto ATM operator, Deodi Pte, has also announced that it has shut down its only crypto ATM because of the new guidelines targeting cryptocurrency promotion.
On Monday, the MAS issued “Guidelines to Discourage Cryptocurrency Trading by General Public”. In these Guidelines, Singapore’s central bank “has observed that some DPT service providers have been actively promoting their services through online and physical advertisements or through the provision of physical automated teller machines (ATM) in public areas”.
Singapore is not the only country to crack down on crypto promotion. Earlier this week, the British government announced that it was going to tighten the screws on cryptocurrency promotion, to ensure that such ads are clear and not misleading.
Last December, the Bank of England claimed that the crypto market could pose risks to financial stability and called for establishing a global crypto regulation system. Earlier, the IMF expressed similar concerns. This week, Narendra Modi, the Prime Minister of India, also called for global action on crypto during a Davos Forum event.
Last summer, China banned Bitcoin mining to achieve carbon neutrality by 2060. Due to this ban, Bitcoin miners moved to other mining-friendly countries, including the U.S. and Kazakhstan.
According to the Cambridge Center for Alternative Finance, in August 2021, the U.S. accounted for 35.4% of the global hash rate. In April, before China banned cryptocurrency, the share of the U.S. was only 16.8%.
Since the U.S. is committed to producing net-zero carbon emissions by 2050, Bitcoin mining has been put into the spotlight. A Congress subcommittee is going to conduct a hearing on crypto later today. Most likely, the main issue during these discussions will be mining regulation.
This week, world leaders are participating in the virtual 2022 Davos Forum. Among the top 10 most severe risks over the next 10 years are climate action failure, extreme weather, human environmental damage, and natural resource crises.
The EU pays close attention to mining and has suggested banning Proof of Work (PoW) mining. Erik Thedéen, the Vice-Chair of European Securities and Markets Authority (ESMA), has called for banning mining. Mr. Thedéen stated that cryptocurrency mining poses significant risks to the environment. He also added that the EU regulatory authorities should support Proof of Stake as a method that “has a significantly lower energy profile”.
Currently, both Bitcoin and Ethereum (ETH) still use PoW, but there are plans to move Ethereum 2.0 to PoS. If Bitcoin does not also migrate to PoS, there will likely be even more debates about Bitcoin mining and the environment. It is still uncertain whether regulatory authorities will force Bitcoin to move to the PoS protocol, but this scenario is quite likely.
This week, SEC Chairman Gary Gensler expressed his hopes that trading platforms would work actively on regulating crypto assets. According to him, additional oversight of crypto exchanges is necessary for investors to feel as protected as they do when trading stocks or other regulated assets.
“I’ve asked staff to look at every way to get these platforms inside the investor protection remit. If the trading platforms don’t come into their regulated space this would be another year of the public being vulnerable,” Gensler stated during a recent virtual press conference.