cryptocurrency

Rwanda to adopt digital currency by 2026

Rwanda aims to develop its own national Central Bank Digital Currency (CBDC) within the next two years. According to the National Bank of Rwanda (BNR), that initiative will offer Rwandans a secure, cost-free, and convenient alternative to physical cash. The CBDC is anticipated to boost financial inclusion, enabling more unbanked individuals to engage in the formal economy. Soraya Hakuziyaremye, Deputy Governor of Rwanda’s Central Bank, disclosed the 2026 target during an interview. She emphasised the importance of Rwanda’s CBDC, noting similar developments in other countries in the continent, including Nigeria, Ghana, and South Africa, which are either piloting or have already launched their own CBDCs.

Hakuziyaremye also noted that, considering Rwanda’s aspirations for ICT development and a cashless economy, it was essential to evaluate the potential benefits of following other countries’ examples, especially that  the country’s major trading partners are testing or adopting the technology. In November 2023, National Bank of Rwanda Governor John Rwangombwa announced during the presentation of the central bank’s annual report for the fiscal year 2022/2023 to a joint parliamentary session that the CBDC was in development. In May 2024, the Deputy Governor, working alongside the Ministry of Finance, ICT, and Innovation, formed a task force for a feasibility study on CBDC in Rwanda in order to explore the technological requirements, regulatory frameworks, and potential risks.

The Deputy Governor mentioned that the authority published a research paper and held a public consultation process to address various concerns and ensure the CBDC benefits the population, including data privacy, system resilience, and the potential destabilization of the financial system. After the public consultation process ends in the next four weeks, Rwanda will begin a proof of concept to test the technology, design, and speed on a small scale. Additionally, a six-month international test will be conducted to evaluate the technology for cross-border payments. Following these tests, selected individuals and companies will participate in testing the digital currency. While considering various CBDC design options, Rwanda prefers a retail CBDC distributed through banks and an offline-accessible CBDC, which would be particularly useful in areas without internet access or smartphones, or during power outages.

Why does it matter? 

The introduction of a CBDC in Rwanda holds significant importance for: 

  •  Economic Growth and Stability, as it contributes to a more stable and resilient economy by improving the efficiency of monetary policy implementation. That can lead to better control of inflation and economic stability.
  • Financial Inclusion in a country where a significant portion of the population remains unbanked or underbanked. A digital currency can provide easier access to financial services especially to individuals in remote and underserved areas.
  • Cost Efficiency by the reduction of the costs associated with producing and managing physical cash (savings on printing, transportation, and storage) 
  • Enhanced Security and Transparency due to its higher level of security compared to physical cash, reducing the risk of counterfeiting and fraud. The use of blockchain or similar technologies can ensure greater transparency and traceability of transactions, vital for combating money laundering and other illicit activities.
  • Technological Advancement through financial technology that can attract investment, stimulate innovation, and create new job opportunities in the tech sector.

The Belgrade Crypto conference 2024: Serbia and the cryptocurrency market

The Belgrade Crypto conference, held on Friday, 12 April 2024, by one of the two registered cryptocurrency exchange offices in Serbia, CRYPTO12, shed light on the current cryptocurrency regulation and industry in Serbia. The conference brought together prominent stakeholders to share knowledge of the cryptocurrency and digital assets industry and highlight essential points in the related landscape. 

Is Serbia on the cryptocurrency regulation map?

The conference featured three insightful panels addressing key cryptocurrency regulation and innovation aspects. The first panel, ‘The Crypto Conundrum: Navigating Regulatory Waters in Serbia & Beyond,’ focused on Serbia’s evolving crypto regulations and their impact on fostering a dynamic fintech ecosystem. Discussions included compliance strategies and the role of the International Cooperation and Development Department of the Securities Commission on behalf of the Ministry of Economy, represented by Anina Milanovć, and the participation of the Administration for the Prevention of Money Laundering on behalf of the Ministry of Finance, represented by Đorđije Vujičić, along with prominent stakeholders like Erwin Voloder, Head of Policy – European Blockchain Association and other influent characters from the financial and economic realm, discussing the shaping, transforming and driving of the digital monetary politics. 

People, Person, Crowd, Adult, Male, Man, Clothing, Footwear, Shoe, Chair, Furniture, Formal Wear, Suit, Conversation, Audience, Indoors, Face, Head, Bride, Female, Wedding, Woman

Serbia was among Europe’s first nations to implement cryptocurrency asset regulation in 2021, with the Law on Digital Assets drafted by the National Bank of Serbia. The current regulatory framework was created with the help of several EU jurisdictions at the forefront of regulatory efforts in this industry. The panel also emphasised the importance of compliance with the FATF AML rules, in which Serbia made significant progress. 

The second panel, ‘Crypto Crossroads: Serbia’s Tax Labyrinth and Legal Landscapes,’ explored the complexities of cryptocurrency tax regulations and legal frameworks, offering guidance for businesses navigating these challenges. Topics ranged from real estate transactions to payroll solutions involving cryptocurrencies held by attorneys and board members of prominent companies from the region and beyond, such as Seker, Vice President of Crypto.com or Dušan Romčević – board member at B2BINPAY CY.

What to expect from the industry?

The last panel, ‘Crafting the Future of Crypto Services,’ delved into the future of digital currencies. Industry leaders projected advancements, a worldwide regulatory shift, and ethical considerations shaping the crypto industry’s trajectory. The panel highlighted strategic directions, challenges, and opportunities defining the future of cryptocurrencies and blockchain technology in Serbia and the surrounding region.

Is the EU’s MICA regulation the way forward for all?

The conference provided attendees with deep insights into navigating regulatory landscapes, tax implications, and the future landscape of crypto services, bringing experts from state institutions and the private sector. The panels also included discussions about the EU’s Markets in Crypto Assets (MiCA) regulation, which set the role model for the whole continent, an important piece of regulation that will most definitely play a crucial role for both EU and non-EU countries which should comply with the legislation to stay at the forefront and participate in the landscape of digital assets.

Britain plans regulations for cryptoassets

Britain has announced plans to introduce its first set of regulations for the cryptocurrency sector, which would require market players to obtain authorization before offering services to its consumers. The rules will focus on crypto assets like bitcoin and its underlying distributed ledger technology (DLT) or blockchain, as these have significant potential, particularly in areas such as securities settlement.

According to the ministry, “The government’s position is that firms dealing directly with UK retail consumers should be required to be authorized irrespective of where they are located”. It also clarified that the rules will be integrated into existing market laws and will align with the EU regulations on crypto assets (MiCA).

Moreover, Britain will also regulate stablecoins and present legislation in 2024 to empower its independent financial regulatory body, the Financial Conduct Authority (FCA), to oversee them. It also intends to draft regulations to manage the failure of a major stablecoin.

Overall, the ministry stated that the aim of these measures is to create a regulatory environment that encourages innovation while ensuring financial stability and the safe and reliable use of new technologies.

PayPal temporarily halts cryptocurrency purchases for UK customers

PayPal is working to comply with new UK regulations coming into effect on 8 October 2023. Britain’s financial regulator, the Financial Conduct Authority (FCA), is imposing tougher rules on cryptocurrency products and services marketing and advertising. Therefore, PayPal has announced that it will temporarily pause the ability for UK customers to buy cryptocurrencies.

PayPal launched cryptocurrency trading in the UK in 2021 and expects to restart cryptocurrency purchases early in 2024. In the meantime, its UK customers will still be able to hold or sell cryptocurrency during this temporary halt on crypto purchases.

Why does it matter?

PayPal is a global player in the fin-tech industry, and its decision to temporarily pause crypto purchases for its UK consumers may impact the global cryptocurrency market. Around the world, governments are regulating crypto assets to ensure consumer protection, prevent money laundering, and address potential risks, such as the FTX collapsing last year. The company’s decision reflects the urgent need to adapt to an evolving regulatory landscape, which could signal significant change for the industry.

SEC asked Coinbase to stop trading cryptocurrencies other than bitcoin before lawsuit

The USA Securities and Exchange Commission (SEC) allegedly asked Coinbase to halt trading in all cryptocurrencies except bitcoin prior to filing a lawsuit against the company for not registering as a broker.

Coinbase CEO Brian Armstrong revealed that the SEC made this recommendation, claiming that they believed every asset other than bitcoin was a security. Armstrong stated that the SEC did not provide an explanation for their conclusion and demanded that online exchange delist all assets other than bitcoin.

The SEC denied making formal requests for delisting, stating that its staff may share views on conduct that raises questions under securities laws during investigations. SEC Chair Gary Gensler has previously suggested that cryptocurrencies other than bitcoin are securities. The SEC and Coinbase have not yet responded to requests for comment.

Binance to seek dismissal of CFTC complaint

The online cryptocurrency exchange Binance, and its CEO Changpeng Zhao are planning to seek dismissal of a CFTC complaint accusing the crypto exchange of violating the Commodity Exchange Act and certain related federal regulations.

The CFTC alleged that Binance operated an ‘illegal’ exchange and had a ‘sham’ compliance program, and the company is obliged to respond until the July 27th

As we wrote earlier this year, the company is also facing a lawsuit from the SEC and is under investigation by the Justice Department for suspected money laundering and sanctions violations. The online exchange is also under the scrutiny of financial regulation in Belgium, as they ordered the halt of the operation in that country.

Financial regulator in Nigeria orders Binance to halt operations in the country

This week, Nigeria’s markets regulator has ordered the world’s largest cryptocurrency exchange, Binance, to halt its operations in the country. The move follows Nigeria’s central bank’s decision in 2021 to ban banks and financial institutions from dealing in or facilitating transactions in digital currencies. The Nigeria’s Securities and Exchange Commission said that Binance Nigeria Limited, which was soliciting Nigerian investors through a website, was illegal. The order indicated that the company was not registered or regulated, making it illegal.

Despite the ban, Nigeria’s young, tech-savvy population has eagerly adopted cryptocurrencies, for example using peer-to-peer trading offered by crypto exchanges to avoid the financial sector ban. In an effort to find a middle ground between an outright ban on crypto assets and their unregulated use, Nigeria’s SEC published a set of regulations for digital assets last year.

As a result of the ban and the SEC’s actions, Binance is now required to halt its operations in Nigeria. It remains to be seen how the Nigerian authorities will implement the regulations and how the cryptocurrency industry will evolve in the country in the future.

Earlier this month the U.S. Securities and Exchange Commission (SEC) also sued Binance and Coinbase for allegedly breaching its rules.

US charges two Russians in the 2014 Mt. Gox Bitcoin heist

The US Department of Justice has accused two Russian nationals, Alexey Bilyuchenko and Aleksandr Verner, of conspiring to launder 647,000 Bitcoins that had been stolen from the Mt. Gox Bitcoin exchange in 2014. At that time, the stolen currency was worth around half a billion dollars in cryptocurrency.

The US government is charging Dmitry Bilyuchenko with operating BTC-e, a crypto exchange that is no longer in operation and was allegedly used by malicious actors to launder money. Bilyuchenko is also being charged for working with Alexander Vinnik, who was indicted in 2017 and extradited to the US last fall for his involvement with BTC-e and laundering stolen funds from Mt. Gox. Back then, Bilyuchenko narrowly avoided arrest in Greece by destroying his computer and immediately flying back to Moscow when Vinnik was arrested.

In 2015, Mark Karpeles, the CEO of Mt. Gox, was arrested and indicted in Japan but was acquitted on most charges in 2019.

This incident was one of the early events highlighting the vulnerability of cryptocurrency exchanges to cyber criminals. Since then, the industry has experienced multiple large-scale thefts.

Cryptocurrency exchange Coinbase sued by the SEC while the task force of 10 US states regulators investigating

One day after the US Securities and Exchange Commission (SEC) accused Binance for securities fraud, the Coinbase, a largest US based cryptocurrency exchange, is sued by the SEC. The SEC alleges that cryptocurrency exchange has failed to register its services with the SEC as required by law, resulting in the company making billions of dollars unlawfully facilitating the buying and selling of crypto asset securities. In addition, the SEC alleges that since 2019, Coinbase has been engaging in an unregistered securities offering through its staking-as-a-service program. The SEC’s complaint seeks injunctive relief, disgorgement of ill-gotten gains plus interest, penalties, and other equitable relief.

Inside the suit, the SEC identified tokens issued by foundations and companies or tied to protocols including Solana (SOL), Cardano (ADA), Polygon (MATIC), and Nexo (NEXO) (to name only a few) as securities.

The SEC first warned Coinbase it might sue the cryptocurrency exchange earlier this year, sending a Wells Notice, which Coinbase responded to in April.

In the synchronized actions Coinbase is facing scrutiny from a task force of ten US state securities regulators. Namely in Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin. The Alabama Securities Commission (ASC) has ordered Coinbase to explain within 28 days how it is not violating state securities laws with its staking program.

The California Department of Financial Protection and Innovation (DFPI) has filed for an order for Coinbase to ‘desist and refrain from the further offer and sale of securities in California.’ The ASC and DFPI are motivated by a desire to protect consumers and investors in the decentralized finance space. The claims against Coinbase are that it is offering securities without a permit or other form of qualification in California and that it is violating state securities laws with its staking program.

The SEC accuses Binance of mishandling customer funds and lying to regulators

The US Securities and Exchange Commission (SEC) has accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds and lying to US regulators and investors. According to the SEC’s 136-page complaint, company mixed billions of dollars in customer funds and sent them to a separate company, Merit Peak Limited, which is controlled by Binance’s founder, Changpeng Zhao.

The SEC alleges that Binance operated as an unregistered securities exchange, and illegally offered and sold securities. By doing this the company broke the US securities laws. The exchange has also been accused of misleading investors about the adequacy of its systems to detect and control manipulative trading. The SEC’s lawsuit is the second time this year that federal regulators have accused the Binance of evading laws designed to protect investors in the USA.

The worlds largest cryptocurrency exchange has long been seen as a major target in the SEC’s quest to tighten the crypto industry regulation, and by extension, the US financial system response toward the cryptocurrency investments. By the report from Binance, company is making $65 billion in average daily trading volume, and thus the SEC’s allegations have sent shockwaves throughout the cryptocurrency industry. According to the Financial Times, the Binance said it was ‘disappointed’ by the SEC’s actions. ‘We look forward to working with them in good faith and in a constructive manner to resolve the issues they have identified,’ the company said.