An overview of current news in the crypto space

In our digest, we have reviewed several important crypto-industry news over the past week:

1. The State Duma passed a law on the use of CFA in international settlements
2. Russia’s Finance Ministry supports the use of cryptocurrency mined in Russia for international trade
3. Hungary prepares law on cryptocurrency services of banks
4. UK strengthens controls on cryptocurrencies
5. China strengthens warnings on cryptocurrency risks
6. El Salvador gets 40% return on bitcoin investment
7. South Korea may relax crypto regulation after election

Now for more details. Reading time: 7 minutes.

1. The State Duma has adopted a law on the use of digital financial assets in international settlements
   The State Duma has passed in the third reading a law allowing the use of digital financial assets (DFA) in international settlements. This bill, which represents amendments to the laws “On Currency Regulation and Currency Control” and “On Digital Financial Assets, Digital Currency”, received approval after the necessary amendments were made. This new legislative provision strengthens the position of the Bank of Russia by empowering it to set conditions and prohibitions on transactions with digital assets. Notably, this law will allow Russian businesses to make settlements with partners using digital rights, which, according to Anatoly Aksakov, chairman of the State Duma’s Financial Market Committee, will be able to reduce external influence and sanctions pressure on the country. However, it should be noted that these changes do not apply to cryptocurrency, which is not a digital financial asset under Russian law. 
2. The Russian Ministry of Finance supports the use of cryptocurrency mined in Russia for international commerce
   The Russian Finance Ministry supports the use of cryptocurrency mined through mining in Russia for settlements in international trade. A bill that would allow this could be passed as early as the current spring session of the State Duma, according to Osman Kabaloev, head of the banking regulation division of the Ministry of Finance’s Financial Policy Department. Foreign trade operations will be conducted in foreign jurisdictions, outside the Russian financial circuit. Law enforcement agencies are still working on the details of the amendment. However, the cryptocurrency used must be namainen in Russia, not acquired abroad. This is an important condition, emphasized the representative of the Ministry of Finance.
3. Hungary prepares law on cryptocurrency services of banks
   Hungary is preparing for big changes in the digital asset sector. The Hungarian government has started working on a bill that will open up new opportunities for banks, investment funds and asset managers. They will be able to offer cryptocurrency-related services to their clients, including bitcoin and ether transactions. The project is focused on integrating cryptocurrencies into mainstream financial services, which is expected to transform the economic landscape not only in Hungary but also beyond. Such a move will open up new investment opportunities and improve transaction efficiency. Hungary’s central bank, Magyar Nemzeti Bank (MNB), will regulate and supervise crypto services. The bill takes into account the specifics of the Hungarian digital asset market and complies with the requirements of EU legislation. The new law is expected to come into force in the first half of 2024. The central bank has already stated that it is in no hurry to launch its own stablecoin, as it will not have a significant impact on the country’s financial system.
4. UK strengthens control over cryptocurrencies
   A law will come into force in the UK to strengthen the fight against cybercrime and the illegal use of cryptocurrencies. From April 26, 2024, the National Crime Agency will be given enhanced powers to seize cryptoassets without a court order. The move comes in response to suspicions of illegal or questionable activity related to digital assets. The new Economic Crimes and Corporate Transparency Act will also allow law enforcement agencies to freeze crypto-assets even if the accused are abroad. Cryptocurrency exchanges and wallets will now be able to turn over digital assets to authorities, and if necessary, these assets can be destroyed. These changes are expected to help the UK authorities fight cryptocurrency-related crime more effectively. Along with this, the UK plans to adopt new rules to regulate stablecoins and cryptocurrencies in the next six months.
5. China steps up warnings on cryptocurrency risks
   Due to the growing popularity of bitcoin, China’s state media is urging local investors to remain cautious and refuse to participate in cryptocurrency ETFs. According to an article in Jingji Ribao Economic Daily, cryptocurrencies have yet to become mainstream and entail risks. The article focuses on the fact that despite U.S. permission to launch spot bitcoin ETFs, China continues to support a ban on cryptocurrencies. Beijing-based lawyer Xiao Sa emphasized that the ban prevents foreign dealers from selling cryptocurrency ETFs to Chinese residents and prohibits local investors from purchasing such products directly. Despite the complete ban on cryptocurrency mining and trading, interest in digital assets remains high in China. At the same time, the Liaoning Provincial Police warns investors about the illegality of participating in initial coin offerings (ICOs), and China’s Ministry of Information notes an increase in fraudulent digital yuan applications.
6. El Salvador made a 40% profit from bitcoin investment
   El Salvador’s President Nayib Bukele said in a tweet that the country’s profit from investing in bitcoins amounted to more than 40%. El Salvador invested in the cryptocurrency at an average price of $42,440. Given bitcoin’s current price, over $62,000, the country’s unrealized profits exceeded $64 million, with the country’s government not looking to sell the asset even though it has grown significantly. Bukele criticized the authors of articles that stated the country’s alleged losses when the value of bitcoin drops. He emphasized that journalists are now silent given the rise in the value of the asset. Bukele also said that the main source of bitcoins in El Salvador is the citizenship program, which provides the opportunity to obtain a local passport for a $1 million investment in bitcoin or USDT.
7. South Korea may relax crypto regulation after elections
   Ahead of the April elections in South Korea, there may be a softening of crypto regulation. The emerging new government is considering a spot bitcoin-ETF, which goes against the current regulation of digital assets. The policy change is supported by the country’s two main political forces, the People’s Power Party and the Democratic Party of Korea. Along with this, it is proposed to postpone the entry into force of the tax policy on cryptocurrencies by two years. The initiative comes from the People Power Party, which argues that more thoughtful preparation for the new fiscal regime will require additional time. Importantly, the new government may also consider additional measures to protect retail customers. There were 16,000 reports of cryptocurrency crimes in 2023, a 49% increase from the previous year. Talk of a possible easing of crypto regulation in South Korea comes amid the country’s efforts to protect users of digital assets, as evidenced by a June 2023 law.

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