Japan and South Korea want more control over crypto transactions: Law Decoded
The Financial Services Agency (FSA) — Japan’s principal financial regulator — has suggested several measures to protect users from “unlawful transfers” to crypto exchanges, and one might seriously complicate the peer-to-peer (P2P) transactions market.
The regulator suggests “stopping transfers to crypto-asset exchange service providers if the sender’s name is different from the account name. The current FSA request is written as a recommendation, and it doesn’t demand compliance with specific requirements but instead refers to initiatives. How exactly the banks will react to these recommendations and whether they will disrupt the P2P market remains to be seen.
South Korea’s Financial Intelligence Unit (FIU) has also publicly announced tightening scrutiny over crypto. As a part of its work plan for 2024, the agency will introduce a preemptive trading suspension system for suspicious transactions on platforms already operating in South Korea. This will freeze transactions even during the pre-investigation phase. Moreover, the FIU intends to “expand and reinforce” its crypto team in 2024, providing the necessary education and training and launching a “virtual asset analysis system,” tracking and analyzing virtual asset transaction details and “complex movement paths.”
EU committees approve AI act regulations
The Internal Market and Civil Liberties Committees of the European Parliament voted 71–8 to endorse a provisional agreement on its AI Act. The act intends to establish guidelines for artificial intelligence (AI) across various industries, including banking, automotive, electronics, aviation, security and law enforcement. The regulations will oversee foundational models or generative AI trained on extensive data sets, such as OpenAI’s ChatGPT. The AI Act aims to establish safeguards, including copyright protection for creators, in response to generative AI models. It also prohibits AI applications threatening citizens’ rights, like biometric categorization and social scoring.
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Philippines will launch CBDC in two years
The Governor of Bangko Sentral ng Pilipinas (BSP), Eli Remolona, has revealed the central bank’s intention to introduce a wholesale central bank digital currency (CBDC) in the next few years. Remolona explained the details behind the BSP’s plan to develop a CBDC. According to its head, the central bank will not use blockchain technology in the project. Remolona pointed to the examples of Sweden and China, which are developing CBDCs as a digital complement to cash and “rival cryptocurrencies.” He believes the Philippines can replicate their experience. According to the official, the CBDC “would definitely happen” within his term as governor. Responding to the journalist’s questions, he confirmed it could happen in the next two years.
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Honduras bans crypto transactions over fraud concerns
The National Banking and Securities Commission of Honduras has issued a resolution banning the country’s financial institutions from handling crypto. The resolution states that users of cryptocurrencies and financial services based on blockchain technology may be exposed to fraud and operational and legal risks, “including that their acceptance could cease at any time since people are not legally obliged to transact or recognize them as a means of payment.” Due to their unregulated nature, crypto assets are also liable to be used for fraud, money laundering, and financing terrorism. Supervised institutions are also prohibited from holding derivative instruments based on crypto assets.
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