LAPIN White Paper

BEST REGULATORY 2024
PRACTICES FOR
DIGITAL ASSETS,
BLOCKCHAIN, AND
CBDCS
A Comparative
Analysis and
Recommendations for
Brazilian Policy
Frameworks
WHITE PAPER
Best Regulatory Practices for Digital Assets,

Blockchain, and CBDCs:
A Comparative Analysis and Recommendations

for Brazilian Policy Frameworks
April, 2024
Laboratory of Public Policy and Internet
PROJECT EXECUTION
Laboratory of Public Policy and Internet (Laboratório de
Políticas Públicas e Internet - LAPIN)
PROJECT SUPPORT
Ripple Labs Inc.
AUTHORSHIP
Gabriel Araújo Souto
Mariana Monteiro Freitas
REVIEWED BY
Cynthia Picolo Gonzaga de Azevedo
About Us
Operating from Brazil's capital, the Laboratory of Public Policy and
Internet (LAPIN) stands as a beacon of independent, multidisciplinary
research focused on the intersection of public policy and digital technologies.
Our purpose is to facilitate the formulation of policies that manage the
integration of digital technologies within societal frameworks, by fostering
research, community engagement, and awareness.
Our initiatives include: (i) investigating, analyzing, and elucidating the

societal, economic, ethical, and legal ramifications of digital technologies; (ii)
educating and integrating the community into our outreach; and (iii)
crafting cutting-edge responses to the digital challenges and opportunities
that confront Brazil and Latin America.
These objectives are pursued through our commitment to interdisciplinary

research, educational endeavors, strategic communications, and advocacy
dedicated to regulatory, governance, and policy matters related to innovation
and technology.
To learn more about what we do, please check our website:
lapin.org.br
lapin.org.br
Table of contents
1. INTRODUCTION.......................................... 04
2. SIGNIFICANCE .......................................... 07
3. METHODOLOGY........................................ 08
4. BRAZILIAN OVERVIEW............................. 09
5. GLOBAL OVERVIEW………….………....... 12
5.1 The Americas...................................... 12
5.2 Asia-Pacific.......................................... 14
5.3 Europe………..……………………........ 17
5.4 Middle East………..…………............... 19
5.5 Africa ………..…………….................... 20
6. COMPARATIVE ANALYSIS....................... 22
7. CHALLENGES AND RISKS....................... 25
8. POLICY RECOMMENDATIONS FOR
BRAZIL............................................................ 26
9. REFERENCES............................................ 28
BEST REGULATORY PRACTICES FOR DIGITAL ASSETS, BLOCKCHAIN, AND CBDCS 3

‭Introduction‬
‭Within‬ ‭the‬ ‭fast-changing‬ ‭global‬ ‭economic‬ ‭landscape,‬ ‭digital‬ ‭assets‬‭have‬‭risen‬

‭ s‬‭key‬‭drivers‬‭of‬‭financial‬‭innovation.‬‭Originating‬‭from‬‭simple‬‭images,‬‭documents,‬‭and‬
a
‭valuable‬‭data,‬‭they‬‭have‬‭now‬‭integrated‬‭into‬‭established‬‭financial‬‭ecosystems.‬‭As‬‭they‬
‭continue‬ ‭to‬ ‭evolve‬ ‭and‬ ‭seek‬ ‭to‬ ‭maximize‬ ‭their‬ ‭potential,‬ ‭digital‬ ‭assets‬ ‭prove‬
‭increasingly‬ ‭versatile‬ ‭in‬ ‭uses‬ ‭ranging‬ ‭from‬ ‭enhancing‬ ‭financial‬‭inclusion‬‭—by‬‭offering‬
‭financial‬ ‭services‬ ‭to‬ ‭those‬ ‭without‬ ‭bank‬ ‭accounts‬‭—to‬ ‭increasing‬ ‭efficiencies‬‭,‬
‭streamlining‬ ‭processes‬‭,‬ ‭and‬ ‭lowering‬ ‭costs‬ ‭in‬ ‭international‬ ‭payment‬ ‭transactions.‬
‭Thus,‬ ‭digital‬ ‭assets‬ ‭hold‬ ‭the‬ ‭potential‬ ‭to‬ ‭support‬ ‭a‬ ‭more‬ ‭integrated‬ ‭and‬ ‭productive‬
‭global economy as technology develops.‬
‭There are‬‭two definitions for digital assets‬‭: narrow and broad.‬‭1‬
I‭ n‬‭the‬‭narrow‬‭definition‬‭,‬‭digital‬‭assets‬‭are‬‭created‬‭using‬‭computer‬‭code‬‭and‬‭rely‬
‭on‬‭"consensus‬‭algorithms"‬‭to‬‭initiate‬‭and‬‭verify‬‭transactions‬‭within‬‭them.‬‭A‬‭consensus‬
‭algorithm‬‭2‬ ‭describes‬ ‭the‬ ‭process‬ ‭by‬ ‭which‬ ‭a‬ ‭collective‬ ‭agreement‬ ‭is‬ ‭reached‬ ‭in‬ ‭a‬
‭group.‬ ‭It‬ ‭allows‬ ‭every‬ ‭participant‬ ‭to‬ ‭have‬ ‭a‬ ‭say‬ ‭in‬ ‭the‬ ‭decision,‬ ‭thereby‬ ‭ensuring‬
‭collective‬ ‭acceptance.‬ ‭In‬ ‭essence,‬ ‭it‬ ‭is‬ ‭a‬ ‭way‬ ‭to‬ ‭resolve‬ ‭decisions‬ ‭collectively‬ ‭and‬
‭consensually.‬‭If‬‭the‬‭majority‬‭of‬‭the‬‭group‬‭supports‬‭a‬‭decision,‬‭the‬‭rest‬‭are‬‭compelled‬‭to‬
‭adhere to it.‬
‭ nder‬ ‭the‬ ‭broader‬ ‭definition‬‭,‬ ‭"digital‬ ‭assets"‬ ‭encompass‬ ‭all‬ ‭virtual‬ ‭assets,‬
U
‭circumventing‬‭the‬‭need‬‭for‬‭a‬‭consensus‬‭method‬‭to‬‭secure‬‭and‬‭verify‬‭transactions.‬‭For‬
‭this‬ ‭paper,‬ ‭the‬ ‭definition‬ ‭of‬ ‭digital‬ ‭assets‬ ‭used‬ ‭is‬ ‭the‬ ‭broad‬ ‭definition,‬ ‭focusing‬‭on‬
‭crypto-assets‬‭.‬ ‭Digital‬ ‭assets‬ ‭include‬ ‭all‬ ‭forms‬ ‭of‬ ‭virtual‬ ‭and‬ ‭electronic‬ ‭assets,‬
‭irrespective of how they are legally classified.‬
‭The‬ ‭core‬ ‭of‬ ‭the‬ ‭digital‬ ‭asset‬ ‭market‬ ‭relies‬ ‭on‬ ‭blockchain‬ ‭technology—a‬
‭ istributed‬ ‭ledger‬ ‭that‬ ‭records‬ ‭a‬ ‭continuously‬ ‭expanding‬ ‭sequence‬‭of‬‭transactions‬‭in‬
d
‭blocks‬‭.‭3‬ ‬ ‭The‬‭blockchain‬‭technology‬‭enables‬‭transactions‬‭and‬‭transfers‬‭of‬‭digital‬‭assets‬
‭that‬‭mirror‬‭traditional‬‭stock‬‭exchange‬‭activities‬‭but‬‭are‬‭executed‬‭digitally.‬‭For‬‭example,‬
‭1‬
‭KAAL,‬ ‭Wulf‬ ‭A.‬ ‭Digital‬ ‭asset‬ ‭market‬ ‭evolution.‬ ‭The‬ ‭Journal‬ ‭of‬ ‭Corporation‬ ‭Law‬‭,‬ ‭v.‬ ‭46,‬ ‭p.‬ ‭910,‬ ‭2020.‬
‭ vailable‬‭at:‬‭<‬‭https://jcl.law.uiowa.edu/sites/jcl.law.uiowa.edu/files/2021-08/Kaal_Final_Web_0.pdf‬‭>.‬‭Accessed‬
A
‭on: 17 Dec 2023.‬
‭2‬
‭The‬‭two‬‭main‬‭consensus‬‭algorithms‬‭are‬‭Proof‬‭of‬‭Work‬‭(PoW)‬‭and‬‭Proof‬‭of‬‭Stake‬‭(PoS).‬‭PoW‬‭involves‬‭miners‬
‭solving‬‭complex‬‭mathematical‬‭puzzles‬‭to‬‭generate‬‭blocks‬‭on‬‭the‬‭blockchain‬‭.‬‭The‬‭first‬‭to‬‭solve‬‭the‬‭puzzle‬‭mines‬
‭the‬ ‭block.‬ ‭This‬ ‭process‬ ‭requires‬ ‭powerful‬ ‭computers‬ ‭and‬ ‭consumes‬ ‭a‬ ‭lot‬ ‭of‬ ‭energy.‬ ‭On‬ ‭the‬ ‭other‬ ‭hand,‬‭PoS‬
‭replaces‬ ‭mining‬ ‭with‬‭a‬‭system‬‭where‬‭validators‬‭invest‬‭cryptocurrencies‬‭to‬‭participate.‬‭Validators‬‭earn‬‭rewards‬
‭by‬‭staking‬‭their‬‭claims‬‭on‬‭prospective‬‭blocks,‬‭with‬‭rewards‬‭tied‬‭to‬‭the‬‭size‬‭of‬‭their‬‭investments.‬‭A‬‭validator‬‭is‬
‭selected‬ ‭to‬ ‭generate‬ ‭a‬ ‭new‬ ‭block‬ ‭based‬ ‭on‬ ‭their‬ ‭stake.‬ ‭See‬ ‭BALIGA,‬ ‭Arati.‬ ‭Understanding‬ ‭blockchain‬
‭consensus‬ ‭models‬‭.‬ ‭Persistent,‬ ‭v.‬ ‭4,‬ ‭n.‬ ‭1,‬ ‭2017.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttp://phd.artsedighi.com/wp-content/uploads/2017/09/WP-Understanding-Blockchain-Consensus-Models.pdf‬
‭>. Accessed on: 3 Nov 2023.‬
‭3‬
‭ATZORI,‬‭Marcella.‬‭Blockchain‬‭technology‬‭and‬‭decentralized‬‭governance:‬‭Is‬‭the‬‭state‬‭still‬‭necessary?.‬‭Journal‬
‭of‬ ‭Governance‬ ‭and‬ ‭Regulation‬‭,‬ ‭v.‬ ‭6,‬ ‭n.1,‬ ‭2017.‬ ‭p.‬ ‭45.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://virtusinterpress.org/IMG/pdf/10.22495_jgr_v6_i1_p5.pdf‬‭>.‬‭Accessed on: December 20, 2023.‬
‭4‬
‭ lockchain‬ ‭technology‬ ‭can‬ ‭authenticate‬ ‭the‬ ‭ownership‬ ‭and‬ ‭transaction‬ ‭records‬ ‭of‬
b
‭digital‬ ‭assets,‬ ‭impacting‬ ‭various‬ ‭stakeholders‬ ‭in‬ ‭the‬ ‭securities‬ ‭market‬ ‭such‬ ‭as‬
‭investors,‬ ‭brokers,‬ ‭and‬ ‭regulatory‬ ‭bodies.‬ ‭Additionally,‬ ‭blockchain‬ ‭offers‬ ‭numerous‬
‭advantages‬ ‭for‬ ‭issuers‬ ‭of‬ ‭traditional‬ ‭securities‬ ‭interested‬ ‭in‬ ‭digital‬ ‭assets,‬ ‭including‬
‭reduced costs associated with issuance, operations, and administration.‬
‭ igital‬ ‭assets‬ ‭trace‬ ‭their‬ ‭origins‬ ‭to‬ ‭Bitcoin‬‭,‬ ‭which‬ ‭emerged‬ ‭in‬ ‭2008‬ ‭and‬
D
‭commenced‬ ‭trading‬ ‭in‬ ‭2010,‬‭4‬ ‭defining‬ ‭the‬ ‭category‬ ‭of‬ ‭crypto-assets.‬ ‭Crypto-assets‬
‭represent‬ ‭a‬ ‭subset‬ ‭of‬ ‭digital‬ ‭assets‬ ‭that‬ ‭are‬ ‭built‬ ‭on‬ ‭cryptography‬ ‭and‬ ‭blockchain‬
‭technologies.‬ ‭They‬ ‭cover‬ ‭a‬ ‭broad‬ ‭spectrum‬ ‭of‬ ‭electronic‬ ‭assets,‬ ‭including‬ ‭all‬ ‭digital‬
‭formats, though not all are reliant on‬‭blockchain‬‭or cryptographic foundations.‬
‭ itcoin's‬‭consensus‬‭algorithm‬‭tackles‬‭computational‬‭challenges‬‭to‬‭authenticate‬
B
‭transactions‬ ‭and‬ ‭generate‬ ‭new‬ ‭blocks,‬ ‭facilitating‬ ‭peer-to-peer‬‭5‬ ‭transactions‬ ‭directly‬
‭without‬ ‭any‬ ‭financial‬ ‭or‬ ‭intrinsic‬ ‭backing.‬‭6‬ ‭Each‬ ‭Bitcoin‬ ‭effectively‬ ‭represents‬ ‭a‬
‭transaction‬ ‭within‬ ‭the‬ ‭public‬ ‭ledger.‬ ‭Before‬ ‭inclusion‬ ‭in‬ ‭the‬ ‭blockchain‬‭,‬ ‭miners‬ ‭are‬
‭required‬‭to‬‭validate‬‭each‬‭transaction,‬‭which‬‭then‬‭becomes‬‭part‬‭of‬‭the‬‭ongoing‬‭chain‬‭of‬
‭blocks.‬ ‭The‬ ‭system‬ ‭allows‬ ‭for‬ ‭transactions‬ ‭between‬ ‭sender‬ ‭and‬ ‭recipient‬ ‭without‬
‭intermediaries, enabled by the consensus of all participants on the‬‭blockchain‬‭.‬
‭ ollowing‬‭the‬‭success‬‭of‬‭Bitcoin,‬‭altcoins‬‭7‬‭were‬‭developed‬‭–‬‭a‬‭term‬‭derived‬‭from‬
F
‭the‬‭English‬‭blend‬‭of‬‭"‬‭alternative‬‭"‬‭and‬‭"‭c ‬ oin‬‭,"‬‭indicating‬‭a‬‭digital‬‭currency‬‭alternative‬‭to‬
‭Bitcoin‬‭.‬‭8‬ ‭A‬ ‭coin‬ ‭is‬ ‭an‬ ‭autonomous‬ ‭cryptocurrency,‬ ‭whereas‬ ‭a‬ ‭token‬‭,‬ ‭for‬ ‭example,‬ ‭is‬ ‭a‬
‭digital‬ ‭unit‬ ‭that‬ ‭grants‬ ‭its‬ ‭holder‬ ‭access‬ ‭to‬ ‭a‬ ‭broader‬ ‭crypto-economic‬ ‭system‬ ‭but‬
‭retains‬ ‭utility‬ ‭value.‬ ‭Despite‬ ‭these‬ ‭alternative‬ ‭currencies‬ ‭(‭a ‬ ltcoins‬‭),‬‭Bitcoin‬‭and‬‭Ether,‬
‭the‬‭latter‬‭being‬‭the‬‭cryptocurrency‬‭of‬‭the‬‭Ethereum‬‭blockchain‬‭,‬‭together‬‭accounted‬‭for‬
‭more‬ ‭than‬ ‭half‬ ‭of‬ ‭the‬ ‭crypto-asset‬ ‭market‬ ‭in‬ ‭2023,‬ ‭9‬‭which‬ ‭featured‬ ‭8,866‬ ‭coins‬ ‭and‬
‭tokens‬‭as of December 2023.‬‭10‬
‭4‬
‭DE‬‭LA‬‭HORRA,‬‭Luis‬‭P.;‬‭DE‬‭LA‬‭FUENTE,‬‭Gabriel;‬‭PEROTE,‬‭Javier.‬‭The‬‭drivers‬‭of‬‭Bitcoin‬‭demand:‬‭A‬‭short‬
a‭ nd‬ ‭long-run‬ ‭analysis.‬ ‭International‬ ‭Review‬ ‭of‬ ‭Financial‬ ‭Analysis‬‭,‬ ‭v.‬ ‭62,‬ ‭pp.‬ ‭21-34,‬ ‭2019.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.sciencedirect.com/science/article/abs/pii/S1057521918307208‬‭>.‬‭Accessed on: March 2, 2023.‬
‭5‬
‭Peer-to-peer‬ ‭in‬ ‭this‬ ‭context‬ ‭denotes‬ ‭the‬ ‭direct‬ ‭transfer‬ ‭of‬‭assets‬‭like‬‭digital‬‭currencies‬‭between‬‭individuals,‬
‭bypassing‬ ‭central‬ ‭authorities‬ ‭or‬ ‭middlemen.‬ ‭See‬ ‭DONET,‬ ‭Joan‬ ‭Antoni;‬ ‭PÉREZ-SOLA,‬ ‭Cristina;‬
‭HERRERA-JOANCOMARTÍ,‬ ‭Jordi.‬ ‭The‬ ‭bitcoin‬ ‭P2P‬ ‭network.‬ ‭In:‬ ‭International‬ ‭conference‬ ‭on‬ ‭financial‬
‭cryptography and data security‬‭. Berlin, Heidelberg:‬‭Springer Berlin Heidelberg, 2014. pp. 87-102.‬
‭6‬
‭NAKAMOTO,‬‭Satoshi.‬‭Bitcoin:‬‭A‬‭Peer-to-Peer‬‭Electronic‬‭Cash‬‭System.‬‭Bitcoin.org‬‭,‬‭pp.‬‭1-8,‬‭2008.‬‭Available‬
‭at: <‬‭https://bitcoin.org/bitcoin.pdf‬‭>. Accessed on:‬‭December 20, 2023.‬
‭7‬
‭CHEUNG,‬ ‭Adrian;‬ ‭ROCA,‬ ‭Eduardo;‬ ‭SU,‬ ‭Jen-Je.‬ ‭Crypto-currency‬ ‭bubbles:‬ ‭an‬ ‭application‬ ‭of‬ ‭the‬
‭Phillips–Shi–Yu‬ ‭(2013)‬ ‭methodology‬ ‭on‬ ‭Mt.‬ ‭Gox‬ ‭bitcoin‬ ‭prices.‬ ‭Applied‬ ‭Economics‬‭,‬ ‭v.‬ ‭47,‬ ‭n.‬ ‭23,‬ ‭p.‬‭2349,‬
‭2015.‬
‭8‬
‭An‬ ‭example‬ ‭of‬ ‭an‬ ‭altcoin‬ ‭is‬ ‭XRP,‬ ‭a‬ ‭cryptocurrency‬ ‭from‬ ‭Ripple,‬ ‭a‬ ‭payment‬ ‭protocol‬ ‭that‬ ‭uses‬‭blockchain‬
‭technology to process international monetary transfers.‬
‭9‬
‭STATISTA.‬ ‭Bitcoin‬ ‭(BTC),‬ ‭Ethereum‬ ‭(ETH)‬ ‭dominance—their‬ ‭market‬‭cap‬‭relative‬‭to‬‭the‬‭market‬‭cap‬‭of‬‭all‬
‭other‬ ‭cryptocurrencies‬ ‭in‬ ‭the‬ ‭world—on‬ ‭December‬‭5,‬‭2023.‬‭Statista‬‭Financial‬‭Instruments‬‭&‬‭Investments‬‭,‬
‭2023.‬ ‭Available‬ ‭at:‬ ‭<‭h‬ ttps://www.statista.com/statistics/1269302/crypto-market-share/‬‭>.‬ ‭Accessed‬ ‭on:‬
‭December 23, 2023.‬
‭10‬
‭STATISTA.‬ ‭Number‬ ‭of‬ ‭cryptocurrencies‬ ‭worldwide‬ ‭from‬ ‭2013‬ ‭to‬ ‭December‬ ‭2023.‬ ‭Statista‬ ‭Financial‬
‭Instruments‬ ‭&‬ ‭Investments‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.statista.com/statistics/863917/number-crypto-coins-tokens/‬‭>.‬‭Accessed on: December 23, 2023.‬
‭5‬
‭ ollowing‬ ‭the‬ ‭widespread‬ ‭adoption‬ ‭of‬‭crypto-assets,‬‭central‬‭banks‬‭globally‬‭are‬
F
‭now‬ ‭engaged‬ ‭in‬ ‭discussions‬ ‭about‬ ‭Central‬‭Bank‬‭Digital‬‭Currencies‬‭(CBDCs),‬‭which‬‭are‬
‭digital‬ ‭currencies‬ ‭issued‬ ‭by‬ ‭central‬ ‭banks‬‭.‬ ‭Initially‬ ‭conceptualized‬ ‭by‬ ‭the‬ ‭Bank‬ ‭of‬
‭England's‬ ‭research‬ ‭team‬ ‭in‬ ‭2015,‬ ‭CBDCs‬ ‭have‬ ‭been‬ ‭propelled‬ ‭by‬ ‭the‬ ‭influence‬ ‭of‬
‭cryptocurrencies‬ ‭and‬ ‭the‬ ‭gradual‬ ‭decrease‬ ‭in‬ ‭cash‬ ‭utilization.‬‭11‬ ‭The‬ ‭Avant‬‭smart‬‭card‬
‭system,‬ ‭introduced‬ ‭by‬ ‭the‬ ‭Bank‬ ‭of‬‭Finland‬‭in‬‭the‬‭1990s,‬‭represents‬‭the‬‭pioneer‬‭CBDC,‬
‭remaining unique in its implementation to date.‬‭12‬
‭ espite‬ ‭their‬ ‭genesis‬ ‭in‬ ‭cryptocurrency‬ ‭and‬ ‭blockchain‬ ‭innovations,‬ ‭CBDCs‬

D
‭diverge‬ ‭fundamentally‬ ‭from‬ ‭cryptocurrencies‬‭.‬‭CBDCs‬‭represent‬‭digitized‬‭versions‬‭of‬
‭state-supported‬ ‭national‬ ‭currencies,‬ ‭whereas‬ ‭cryptocurrencies‬ ‭such‬ ‭as‬ ‭stablecoins‬
‭seek‬ ‭to‬ ‭maintain‬ ‭value‬ ‭stability‬ ‭by‬ ‭linking‬ ‭to‬ ‭a‬ ‭basket‬ ‭of‬ ‭privately‬ ‭issued‬ ‭assets,‬
‭operating‬ ‭within‬ ‭the‬ ‭broader‬ ‭crypto‬ ‭ecosystem.‬ ‭Numerous‬ ‭nations‬ ‭contemplating‬
‭CBDC‬ ‭issuance‬ ‭are‬‭adopting‬‭blockchain‬‭technology‬‭for‬‭implementation.‬‭13‬ ‭For‬‭example,‬
‭the‬ ‭central‬ ‭banks‬ ‭of‬ ‭Brazil,‬‭14‬ ‭Sweden,‬ ‭and‬ ‭France‬ ‭have‬ ‭initiated‬ ‭CBDC‬ ‭trials‬ ‭using‬
‭permissioned‬ ‭blockchains‬‭,‬ ‭which‬ ‭are‬ ‭centralized‬ ‭adaptations‬ ‭of‬ ‭the‬ ‭decentralized‬
‭blockchain‬‭technology that support Bitcoin and Ethereum.‬‭15‬
‭11‬
‭GRYM,‬‭Aleksi‬‭et‬‭al.‬‭Lessons‬‭learned‬‭from‬‭the‬‭world's‬‭first‬‭CBDC.‬‭BoF‬‭Economics‬‭Review‬‭,‬‭v.‬‭8,‬‭p.‬‭2,‬‭2020.‬
‭ vailable‬ ‭at:‬ ‭<‬‭https://www.econstor.eu/bitstream/10419/224448/1/1733131086.pdf‬‭>.‬ ‭Accessed‬ ‭on:‬ ‭December‬
A
‭20, 2023.‬
‭12‬
‭Ibid‬‭, p. 1.‬
‭13‬
‭SETHAPUT,‬ ‭Vijak;‬ ‭INNET,‬‭Supachate.‬‭Blockchain‬‭application‬‭for‬‭central‬‭bank‬‭digital‬‭currencies‬‭(CBDC).‬
‭Cluster‬‭Computing‬‭,‬‭p.‬‭1,‬‭2023.‬‭Available‬‭at:‬‭<‬‭https://link.springer.com/article/10.1007/s10586-022-03962-z‬‭>.‬
‭Accessed on December 20, 2023.‬
‭14‬
‭LONGO,‬‭Laelya.‬‭Understanding‬‭how‬‭Drex,‬‭the‬‭cousin‬‭of‬‭Pix‬‭and‬‭the‬‭digital‬‭real,‬‭will‬‭function‬‭in‬‭your‬
‭life.‬ ‭Valor‬ ‭Investe,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://valorinveste.globo.com/produtos/servicos-financeiros/noticia/2023/08/07/primo-do-pix-entenda-como-o‬
‭-drex-o-real-digital-vai-funcionar-na-sua-vida.ghtml‬‭>.‬‭Accessed on: December 14, 2023.‬
‭15‬
‭CHAINANALYSIS.‬ ‭The‬ ‭Current‬ ‭State‬ ‭of‬ ‭Central‬ ‭Bank‬ ‭Digital‬ ‭Currencies‬ ‭(CBDCs)‬ ‭in‬ ‭2023‬‭.‬
‭Chainanalysis‬ ‭Policy‬ ‭&‬ ‭Regulation,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.chainalysis.com/blog/central-bank-digital-currencies-cbdc/‬‭>.‬‭Accessed on: December 20, 2023.‬
‭6‬
‭Significance‬
‭ his‬ ‭white‬ ‭paper‬ ‭is‬ ‭crucial‬ ‭for‬ ‭ongoing‬ ‭discussions‬ ‭in‬ ‭Brazil,‬ ‭particularly‬ ‭given‬
T
‭the‬ ‭recent‬ ‭changes‬ ‭in‬ ‭legislation‬ ‭and‬ ‭regulations‬ ‭concerning‬ ‭the‬ ‭crypto-assets‬
‭industry.‬ ‭The‬ ‭recent‬ ‭implementation‬ ‭of‬ ‭the‬ ‭law‬ ‭Marco‬ ‭Legal‬ ‭das‬ ‭Criptomoedas‬
‭(Cryptocurrency‬ ‭Legal‬ ‭Framework)‬‭16‬‭,‬ ‭establishes‬ ‭a‬ ‭licensing‬ ‭system‬ ‭for‬
‭cryptocurrency‬ ‭exchanges‬ ‭and‬ ‭introduces‬ ‭stricter‬ ‭penalties‬ ‭for‬ ‭digital‬ ‭asset-related‬
‭offenses,‬ ‭underscores‬ ‭the‬ ‭urgent‬ ‭need‬ ‭for‬ ‭effective‬ ‭regulatory‬ ‭integration‬ ‭and‬
‭understanding‬‭.‬ ‭The‬‭late‬‭designation‬‭of‬‭the‬‭Central‬‭Bank‬‭of‬‭Brazil‬‭(BCB)‬‭as‬‭a‬‭regulator,‬
‭in‬ ‭conjunction‬ ‭with‬ ‭the‬ ‭Securities‬ ‭and‬ ‭Exchange‬ ‭Commission‬ ‭(CVM),‬ ‭indicates‬
‭challenges‬‭in‬‭the‬‭practical‬‭implementation‬‭of‬‭the‬‭new‬‭law,‬‭highlighting‬‭the‬‭relevance‬‭of‬
‭comparative research that provides inputs to enhance regulatory debate in Brazil.‬
‭Moreover,‬‭the‬‭BCB's‬‭recent‬‭initiation‬‭of‬‭a‬‭public‬‭consultation‬‭in‬‭December‬‭2023‬
t‭ o‬ ‭establish‬ ‭cryptocurrency‬ ‭market‬ ‭regulations‬ ‭underscores‬ ‭an‬ ‭effort‬ ‭to‬ ‭harmonize‬
‭innovation‬ ‭with‬ ‭security,‬‭17‬ ‭demonstrating‬ ‭the‬ ‭necessity‬ ‭for‬ ‭tailored‬ ‭and‬ ‭informed‬
‭regulatory‬ ‭measures.‬ ‭This‬ ‭research‬ ‭provides‬ ‭valuable‬ ‭guidelines‬ ‭for‬ ‭shaping‬ ‭a‬
‭regulatory‬‭environment‬‭that‬‭promotes‬‭the‬‭healthy‬‭growth‬‭of‬‭the‬‭digital‬‭asset‬‭market‬
‭in‬ ‭Brazil‬ ‭while‬ ‭protecting‬ ‭investors‬ ‭and‬ ‭the‬ ‭integrity‬ ‭of‬ ‭the‬ ‭financial‬ ‭system.‬
‭Investigating‬ ‭global‬ ‭best‬ ‭practices‬ ‭in‬ ‭blockchain‬ ‭and‬ ‭CBDCs,‬ ‭highlighted‬ ‭by‬ ‭the‬
‭upcoming‬ ‭introduction‬ ‭of‬ ‭the‬ ‭DREX‬‭18‬ ‭digital‬ ‭currency‬ ‭by‬ ‭the‬ ‭BCB,‬ ‭will‬ ‭aid‬ ‭in‬
‭constructing‬ ‭a‬ ‭strong‬ ‭regulatory‬ ‭structure‬ ‭and‬ ‭enhancing‬ ‭financial‬ ‭inclusion‬
‭nationwide.‬
‭16‬
‭BRAZIL.‬ ‭Presidency‬ ‭of‬ ‭the‬ ‭Republic.‬ ‭Law‬ ‭No.‬ ‭14,478,‬ ‭of‬ ‭December‬ ‭21,‬‭2022‬‭.‬‭This‬‭regulation‬‭stipulates‬
r‭ equirements‬ ‭for‬ ‭virtual‬ ‭asset‬ ‭service‬ ‭operations‬ ‭and‬ ‭regulatory‬ ‭oversight;‬ ‭it‬‭modifies‬‭Decree-Law‬‭No.‬‭2.848‬
‭from‬ ‭December‬ ‭7,‬ ‭1940‬ ‭(Criminal‬ ‭Code),‬ ‭to‬ ‭address‬ ‭fraud‬ ‭involving‬ ‭virtual‬ ‭assets,‬ ‭securities,‬ ‭or‬ ‭financial‬
‭instruments;‬‭and‬‭updates‬‭Law‬‭No.‬‭7.492‬‭from‬‭June‬‭16,‬‭1986,‬‭regarding‬‭crimes‬‭against‬‭the‬‭financial‬‭system,‬‭and‬
‭Law‬ ‭No.‬ ‭9.613‬ ‭from‬ ‭March‬ ‭3,‬ ‭1998,‬ ‭concerning‬‭anti-money‬‭laundering‬‭measures,‬‭to‬‭encompass‬‭virtual‬‭asset‬
‭service‬ ‭providers.‬ ‭Available‬ ‭at:‬ ‭<‬‭http://www.planalto.gov.br/ccivil_03/_ato2019-2022/2022/lei/L14478.htm‬‭>.‬
‭Accessed on: December 15, 2023.‬
‭17‬
‭BRAZIL.‬‭Central‬‭Bank‬‭of‬‭Brazil.‬‭Public‬‭Consultation‬‭Notice‬‭No.‬‭97/2023,‬‭dated‬‭December‬‭14,‬‭2023‬‭(No.‬
‭97/2023)‬‭.‬ ‭Discloses‬ ‭a‬ ‭public‬ ‭consultation‬ ‭in‬ ‭the‬ ‭form‬ ‭of‬ ‭a‬ ‭public‬ ‭subsidy‬ ‭collection,‬ ‭aiming‬ ‭to‬ ‭gather‬
‭contributions‬‭and‬‭information‬‭for‬‭the‬‭drafting,‬‭by‬‭the‬‭Central‬‭Bank‬‭of‬‭Brazil,‬‭of‬‭regulations‬‭concerning‬‭virtual‬
‭assets‬ ‭as‬ ‭referred‬ ‭to‬ ‭in‬ ‭Law‬ ‭No.‬ ‭14.478,‬ ‭dated‬ ‭December‬ ‭21,‬ ‭2022.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www3.bcb.gov.br/audpub/DetalharAudienciaPage?4&audienciaId=581‬‭>.‬ ‭Accessed‬ ‭on:‬ ‭December‬ ‭15,‬
‭2023.‬
‭18‬
‭BRAZIL.‬ ‭Central‬ ‭Bank‬ ‭of‬ ‭Brazil.‬ ‭Launch‬ ‭of‬ ‭DREX.‬ ‭BCB‬ ‭website‬‭,‬ ‭2024.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.bcb.gov.br/meubc/faqs/p/lancamento-do-drex‬‭>.‬‭Accessed on: December 15, 2023.‬
‭7‬
‭Methodology‬
‭The‬ ‭methodology‬ ‭employed‬ ‭centered‬ ‭on‬ ‭identifying‬ ‭guidelines‬ ‭that‬ ‭govern‬

‭ igital‬ ‭assets‬‭,‬ ‭blockchain‬ ‭technology,‬ ‭and‬ ‭CBDCs‬‭.‬ ‭The‬ ‭objective‬ ‭of‬ ‭the‬ ‭study‬ ‭is‬ ‭to‬
d
‭grasp‬‭how‬‭different‬‭legal‬‭frameworks‬‭globally‬‭have‬‭embraced‬‭these‬‭novel‬‭technologies‬
‭to derive regulatory insights for Brazil.‬
‭In‬ ‭selecting‬ ‭jurisdictions‬ ‭for‬ ‭research,‬ ‭factors‬ ‭considered‬ ‭included‬ ‭(i)‬ ‭the‬
‭ aturity‬ ‭of‬ ‭the‬ ‭digital‬ ‭asset‬ ‭market,‬ ‭(ii)‬ ‭the‬ ‭adoption‬ ‭of‬ ‭blockchain‬ ‭technologies,‬ ‭(iii)‬
m
‭CBDC‬ ‭initiatives,‬ ‭(iv)‬ ‭geographic‬ ‭representation,‬ ‭and‬ ‭(v)‬ ‭economic‬ ‭development,‬ ‭to‬
‭ensure‬‭a‬‭comprehensive,‬‭diverse,‬‭and‬‭balanced‬‭comparative‬‭analysis.‬‭The‬‭scope‬‭of‬‭the‬
‭analysis‬‭was‬‭defined‬‭through‬‭a‬‭bibliographic‬‭survey‬‭of‬‭countries‬‭that‬‭encompassed‬‭at‬
‭least one of the three aforementioned themes.‬
‭ he‬ ‭findings‬‭from‬‭different‬‭legal‬‭jurisdictions‬‭are‬‭explored‬‭through‬‭a‬‭regionally‬
T
‭segmented‬ ‭comparative‬ ‭analysis‬ ‭to‬ ‭shed‬ ‭light‬ ‭on‬ ‭global‬ ‭regulatory‬ ‭approaches‬ ‭to‬
‭digital assets,‬‭blockchain‬‭, and CBDCs.‬
‭The‬‭analysis‬‭began‬‭with‬‭a‬‭review‬‭of‬‭Brazil's‬‭regulatory‬‭history‬‭concerning‬‭digital‬
‭ ssets,‬‭blockchain‬‭,‬‭and‬‭CBDCs‬‭This‬‭was‬‭followed‬‭by‬‭a‬‭global‬‭examination‬‭of‬‭regulatory‬
a
‭frameworks,‬ ‭with‬ ‭countries‬ ‭categorized‬‭by‬‭their‬‭geographical‬‭regions.‬‭A‬‭comparative‬
‭study‬ ‭was‬ ‭then‬ ‭performed‬ ‭to‬ ‭discern‬ ‭common‬ ‭regulatory‬ ‭themes.‬ ‭In‬‭conclusion‬‭,‬‭the‬
‭study‬ ‭identified‬ ‭regulatory‬ ‭challenges‬ ‭and‬ ‭risks‬ ‭related‬ ‭to‬ ‭digital‬ ‭assets,‬ ‭blockchain‬‭,‬
‭and CBDCs, offering recommendations derived from the study’s insights.‬
‭8‬
‭Overview of Brazil‬
‭Brazil‬ ‭regulated‬ ‭its‬ ‭crypto-asset‬ ‭market‬ ‭at‬ ‭the‬ ‭end‬ ‭of‬ ‭2022‬ ‭through‬ ‭the‬
‭ nactment‬ ‭of‬ ‭Bill‬ ‭4.401/2021‬ ‭into‬ ‭Law‬ ‭14.478/2022,‬ ‭known‬ ‭as‬ ‭"‬‭Marco‬ ‭Legal‬ ‭das‬
e
‭Criptomoedas‬‭",‬‭or‬‭Cryptocurrency‬‭Legal‬‭Framework.‬‭19‬ ‭This‬‭law‬‭clarified‬‭definitions‬‭and‬
‭accountability‬ ‭within‬ ‭the‬ ‭Brazilian‬ ‭market,‬‭notably‬‭defining‬‭a‬‭virtual‬‭asset‬‭in‬‭Article‬‭3‬
‭as‬ ‭"‬‭a‬ ‭digital‬ ‭representation‬ ‭of‬ ‭value‬ ‭that‬‭can‬‭be‬‭electronically‬‭traded‬‭or‬‭transferred‬‭and‬
‭used‬ ‭for‬ ‭payment‬ ‭or‬ ‭investment‬ ‭purposes‬‭".‬‭20‬ ‭Furthermore,‬ ‭it‬ ‭required‬ ‭that‬ ‭all‬
‭companies,‬ ‭both‬ ‭domestic‬ ‭and‬ ‭international,‬ ‭secure‬ ‭a‬ ‭license‬ ‭from‬ ‭the‬ ‭established‬
‭regulatory‬ ‭body,‬‭21‬ ‭the‬ ‭BCB,‬‭22‬ ‭to‬ ‭operate‬ ‭within‬ ‭Brazil,‬ ‭along‬ ‭with‬ ‭implementing‬ ‭other‬
‭regulatory measures.‬
‭Following‬ ‭the‬ ‭introduction‬ ‭of‬ ‭the‬ ‭Cryptocurrency‬ ‭Legal‬ ‭Framework,‬ ‭Brazil‬ ‭has‬
‭ ositioned‬ ‭itself‬ ‭among‬ ‭a‬ ‭select‬ ‭few‬ ‭countries‬‭23‬ ‭that‬ ‭are‬ ‭either‬ ‭equipped‬ ‭with‬
p
‭dedicated‬ ‭legislation‬ ‭or‬ ‭are‬ ‭actively‬ ‭engaging‬ ‭in‬ ‭discussions‬ ‭to‬ ‭oversee‬ ‭the‬
‭cryptocurrency‬ ‭market‬ ‭Notwithstanding,‬ ‭the‬ ‭regulatory‬ ‭landscape‬ ‭in‬ ‭Brazil‬ ‭remains‬
‭under‬ ‭development,‬ ‭with‬ ‭the‬ ‭anticipation‬ ‭that‬ ‭the‬ ‭BCB‬ ‭will‬ ‭establish‬ ‭detailed‬
‭regulatory‬‭guidelines‬‭by‬‭2024‬‭.‬‭24‬ ‭Due‬‭to‬‭the‬‭ongoing‬‭nature‬‭of‬‭the‬‭process‬‭and‬‭the‬‭lack‬
‭19‬
‭BRAZIL.‬ ‭Presidency‬ ‭of‬ ‭the‬ ‭Republic.‬ ‭Law‬ ‭No.‬‭14,478,‬‭of‬‭December‬‭21,‬‭2022‬‭.‬‭The‬‭regulation‬‭establishes‬
p‭ rotocols‬ ‭for‬ ‭virtual‬ ‭asset‬ ‭service‬ ‭offerings‬ ‭and‬ ‭regulatory‬ ‭compliance‬ ‭for‬ ‭such‬ ‭providers.‬ ‭It‬ ‭updates‬ ‭the‬
‭Decree-Law‬ ‭No.‬ ‭2848‬ ‭of‬ ‭December‬ ‭7,‬ ‭1940,‬ ‭to‬‭define‬‭fraud‬‭involving‬‭virtual‬‭assets,‬‭securities,‬‭and‬‭financial‬
‭assets‬ ‭as‬ ‭a‬ ‭criminal‬ ‭offense.‬ ‭Furthermore,‬‭it‬‭revises‬‭Law‬‭No.‬‭7492‬‭from‬‭June‬‭16,‬‭1986,‬‭which‬‭defines‬‭crimes‬
‭against‬‭the‬‭national‬‭financial‬‭system,‬‭and‬‭Law‬‭No.‬‭9613‬‭from‬‭March‬‭3,‬‭1998,‬‭regarding‬‭money‬‭laundering,‬‭to‬
‭incorporate‬ ‭virtual‬ ‭asset‬ ‭service‬ ‭providers‬ ‭under‬ ‭its‬ ‭provisions.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttp://www.planalto.gov.br/ccivil_03/_ato2019-2022/2022/lei/L14478.htm‬‭>.‬‭Accessed on: December 15, 2023.‬
‭20‬
‭Law‬ ‭14.478/2022,‬ ‭art.‬ ‭3‭:‬‬ ‭For‬ ‭the‬ ‭purposes‬ ‭of‬ ‭this‬ ‭Law,‬ ‭a‬ ‭virtual‬ ‭asset‬ ‭is‬ ‭characterized‬ ‭as‬ ‭a‬ ‭digital‬ ‭value‬
‭marker‬‭that‬‭is‬‭exchangeable‬‭or‬‭transferable‬‭through‬‭electronic‬‭means,‬‭utilized‬‭either‬‭for‬‭payment‬‭or‬‭investment‬
‭objectives,‬‭excluding:‬‭I‬‭-‬‭both‬‭domestic‬‭and‬‭international‬‭currency‬‭forms;‬‭II‬‭-‬‭electronic‬‭currency‬‭as‬‭outlined‬‭in‬
‭Law‬ ‭No.‬ ‭12.865,‬ ‭dated‬ ‭October‬ ‭9,‬ ‭2013;‬ ‭III‬ ‭-‬ ‭devices‬ ‭granting‬ ‭rights‬ ‭to‬ ‭designated‬ ‭goods‬ ‭or‬ ‭services,‬ ‭or‬
‭advantages‬‭deriving‬‭from‬‭such,‬‭like‬‭loyalty‬‭rewards;‬‭IV‬‭-‬‭asset‬‭representations‬‭whose‬‭issuance‬‭and‬‭management‬
‭are‬‭legislated,‬‭including‬‭securities‬‭and‬‭financial‬‭assets.‬‭Sole‬‭paragraph.‬‭The‬‭authority‬‭to‬‭define‬‭which‬‭financial‬
‭assets‬ ‭will‬ ‭be‬ ‭regulated‬‭for‬‭the‬‭purposes‬‭of‬‭this‬‭Law‬‭will‬‭be‬‭vested‬‭in‬‭a‬‭federal‬‭public‬‭administration‬‭body‬‭as‬
‭determined by an act of the Executive Power.‬
‭21‬
‭Law 14,478/2022, art. 7, item I.‬
‭22‬
‭GOLVEIA,‬ ‭Vinícius.‬ ‭The‬ ‭Central‬ ‭Bank's‬ ‭live‬ ‭briefing‬ ‭detailing‬ ‭the‬ ‭forthcoming‬ ‭regulatory‬ ‭framework‬‭for‬
‭cryptocurrencies‬ ‭in‬ ‭Brazil.‬ ‭Livecoins‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://livecoins.com.br/bc-explica-como-sera-a-regulacao-das-criptomoedas/‬‭>.‬‭Accessed on: March 2, 2024.‬
‭23‬
‭NAPOLITANO,‬ ‭Elizabeth.‬ ‭42‬ ‭Different‬ ‭Countries‬ ‭Discussed‬ ‭or‬‭Passed‬‭Crypto‬‭Regulations,‬‭Legislation‬‭in‬
‭2023:‬ ‭PwC.‬ ‭CoinDesk‬ ‭Policy‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.coindesk.com/policy/2023/12/19/42-different-countries-discussed-or-passed-crypto-regulations-le‬
‭gislation-in-2023-pwc/‬‭>.‬ ‭Accessed‬ ‭on:‬ ‭March‬ ‭2,‬ ‭2024;‬ ‭PRICEWATERHOUSECOOPERS‬ ‭LLP.‬ ‭PwC‬ ‭Global‬
‭Crypto‬ ‭Regulation‬ ‭Report‬ ‭2023:‬ ‭Towards‬ ‭global‬ ‭regulatory‬ ‭clarity.‬ ‭PwC‬ ‭Website‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.pwc.com/gx/en/about/new-ventures/global-crypto-regulation-report-2023.html‬‭>.‬ ‭Accessed‬ ‭on:‬
‭March 2, 2024.‬
‭24‬
‭BRAZIL.‬‭House‬‭of‬‭Representatives.‬‭The‬‭Central‬‭Bank‬‭expects‬‭to‬‭complete‬‭regulation‬‭of‬‭the‬‭cryptocurrency‬
‭market‬ ‭by‬ ‭mid-2024.‬ ‭Agência‬ ‭Câmara‬ ‭de‬ ‭Notícias‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.camara.leg.br/noticias/993729-banco-central-espera-concluir-regulacao-do-mercado-de-criptomoe‬
‭das-ate-meados-de-2024/‬‭>. Accessed on: Jan 10, 2024.‬
‭9‬
‭ f‬ ‭fixed‬ ‭deadlines,‬ ‭the‬ ‭BCB‬‭has‬‭advocated‬‭for‬‭cryptocurrency‬‭regulations‬‭to‬‭converge‬
o
‭with Brazil's CBDC (Drex)‬‭25‬‭, Pix, Open Finance,‬‭26‬ ‭among‬‭other sectors.‬
‭ espite‬ ‭obstacles‬ ‭in‬ ‭aligning‬ ‭diverse‬ ‭stakeholder‬ ‭interests‬ ‭and‬ ‭establishing‬

D
‭deadlines‬ ‭for‬ ‭objectives‬ ‭and‬ ‭launches,‬ ‭it‬ ‭is‬ ‭vital‬ ‭to‬ ‭maintain‬ ‭an‬ ‭optimistic‬ ‭outlook‬
‭towards‬ ‭2024‬ ‭and‬ ‭beyond,‬ ‭driven‬ ‭by‬ ‭palpable‬ ‭innovations‬ ‭like‬ ‭PIX.‬‭The‬‭BCB‬‭alongside‬
‭the‬ ‭Securities‬ ‭and‬ ‭Exchange‬ ‭Commission‬ ‭(CVM)‬ ‭has‬ ‭been‬ ‭engaging‬ ‭in‬ ‭sandboxes‬‭,‬
‭experiments‬ ‭to‬ ‭explore‬ ‭the‬ ‭potentials‬ ‭and‬ ‭hurdles‬ ‭associated‬ ‭with‬ ‭blockchain‬
‭technology.‬‭27‬ ‭An‬ ‭example‬ ‭is‬ ‭BCB's‬ ‭Interdepartmental‬ ‭Tokenization‬ ‭Group‬ ‭(GTI‬
‭Tokenization),‬ ‭which‬ ‭is‬ ‭expected‬ ‭to‬ ‭release‬ ‭a‬ ‭report‬ ‭on‬‭asset‬‭registration‬‭on‬‭the‬‭Drex‬
‭platform in 2024.‬‭28‬
‭Within‬ ‭this‬ ‭framework‬ ‭of‬ ‭innovation,‬‭Drex‬‭stands‬‭out‬‭as‬‭a‬‭pivotal‬‭development,‬

‭ ith‬‭the‬‭digital‬‭transformation‬‭of‬‭the‬‭Brazilian‬‭Real‬‭recognized‬‭by‬‭regulatory‬‭bodies‬‭as‬
w
‭a‬ ‭significant‬ ‭evolution‬ ‭in‬ ‭the‬ ‭financial‬ ‭system.‬ ‭The‬ ‭guiding‬ ‭principle‬ ‭behind‬ ‭Drex‬
‭focuses‬ ‭on‬ ‭the‬ ‭inevitability‬ ‭of‬ ‭new‬ ‭regulations‬ ‭in‬ ‭the‬ ‭sector‬ ‭and‬ ‭the‬ ‭decentralization‬
‭efforts that the Central Bank of Brazil aims to promote.‬
‭ he‬‭digital‬‭currency‬‭of‬‭Brazil‬‭is‬‭perceived‬‭as‬‭a‬‭catalyst‬‭with‬‭significant‬‭potential‬
T
‭to‬ ‭enhance‬ ‭the‬ ‭tokenization‬ ‭ecosystem‬‭29‬ ‭and‬ ‭overall‬‭financial‬‭transaction‬‭processes.‬
‭The‬ ‭anticipated‬ ‭deployment‬ ‭of‬ ‭the‬ ‭Drex‬ ‭currency‬ ‭is‬ ‭poised‬ ‭to‬ ‭streamline‬ ‭operational‬
‭procedures‬‭and‬‭cut‬‭down‬‭the‬‭expenses‬‭linked‬‭to‬‭financial‬‭transactions.‬‭Furthermore,‬‭it‬
‭promises‬‭enhanced‬‭efficiency,‬‭ease‬‭of‬‭use,‬‭and‬‭interoperability,‬‭all‬‭while‬‭supporting‬‭the‬
‭development of a unified and updated digital financial framework.‬‭30‬
‭ he‬ ‭enthusiasm‬ ‭among‬ ‭policymakers‬‭for‬‭Brazil’s‬‭new‬‭digital‬‭currency,‬‭the‬‭Drex,‬

T
‭is‬ ‭largely‬ ‭due‬ ‭to‬ ‭its‬ ‭underlying‬ ‭technology.‬ ‭The‬ ‭currency‬ ‭leverages‬ ‭a‬
‭blockchain‬‭-based‬ ‭framework‬ ‭ensuring‬ ‭decentralization‬ ‭and‬ ‭robust‬ ‭security‬ ‭against‬
‭25‬
‭MALAR,‬‭João‬‭Pedro.‬‭Brazil's‬‭Central‬‭Bank‬‭Wants‬‭to‬‭Bring‬‭Cryptocurrencies‬‭"Closer"‬‭with‬‭Drex,‬‭Says‬
‭ ampos‬
C ‭Neto‬‭.‬ ‭Exame,‬ ‭Future‬ ‭of‬ ‭Money,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‬‭https://exame.com/future-of-money/banco-central-trazer-criptomoedas-perto-drex-campos-neto/‬‭>.‬ ‭Accessed‬
‭on: March 2, 2024.‬
‭26‬
‭BRAZIL.‬ ‭Ministry‬ ‭of‬ ‭Economy.‬ ‭Regulation‬ ‭will‬ ‭integrate‬‭bitcoin‬‭and‬‭other‬‭cryptocurrencies‬‭with‬‭Pix,‬
‭Open‬ ‭Banking,‬ ‭and‬ ‭the‬ ‭Digital‬ ‭Real,‬ ‭according‬ ‭to‬ ‭the‬ ‭President‬ ‭of‬ ‭the‬ ‭Central‬ ‭Bank.‬ ‭GOV.br,‬ ‭2022.‬
‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.gov.br/economia/pt-br/orgaos/orgaos-colegiados/conselho-de-recursos-do-sistema-financeiro-naci‬
‭onal/acesso-a-informacao/noticias/2022/regulacao-vai-unir-bitcoin-e-criptomoedas-com-pix-open-banking-e-rea‬
‭l-digital-diz-presidente-do-bc‬‭>. Accessed on: March‬‭2, 2024.‬
‭27‬
‭HARADA,‬ ‭Robson.‬ ‭The‬ ‭role‬ ‭of‬ ‭CBDCs‬ ‭in‬ ‭a‬ ‭new‬ ‭tokenized‬ ‭economy.‬ ‭MIT‬ ‭Technology‬ ‭Review‬‭,‬ ‭2023.‬
‭Available‬ ‭at:‬‭<‬‭https://mittechreview.com.br/o-papel-das-cbdcs-em-uma-nova-economia-tokenizada/‬‭>.‬‭Accessed‬
‭on: March 2, 2024.‬
‭28‬
‭BLOCKNEWS.‬ ‭Tokenization‬ ‭and‬ ‭integration‬ ‭of‬ ‭Drex‬ ‭with‬ ‭public‬ ‭networks‬ ‭will‬ ‭be‬‭on‬‭the‬‭BC's‬‭agenda‬‭in‬
‭2024.‬ ‭FI‬ ‭Insiders‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://finsiders.com.br/parceiros/blocknews/tokenizacao-e-integracao-do-drex-com-redes-publicas-estarao-na-‬
‭agenda-do-bc-em-2024/‬‭>. Accessed on: March 1, 2024.‬
‭29‬
‭CRYPTO‬ ‭ID.‬ ‭Financial‬ ‭digitalization‬ ‭in‬ ‭Brazil:‬ ‭DREX‬ ‭and‬ ‭its‬ ‭potential‬ ‭for‬ ‭tokenization‬ ‭of‬ ‭the‬ ‭economy.‬
‭Crypto‬ ‭ID‬ ‭Website‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://cryptoid.com.br/identidade-digital-destaques/digitalizacao-financeira-no-brasil-drex-e-seu-potencial-de-‬
‭tokenizacao-da-economia/‬‭>. Accessed on: March 2, 2024.‬
‭30‬
‭Id.‬ ‭Why‬ ‭does‬ ‭the‬ ‭idea‬ ‭of‬ ‭Drex‬ ‭go‬ ‭beyond‬ ‭a‬ ‭digital‬ ‭currency?‬ ‭Crypto‬ ‭ID‬ ‭Website‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://cryptoid.com.br/criptografia-identificacao-digital-id-biometria/por-que-a-ideia-do-drex-vai-alem-de-um‬
‭a-moeda-digital/‬‭>. Accessed on: March 2, 2024.‬
‭10‬
t‭ ampering‬‭.‬ ‭This‬ ‭interest‬ ‭signifies‬ ‭a‬ ‭strategic‬ ‭intent‬ ‭among‬ ‭legislators‬ ‭to‬ ‭extend‬
‭blockchain‬ ‭technology's‬ ‭applications‬ ‭beyond‬ ‭its‬ ‭current‬ ‭use.‬ ‭An‬ ‭examination‬ ‭of‬ ‭the‬
‭National‬ ‭Congress’s‬ ‭online‬ ‭database‬ ‭indicates‬ ‭that,‬ ‭over‬ ‭six‬ ‭years‬ ‭from‬ ‭2017‬ ‭to‬ ‭2023,‬
‭there‬ ‭were‬ ‭52‬ ‭legislative‬ ‭entries‬ ‭concerning‬ ‭blockchain‬‭,‬ ‭31‬‭encompassing‬ ‭a‬ ‭variety‬ ‭of‬
‭forms‬ ‭such‬ ‭as‬ ‭bills‬ ‭and‬ ‭requests‬ ‭for‬ ‭both‬‭public‬‭hearings‬‭and‬‭the‬‭formation‬‭of‬‭inquiry‬
‭commissions.‬
‭The‬ ‭available‬ ‭data‬ ‭illustrates‬ ‭that‬ ‭in‬ ‭addition‬ ‭to‬ ‭sector-specific‬ ‭regulatory‬
‭ odies‬‭such‬‭as‬‭the‬‭Central‬‭Bank‬‭of‬‭Brazil,‬‭Securities‬‭and‬‭Exchange‬‭Commission‬‭(CVM),‬
b
‭and‬‭Superintendence‬‭of‬‭Private‬‭Insurance‬‭(Susep),‬‭the‬‭National‬‭Congress‬‭has‬‭actively‬
‭pursued‬ ‭a‬ ‭series‬ ‭of‬ ‭initiatives‬ ‭aimed‬ ‭at‬ ‭regulating‬ ‭technological‬ ‭applications‬‭.‬
‭Legislative‬‭initiatives‬‭from‬‭2023‬‭encompass‬‭proposals‬‭to‬‭deploy‬‭blockchain‬‭technology‬
‭for‬ ‭combating‬ ‭illegal‬ ‭mining,‬ ‭32‬‭enabling‬ ‭cities‬ ‭within‬ ‭Brazil‬ ‭to‬ ‭create‬ ‭their‬ ‭own‬ ‭digital‬
‭currencies‬ ‭known‬ ‭as‬ ‭social‬ ‭currencies,‬‭33‬ ‭and‬ ‭utilizing‬ ‭blockchain‬ ‭to‬ ‭boost‬ ‭the‬
‭transparency and security of public data‬‭34‬‭.‬
I‭ t‬ ‭is‬ ‭noteworthy‬ ‭that‬ ‭Roberto‬ ‭Campos‬ ‭Neto,‬ ‭the‬ ‭incumbent‬ ‭President‬ ‭of‬ ‭the‬
‭Central‬ ‭Bank‬ ‭of‬ ‭Brazil,‬ ‭will‬ ‭face‬ ‭the‬ ‭pivotal‬ ‭task‬ ‭of‬ ‭consolidating‬ ‭the‬ ‭infrastructures‬
‭related‬ ‭to‬ ‭Drex‬ ‭and‬‭blockchain‬‭35‬ ‭technologies‬‭in‬‭his‬‭final‬‭year‬‭of‬‭tenure‬‭in‬‭2024,‬‭ahead‬
‭of‬‭the‬‭transition‬‭to‬‭the‬‭subsequent‬‭leadership.‬‭The‬‭BCB's‬‭regulatory‬‭agenda‬‭for‬‭2024‬‭36‬
‭has‬ ‭been‬ ‭firmly‬ ‭established,‬ ‭with‬ ‭a‬ ‭strategic‬ ‭focus‬ ‭on‬ ‭Open‬ ‭Finance,‬ ‭Drex,‬ ‭and‬
‭advancing the tokenization process.‬
‭31‬
‭BRAZIL.‬‭National‬‭Congress.‬‭Projects‬‭and‬‭Legislative‬‭Materials‬‭-‬‭Propositions‬‭section.‬‭Senate‬‭website‬‭,‬‭2024.‬
‭ vailable‬
A ‭at:‬
‭<‭h‬ ttps://www6g.senado.leg.br/busca-congresso/?colecao=Projetos+e+Matérias+-+Proposições&q=blockchain‬‭>.‬
‭Accessed on: Jan 10, 2024.‬
‭32‬
‭BRAZIL.‬ ‭House‬ ‭of‬ ‭Representatives.‬ ‭Bill‬ ‭936/2023‬ ‭from‬ ‭March‬ ‭07,‬ ‭2023‬‭.‬ ‭Adds‬‭articles‬‭3º-A,‬‭3º-B,‬‭3º-C,‬
‭3º-D,‬‭and‬‭3º-E‬‭to‬‭Law‬‭No.‬‭11.685,‬‭dated‬‭June‬‭2,‬‭2008,‬‭which‬‭establishes‬‭the‬‭Statute‬‭of‬‭the‬‭Miner,‬‭and‬‭provides‬
‭other‬ ‭measures;‬ ‭amends‬ ‭Article‬ ‭38‬‭of‬‭Law‬‭No.‬‭12.844,‬‭dated‬‭July‬‭19,‬‭2013,‬‭and‬‭Article‬‭3‬‭of‬‭Law‬‭No.‬‭7.766,‬
‭dated‬‭May‬‭11,‬‭1989,‬‭to‬‭adopt‬‭measures‬‭to‬‭combat‬‭illegal‬‭gold‬‭mining‬‭and‬‭trading‬‭in‬‭Brazil,‬‭and‬‭provides‬‭other‬
‭measures.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.camara.leg.br/proposicoesWeb/fichadetramitacao/?idProposicao=2350369‬‭>.‬ ‭Accessed‬ ‭on:‬ ‭March‬
‭2, 2024.‬
‭33‬
‭Id.‬ ‭Bill‬ ‭4476/2023‬ ‭of‬ ‭September‬ ‭14,‬ ‭2023‬‭.‬ ‭Defines‬ ‭social‬ ‭currencies‬ ‭and‬ ‭regulates‬ ‭their‬ ‭issuance‬ ‭and‬
‭transactions‬ ‭through‬ ‭distributed‬ ‭ledger‬ ‭technology.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=2368363&fichaAmigavel=nao‬‭>.‬
‭Accessed on: March 2, 2024.‬
‭34‬
‭Id.‬ ‭PL‬ ‭2987/2023‬ ‭of‬ ‭June‬ ‭12,‬ ‭2023.‬ ‭Amends‬ ‭Law‬ ‭No.‬ ‭12,527,‬ ‭of‬ ‭November‬ ‭18,‬ ‭2011,‬ ‭to‬ ‭ensure‬ ‭the‬
‭immutability,‬ ‭auditability,‬ ‭and‬ ‭information‬ ‭security.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=2368363&fichaAmigavel=nao‬‭>.‬
‭35‬
‭AMANTÉA,‬ ‭Rose.‬ ‭In‬ ‭his‬ ‭last‬ ‭year‬ ‭at‬ ‭the‬ ‭Central‬ ‭Bank,‬ ‭Campos‬ ‭Neto‬ ‭has‬ ‭the‬ ‭challenge‬ ‭of‬ ‭resisting‬
‭pressure‬ ‭and‬ ‭maintaining‬ ‭his‬ ‭legacy.‬ ‭Gazeta‬ ‭do‬ ‭Povo,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.gazetadopovo.com.br/economia/em-ultimo-ano-no-bc-campos-neto-tem-desafio-de-resistir-a-pres‬
‭soes-e-manter-legado/‬‭>. Accessed on: March 2, 2024.‬
‭36‬
‭BAISI,‬ ‭Anna.‬ ‭Pix,‬ ‭open‬ ‭finance,‬‭drex‬‭and‬‭tokenization‬‭are‬‭pillars‬‭in‬‭the‬‭Central‬‭Bank's‬‭2024‬‭agenda‬‭.‬
‭Mobiletime,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.mobiletime.com.br/noticias/08/11/2023/pix-open-finance-drex-e-tokenizacao-sao-pilares-na-agen‬
‭da-de-2024-do-bc/‬‭>. Accessed on: March 2, 2024.‬
‭11‬
‭Global Overview‬
‭Americas‬
‭ he‬ ‭United‬ ‭States‬ ‭of‬ ‭America‬‭(USA)‬‭does‬‭not‬‭have‬‭specific‬‭federal‬‭regulations‬

T
‭for‬ ‭the‬ ‭crypto-asset‬ ‭market‬ ‭but‬ ‭has‬ ‭a‬ ‭few‬ ‭uncoordinated‬ ‭standards‬ ‭issued‬ ‭by‬
‭different‬ ‭regulatory‬ ‭bodies‬ ‭at‬ ‭the‬ ‭state‬ ‭and‬ ‭federal‬ ‭levels‬ ‭since‬ ‭2013.‬ ‭The‬ ‭Financial‬
‭Crimes‬ ‭Enforcement‬ ‭Network‬ ‭(FinCEN)‬ ‭began‬ ‭this‬ ‭approach‬ ‭by‬ ‭incorporating‬ ‭virtual‬
‭currencies‬ ‭under‬ ‭the‬ ‭Bank‬ ‭Secrecy‬ ‭Act‬ ‭in‬ ‭2013.‬‭37‬ ‭In‬‭2014,‬‭the‬‭Internal‬‭Revenue‬‭Service‬
‭(IRS)‬ ‭classified‬‭crypto-assets‬‭as‬‭personal‬‭property‬‭for‬‭tax‬‭purposes.‬‭38‬ ‭This‬‭means‬‭that‬
‭receiving‬ ‭crypto-assets‬ ‭as‬ ‭payment,‬ ‭and‬ ‭their‬ ‭sale‬ ‭or‬ ‭exchange,‬ ‭can‬ ‭have‬ ‭tax‬
‭implications.‬‭On‬‭the‬‭other‬‭hand,‬‭the‬‭U.S.‬‭Commodity‬‭Futures‬‭Trading‬‭Commission‬‭(CFTC)‬
‭in‬ ‭2015‬ ‭defined‬ ‭virtual‬ ‭currencies‬ ‭as‬‭commodities‬‭(goods),‬‭subject‬‭to‬‭regulation‬‭under‬
‭the‬ ‭Commodity‬ ‭Exchange‬‭Act‬‭.‬‭39‬ ‭In‬‭2017,‬‭the‬‭Securities‬‭and‬‭Exchange‬‭Commission‬‭(SEC)‬
‭has‬ ‭provided‬ ‭guidance‬ ‭on‬ ‭virtual‬ ‭currencies,‬ ‭highlighting‬ ‭features‬ ‭such‬ ‭as‬
‭intermediary-free‬ ‭transfers‬ ‭and‬ ‭lower‬ ‭transaction‬ ‭costs.‬‭40‬ ‭The‬ ‭Infrastructure‬
‭Investment‬ ‭&‬ ‭Jobs‬ ‭Act‬ ‭of‬ ‭2021‬ ‭imposed‬ ‭additional‬ ‭data‬ ‭reporting‬ ‭requirements‬ ‭on‬
‭brokers,‬ ‭who‬ ‭must‬ ‭now‬ ‭report‬ ‭transactions‬ ‭of‬ ‭crypto-assets‬ ‭conducted‬ ‭on‬ ‭their‬
‭platforms.‬‭41‬
‭Recently,‬ ‭the‬ ‭U.S.‬ ‭Congress‬ ‭has‬ ‭been‬ ‭discussing‬ ‭proposals‬ ‭to‬ ‭regulate‬
‭ perations‬ ‭with‬ ‭crypto-assets‬ ‭and‬ ‭use‬ ‭blockchain‬ ‭technology‬ ‭in‬ ‭public‬
o
‭administration.‬‭42‬‭In‬‭2022,‬‭the‬‭U.S.‬‭Office‬‭of‬‭Government‬‭Ethics‬‭published‬‭a‬‭notice‬‭about‬
‭the‬‭non-applicability‬‭of‬‭the‬‭de‬‭minimis‬‭43‬ ‭exemption‬‭for‬‭crypto-assets‬‭and‬‭stablecoins‬‭.‬‭44‬
‭The‬ ‭federal‬ ‭stance‬ ‭is‬ ‭increasingly‬ ‭supportive‬ ‭of‬ ‭the‬ ‭crypto‬ ‭sector,‬ ‭directing‬ ‭federal‬
‭bodies‬ ‭to‬ ‭devise‬ ‭strategies‬ ‭that‬ ‭safeguard‬ ‭investors,‬ ‭deter‬‭criminal‬‭use,‬‭and‬‭promote‬
‭equitable and secure financial services.‬
‭37‬
‭UNITED‬ ‭STATES‬ ‭OF‬ ‭AMERICA.‬ ‭Cryptocurrency:‬ ‭Selected‬ ‭Policy‬ ‭Issues.‬ ‭U.S.‬‭Congressional‬‭Research‬
‭Service‬‭, 2023, p. 19. Available at: <‬‭https://crsreports.congress.gov‬‭>.‬‭Accessed on: Jan 10, 2024.‬
‭38‬
‭Ibid,‬‭p. 28.‬
‭39‬
‭Ibid‬‭, p. 23.‬
‭40‬
‭Ibid‬‭, pp. 20-21.‬
‭41‬
‭Ibid,‬‭p. 28.‬
‭42‬
‭Ibidem.‬
‭43‬
‭Regulatory policy that exempts low-value imports from duties and taxes.‬
‭44‬
‭UNITED‬ ‭STATES‬ ‭OF‬ ‭AMERICA.‬ ‭Application‬ ‭of‬ ‭the‬ ‭Securities‬ ‭and‬ ‭Mutual‬ ‭Fund‬ ‭Exemptions‬ ‭to‬
‭Cryptocurrency,‬‭Stablecoins,‬‭and‬‭Related‬‭Investments.‬‭U.S.‬‭Office‬‭of‬‭Government‬‭Ethics‬‭,‬‭2022.‬‭Available‬‭at:‬
‭<‭h‬ ttps://www.oge.gov/web/oge.nsf/News+Releases/E116F1FD24F94BB3852588770058A0FA/$FILE/LA-22-0‬
‭4.pdf‬‭>. Accessed on: Jan 12, 2024.‬
‭12‬
‭ he‬‭regulatory‬‭landscape‬‭for‬‭crypto-assets‬‭in‬‭Latin‬‭America‬‭and‬‭the‬‭Caribbean‬
T
‭exhibits‬ ‭significant‬ ‭variation‬‭,‬ ‭mirroring‬ ‭the‬ ‭economic‬ ‭diversity‬ ‭and‬ ‭varying‬
‭governmental‬‭stances‬‭on‬‭digital‬‭assets‬‭across‬‭the‬‭region.‬‭This‬‭diversity‬‭is‬‭primarily‬‭due‬
‭to the‬‭absence of cohesive international guidelines‬‭for crypto-assets.‬‭45‬
‭El‬ ‭Salvador‬ ‭stands‬ ‭out‬ ‭for‬ ‭its‬ ‭progressive‬ ‭stance‬ ‭on‬ ‭crypto-assets,‬ ‭having‬
‭become‬ ‭the‬ ‭first‬ ‭country‬ ‭in‬ ‭the‬ ‭world‬ ‭to‬ ‭adopt‬ ‭Bitcoin‬ ‭as‬ ‭an‬ ‭official‬ ‭currency‬‭.‬ ‭This‬
‭pioneering‬‭move‬‭was‬‭solidified‬‭with‬‭the‬‭adoption‬‭of‬‭the‬‭Bitcoin‬‭Law‬‭on‬‭June‬‭8,‬‭2021.‬‭46‬
‭Under‬‭this‬‭law,‬‭Bitcoin‬‭is‬‭used‬‭alongside‬‭the‬‭U.S.‬‭dollar,‬‭which‬‭serves‬‭as‬‭the‬‭reference‬
‭currency‬‭for‬‭accounting‬‭purposes.‬‭The‬‭law‬‭also‬‭mandates‬‭the‬‭acceptance‬‭of‬‭Bitcoin‬‭by‬
‭economic‬ ‭agents‬ ‭for‬ ‭goods‬ ‭and‬ ‭services‬ ‭and‬ ‭its‬ ‭use‬ ‭for‬ ‭tax‬ ‭payments.‬ ‭Similarly,‬
‭stablecoins‬ ‭like‬ ‭Reserve,‬ ‭Petro,‬ ‭and‬ ‭AirUSD‬ ‭have‬ ‭played‬‭a‬‭significant‬‭role‬‭in‬‭countries‬
‭like‬‭Venezuela‬‭and‬‭Argentina‬‭,‬‭primarily‬‭as‬‭a‬‭response‬‭to‬‭economic‬‭challenges‬‭such‬‭as‬
‭high inflation and capital controls.‬‭47‬
I‭ n‬ ‭2023,‬ ‭Chile‬ ‭passed‬ ‭the‬ ‭Fintech‬ ‭Law‬‭,‬ ‭which‬ ‭introduces‬ ‭the‬ ‭concept‬ ‭of‬
‭crypto-assets‬‭among‬‭its‬‭provisions.‬‭The‬‭law‬‭also‬‭established‬‭the‬‭Comisión‬‭del‬‭Mercado‬
‭Financiero‬ ‭(CMF)‬ ‭as‬ ‭the‬ ‭regulatory‬ ‭body‬ ‭responsible‬ ‭for‬ ‭overseeing‬ ‭the‬ ‭listed‬
‭activities.‬‭48‬ ‭This‬ ‭law‬ ‭provided‬ ‭a‬ ‭12-month‬ ‭timeline‬ ‭for‬ ‭the‬ ‭CMF‬ ‭to‬ ‭formulate‬
‭sector-specific‬ ‭regulations‬ ‭and‬ ‭licensing‬ ‭procedures.‬ ‭Despite‬ ‭initial‬ ‭delays,‬ ‭the‬ ‭CMF‬
‭finalized‬ ‭these‬ ‭regulations‬ ‭by‬ ‭January‬ ‭2024,‬ ‭subsequently‬ ‭extending‬ ‭the‬ ‭licensing‬
‭period to February 2025.‬‭49‬
‭ ince‬ ‭March‬ ‭2018,‬ ‭the‬‭Mexican's‬‭Fintech‬‭Law,‬‭the‬‭Ley‬‭Fintech‬‭,‬‭has‬‭been‬‭pivotal‬

S
‭in‬‭overseeing‬‭financial‬‭technology‬‭firms,‬‭focusing‬‭on‬‭enhancing‬‭corporate‬‭governance‬
‭and‬ ‭curbing‬ ‭fraudulent‬ ‭activities.‬ ‭It‬ ‭mandates‬ ‭regulations‬ ‭for‬ ‭transactions‬ ‭involving‬
‭virtual‬ ‭assets,‬ ‭requiring‬ ‭registration‬ ‭and‬ ‭prior‬ ‭authorization‬ ‭for‬ ‭financial‬ ‭entities‬‭,‬
‭while‬ ‭the‬ ‭Anti-Money‬ ‭Laundering‬ ‭Law‬ ‭govern‬‭non-financial‬‭entities.‬‭50‬ ‭Concerns‬‭about‬
‭volatility‬ ‭and‬ ‭the‬ ‭potential‬ ‭for‬ ‭money‬ ‭laundering‬ ‭and‬ ‭terrorism‬ ‭financing‬ ‭have‬ ‭led‬‭the‬
‭Central‬ ‭Bank‬ ‭of‬ ‭Mexico‬ ‭to‬ ‭restrict‬ ‭financial‬ ‭institutions‬ ‭from‬ ‭engaging‬ ‭directly‬ ‭with‬
‭virtual‬ ‭assets.‬‭51‬ ‭Non-financial‬ ‭entities‬ ‭can‬ ‭transact‬ ‭as‬ ‭long‬ ‭as‬ ‭they‬ ‭comply‬ ‭with‬
‭45‬
‭APPENDINO,‬ ‭Maximiliano‬ ‭et‬ ‭al.‬ ‭Crypto‬ ‭Assets‬ ‭and‬ ‭CBDCs‬ ‭in‬ ‭Latin‬ ‭America‬ ‭and‬ ‭the‬ ‭Caribbean:‬
‭ pportunities‬ ‭and‬ ‭Risks.‬ ‭International‬ ‭Monetary‬ ‭Fund‬ ‭Working‬ ‭Papers‬ ‭23/37‬‭,‬ ‭2023,‬ ‭p.‬ ‭10.‬ ‭Available‬ ‭at:‬
O
‭<‭h‬ ttps://www.elibrary.imf.org/view/journals/001/2023/037/article-A001-en.xml‬‭>.‬‭Accessed on: Jan 10, 2024.‬
‭46‬
‭Ibid.‬‭, p. 33.‬
‭47‬
‭Ibid.‬‭, pp. 13-14.‬
‭48‬
‭COMISIÓN‬ ‭PARA‬ ‭EL‬ ‭MERCADO‬ ‭FINANCIERO.‬ ‭Fintec:‬ ‭tecnología‬ ‭financiera.‬ ‭CMF‬ ‭Website,‬ ‭2024.‬
‭Available‬ ‭at:‬ ‭<‬‭https://www.cmfchile.cl/portal/principal/613/w3-propertyvalue-43589.html#especial_noticias‬‭>.‬
‭Accessed on: April 22, 2024.‬
‭49‬
‭IONIX.‬‭Nueva‬‭Ley‬‭Fintech‬‭en‬‭Chile:‬‭avances‬‭regulatorios‬‭para‬‭la‬‭industria.‬‭Ionix‬‭Website‬‭,‬‭2024.‬‭Available‬
‭at:‬ ‭<‭h‬ ttps://ionixlatam.com/nueva-ley-fintech-en-chile-avances-regulatorios-para-la-industria/‬‭>.‬ ‭Accessed‬ ‭on:‬
‭April 22, 2024.‬
‭50‬
‭GONZALEZ‬‭CALVILLO.‬‭A‬‭general‬‭introduction‬‭to‬‭the‬‭regulation‬‭of‬‭virtual‬‭currencies‬‭in‬‭Mexico.‬‭Lexology‬‭,‬
‭2023.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.lexology.com/library/detail.aspx?g=d6fd055c-e083-4a2b-a611-93d729d2c6a1a‬‭>.‬ ‭Accessed‬ ‭on:‬
‭April 22, 2024.‬
‭51‬
‭VALDERRAMA,‬ ‭Carlos;‬ ‭BETANCOURT,‬ ‭Arturo.‬ ‭Blockchain‬ ‭&‬ ‭Cryptocurrency‬ ‭Laws‬ ‭and‬ ‭Regulations‬
‭2024.‬ ‭Global‬ ‭Legal‬ ‭Insights‬‭,‬ ‭2024.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/mexico/‬‭>.‬ ‭Accessed‬ ‭on:‬
‭April 22, 2024.‬
‭13‬
‭ nti-money‬ ‭laundering‬ ‭regulations.‬ ‭The‬ ‭legislation‬ ‭does‬ ‭not‬ ‭address‬ ‭other‬ ‭types‬ ‭of‬
a
‭crypto-assets, leaving their interpretation subject to traditional regulations.‬
I‭ n‬ ‭an‬ ‭effort‬ ‭to‬ ‭regulate‬ ‭the‬ ‭burgeoning‬ ‭field‬ ‭of‬ ‭digital‬ ‭assets,‬ ‭The‬ ‭Bahamas‬
‭introduced‬ ‭the‬ ‭Digital‬ ‭Asset‬‭and‬‭Registered‬‭Exchanges‬‭Act‬‭,‬‭known‬‭as‬‭DARE.‬‭The‬‭DARE‬
‭regulates‬ ‭digital‬ ‭assets‬ ‭and‬ ‭governs‬ ‭the‬ ‭operations‬ ‭of‬ ‭businesses‬ ‭in‬ ‭this‬ ‭market,‬
‭ensuring‬‭that‬‭they‬‭are‬‭registered‬‭with‬‭the‬‭country's‬‭Securities‬‭Commission,‬‭regardless‬
‭of‬ ‭their‬ ‭location.‬ ‭Plans‬ ‭are‬ ‭underway‬ ‭to‬ ‭refine‬ ‭DARE‬ ‭further,‬ ‭aiming‬ ‭to‬ ‭put‬ ‭in‬ ‭place‬
‭regulatory‬ ‭frameworks‬ ‭for‬ ‭derivatives‬ ‭of‬ ‭crypto-assets‬ ‭and‬ ‭to‬ ‭improve‬ ‭the‬
‭transparency requirements for‬‭stablecoins‬‭.‬
I‭ n‬ ‭2020,‬ ‭The‬ ‭Bahamas‬ ‭became‬ ‭one‬ ‭of‬‭the‬‭first‬‭in‬‭the‬‭world‬‭to‬‭pioneer‬‭a‬‭CBDC‬

‭with‬ ‭the‬ ‭introduction‬ ‭of‬ ‭the‬ ‭Sand‬ ‭Dollar‬‭.‬‭52‬ ‭The‬ ‭move‬ ‭was‬ ‭strategic,‬ ‭addressing‬ ‭the‬
‭financial‬ ‭inclusion‬ ‭of‬ ‭18%‬ ‭of‬ ‭its‬ ‭population‬ ‭that‬ ‭had‬ ‭no‬‭bank‬‭account‬‭and‬‭overcoming‬
‭the‬ ‭logistical‬ ‭hurdles‬ ‭in‬ ‭cash‬‭distribution‬‭due‬‭to‬‭the‬‭region's‬‭frequent‬‭severe‬‭weather.‬
‭Despite‬ ‭a‬ ‭promising‬ ‭start,‬‭the‬‭adoption‬‭of‬‭the‬‭Sand‬‭Dollar‬‭has‬‭been‬‭modest,‬‭with‬‭only‬
‭30,000‬‭wallets‬‭active‬‭by‬‭mid-2022‬‭in‬‭The‬‭Bahamas,‬‭equating‬‭to‬‭an‬‭8%‬‭penetration‬‭rate‬
‭among residents.‬‭53‬
‭Following‬‭the‬‭trend,‬‭in‬‭2022,‬‭Jamaica‬‭launched‬‭its‬‭own‬‭CBDC,‬‭called‬‭Jam-Dex‬‭,‬
t‭ hrough‬ ‭a‬ ‭digital‬ ‭wallet‬ ‭known‬ ‭as‬ ‭the‬ ‭Lynk‬ ‭App.‬ ‭The‬ ‭registration‬ ‭process‬ ‭for‬ ‭a‬ ‭wallet‬
‭requires‬‭a‬‭government-issued‬‭photo‬‭identification‬‭and‬‭taxpayer‬‭registration‬‭details.‬‭To‬
‭encourage‬ ‭adoption,‬ ‭the‬ ‭Central‬ ‭Bank‬‭of‬‭Jamaica‬‭provided‬‭a‬‭$16‬‭incentive‬‭to‬‭the‬‭first‬
‭100,000‬ ‭users‬ ‭to‬ ‭activate‬ ‭their‬ ‭wallets‬ ‭and‬ ‭launched‬ ‭an‬ ‭island-wide‬ ‭educational‬
‭initiative‬ ‭dubbed‬ ‭"No‬ ‭Cash,‬ ‭No‬ ‭Problem."‬‭54‬ ‭By‬ ‭August‬ ‭2022,‬ ‭the‬ ‭Lynk‬ ‭platform‬ ‭had‬
‭attracted over 120,000 users and more than 2,300 participating merchants.‬‭55‬
‭Asia-Pacific‬
‭Japan‬ ‭stands‬ ‭at‬ ‭the‬ ‭forefront‬ ‭of‬ ‭cryptocurrency‬ ‭regulation‬ ‭within‬ ‭Asia‬‭,‬
‭ xemplified‬ ‭by‬ ‭its‬ ‭initiative-taking‬ ‭and‬ ‭forward-thinking‬ ‭measures.‬ ‭The‬ ‭Payment‬
e
‭Services‬ ‭Act‬ ‭of‬ ‭2016‬ ‭was‬ ‭a‬ ‭significant‬ ‭step‬ ‭in‬ ‭legal‬ ‭adaptation‬ ‭to‬ ‭crypto-assets,‬
‭requiring‬ ‭crypto-asset‬ ‭brokerages‬ ‭to‬ ‭register,‬ ‭while‬ ‭the‬ ‭Financial‬ ‭Services‬ ‭Agency‬ ‭of‬
‭52‬
‭WRIGHT,‬ ‭Turner.‬ ‭The‬ ‭Bahamas‬ ‭launches‬ ‭the‬‭world's‬‭first‬‭CBDC,‬‭the‬‭'Sand‬‭Dollar'.‬‭Cointelegraph‬‭,‬‭2020.‬
‭ vailable‬ ‭at:‬ ‭<‬‭https://br.cointelegraph.com/news/the-bahamas-launches-world-s-first-cbdc-the-sand-dollar‬‭>.‬
A
‭Accessed on: January 11, 2024.‬
‭53‬
‭WORLD‬ ‭ECONOMIC‬ ‭FORUM.‬ ‭Central‬ ‭Bank‬ ‭Digital‬ ‭Currency‬ ‭Global‬ ‭Interoperability‬ ‭Principles‬‭.‬
‭Geneva:‬ ‭World‬ ‭Economic‬ ‭Forum,‬ ‭2023.‬ ‭p.‬ ‭9.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www3.weforum.org/docs/WEF_Central_Bank_Digital_Currency_Global_Interoperability_Principles_2‬
‭023.pdf‬‭>. Accessed on: January 11, 2024.‬
‭54‬
‭Ibidem‬‭.‬
‭55‬
‭Ibidem‬‭.‬
‭14‬
‭ apan‬‭(JFSA)‬‭has‬‭promoted‬‭self-regulation‬‭in‬‭the‬‭sector‬‭since‬‭2018.‬‭56‬ ‭Recent‬‭legislative‬
J
‭advancements‬ ‭in‬ ‭2020‬ ‭and‬ ‭a‬ ‭pivotal‬ ‭2022‬ ‭law‬ ‭have‬ ‭further‬ ‭defined‬ ‭the‬ ‭regulatory‬
‭framework,‬ ‭particularly‬ ‭for‬ ‭stablecoins‬‭,‬ ‭imposing‬ ‭stringent‬ ‭issuance‬ ‭guidelines.‬‭57‬
‭Despite‬ ‭its‬ ‭structured‬ ‭and‬ ‭investor-centric‬ ‭regulatory‬ ‭environment,‬ ‭Japan‬ ‭has‬
‭encountered criticism for imposing high taxes on cryptocurrency profits.‬
‭ hile‬ ‭Australia‬ ‭lacks‬ ‭specific‬ ‭regulations‬‭,‬ ‭the‬ ‭Australian‬ ‭Securities‬ ‭and‬

W
‭Investments‬ ‭Commission‬ ‭(ASIC)‬ ‭has‬ ‭provided‬ ‭guidance‬ ‭on‬ ‭blockchain‬ ‭and‬ ‭Distributed‬
‭Ledger Technology‬‭(DLT)‬‭58‬ ‭to financial service firms‬‭or market infrastructure entities.‬‭59‬
‭ he‬ ‭Australian‬ ‭government,‬ ‭in‬ ‭December‬ ‭2021,‬ ‭initiated‬ ‭plans‬ ‭to‬ ‭create‬ ‭a‬
T
‭regulatory‬ ‭framework‬ ‭for‬ ‭digital‬ ‭assets.‬ ‭This‬ ‭framework‬ ‭was‬ ‭to‬ ‭cover‬ ‭licensing,‬
‭custody,‬ ‭and‬ ‭the‬ ‭exploration‬ ‭of‬ ‭a‬ ‭possible‬ ‭CBDC‬ ‭to‬ ‭foster‬ ‭a‬ ‭predictable‬ ‭and‬
‭technologically‬ ‭unbiased‬ ‭setting.‬ ‭However,‬ ‭the‬ ‭election‬ ‭of‬ ‭a‬ ‭new‬ ‭government‬ ‭in‬ ‭May‬
‭2022‬‭altered‬‭this‬‭approach,‬‭shifting‬‭focus‬‭to‬‭identifying‬‭regulatory‬‭gaps‬‭through‬‭token‬
‭mapping, developing a licensing framework, and enhancing consumer protection.‬‭60‬
‭Currently,‬ ‭digital‬ ‭assets‬ ‭in‬ ‭Australia‬ ‭are‬ ‭governed‬ ‭by‬ ‭existing‬ ‭financial‬ ‭and‬
‭ onsumer‬ ‭laws,‬ ‭with‬ ‭ASIC‬ ‭working‬ ‭to‬ ‭develop‬ ‭a‬ ‭specific‬ ‭regulatory‬ ‭framework.‬
c
‭Additionally,‬ ‭the‬ ‭digital‬ ‭assets‬ ‭(market‬ ‭regulation)‬ ‭bill‬ ‭introduced‬ ‭in‬ ‭September‬ ‭2022‬
‭seeks‬ ‭to‬ ‭regulate‬ ‭digital‬ ‭assets,‬ ‭including‬ ‭stablecoins‬‭,‬ ‭with‬ ‭a‬ ‭focus‬ ‭on‬ ‭consumer‬
‭protection and market stability‬‭.‬‭61‬
‭ n‬ ‭the‬ ‭other‬ ‭hand,‬ ‭India‬ ‭positions‬ ‭itself‬ ‭as‬ ‭an‬ ‭innovation‬ ‭hub‬ ‭for‬ ‭the‬ ‭digital‬
O
‭asset‬‭ecosystem,‬‭Promoting‬‭Fintechs‬‭and‬‭an‬‭enabling‬‭environment‬‭for‬‭digital‬‭financial‬
‭services.‬ ‭While‬ ‭the‬ ‭government‬ ‭has‬ ‭been‬ ‭receptive‬ ‭to‬ ‭blockchain‬ ‭and‬ ‭DLT‬ ‭for‬ ‭Indian‬
‭public‬ ‭administration,‬ ‭it‬ ‭has‬ ‭been‬ ‭cautious‬ ‭towards‬ ‭virtual‬ ‭assets‬ ‭such‬ ‭as‬ ‭crypto‬
‭assets‬‭.‬ ‭For‬ ‭example,‬ ‭the‬ ‭Reserve‬ ‭Bank‬ ‭of‬ ‭India‬ ‭(RBI)‬ ‭imposed‬ ‭a‬ ‭ban‬ ‭in‬ ‭2018‬ ‭on‬
‭cryptocurrency‬ ‭transactions‬ ‭through‬ ‭its‬ ‭regulated‬ ‭bodies.‬ ‭However,‬ ‭this‬ ‭ban‬ ‭was‬
‭reversed by the Supreme Court of India in 2020, ruling it unconstitutional.‬‭62‬
‭56‬
‭JAPAN.‬‭Regulatory‬‭Framework‬‭for‬‭Crypto-assets‬‭and‬‭Stablecoins.‬‭Financial‬‭Services‬‭Agency,‬‭the‬‭Japanese‬
‭ overnment‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬ ‭<‬‭https://www.fsa.go.jp/inter/etc/20220914-2/02.pdf‬‭>.‬ ‭Accessed‬ ‭on:‬‭January‬
G
‭11, 2024.‬
‭57‬
‭Ibidem.‬
‭58‬
‭DLT‬ ‭operates‬ ‭as‬ ‭a‬ ‭decentralized‬ ‭network,‬ ‭harnessing‬ ‭multiple‬ ‭nodes‬ ‭to‬ ‭enhance‬ ‭data‬ ‭transparency‬ ‭and‬
‭security.‬‭Blockchain‬‭is‬‭a‬‭type‬‭of‬‭DLT.‬‭HARI,‬‭Olivier;‬‭DUPASQUIER,‬‭Ulysse.‬‭Blockchain‬‭and‬‭distributed‬‭ledger‬
‭technology‬ ‭(DLT):‬ ‭academic‬ ‭overview‬ ‭of‬ ‭the‬‭technical‬‭and‬‭legal‬‭framework‬‭and‬‭challenges‬‭for‬‭lawyers.‬‭Int'l‬
‭Bus. LJ‬‭, p. 423, 2018.‬
‭59‬
‭PRICEWATERHOUSECOOPERS‬ ‭LLP.‬ ‭PwC‬ ‭Global‬ ‭Crypto‬ ‭Regulation‬ ‭Report‬ ‭2023.‬ ‭PwC‬ ‭Publications‬‭,‬
‭2022,‬ ‭p.‬ ‭25.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.pwc.com/gx/en/new-ventures/cryptocurrency-assets/pwc-global-crypto-regulation-report-2023.pd‬
‭f‭> ‬ . Accessed on: Jan 12, 2024.‬
‭60‬
‭Ibidem.‬
‭61‬
‭Ibidem.‬
‭62‬
‭Ibid.‬‭, p. 46.‬
‭15‬
‭ egarding‬ ‭regulation,‬ ‭India‬ ‭lacks‬ ‭a‬ ‭comprehensive‬ ‭framework‬ ‭for‬
R
‭crypto-assets,‬‭63‬ ‭with‬ ‭current‬ ‭discussions‬ ‭on‬ ‭the‬ ‭Cryptocurrency‬ ‭and‬ ‭Regulation‬ ‭of‬
‭Official‬ ‭Digital‬ ‭Currency‬ ‭Bill‬‭,‬ ‭which‬ ‭aims‬ ‭to‬ ‭establish‬ ‭a‬ ‭CBDC‬ ‭structure‬ ‭and‬ ‭restrict‬
‭private‬ ‭cryptocurrencies.‬‭64‬ ‭Thus,‬ ‭since‬ ‭the‬ ‭end‬ ‭of‬ ‭2022,‬ ‭India‬ ‭has‬ ‭been‬ ‭exploring‬
‭initiatives with pilot programs for wholesale and retail CBDCs.‬‭65‬
‭ ingapore‬‭has‬‭been‬‭striving‬‭to‬‭establish‬‭itself‬‭as‬‭a‬‭responsible‬‭and‬‭innovative‬
S
‭hub‬ ‭for‬ ‭the‬ ‭digital‬ ‭asset‬ ‭ecosystem‬‭.‬‭66‬ ‭The‬ ‭Monetary‬ ‭Authority‬ ‭of‬ ‭Singapore‬ ‭(MAS)‬ ‭is‬
‭committed‬ ‭to‬ ‭attracting‬ ‭high-quality‬ ‭businesses‬ ‭with‬ ‭robust‬ ‭risk‬ ‭management‬
‭practices‬ ‭to‬ ‭ensure‬ ‭consumer‬ ‭protection‬ ‭and‬ ‭educate‬ ‭the‬ ‭public‬ ‭on‬ ‭the‬ ‭risks‬
‭associated‬ ‭with‬ ‭cryptocurrencies.‬‭67‬ ‭The‬ ‭country‬ ‭strongly‬ ‭discourages‬ ‭speculation‬ ‭in‬
‭crypto‬‭assets‬‭and‬‭has‬‭proposed‬‭regulatory‬‭measures‬‭for‬‭Digital‬‭Payment‬‭Token‬‭Service‬
‭Providers‬ ‭aimed‬ ‭at‬ ‭areas‬ ‭such‬ ‭as‬ ‭consumer‬ ‭awareness,‬ ‭business‬ ‭conduct,‬ ‭and‬
‭technology.‬‭68‬ ‭MAS'‬ ‭regulatory‬ ‭approach‬ ‭focuses‬ ‭on‬ ‭assessing‬ ‭the‬ ‭capabilities‬ ‭and‬
‭characteristics‬ ‭of‬ ‭each‬ ‭digital‬ ‭asset‬ ‭to‬ ‭determine‬ ‭applicable‬ ‭requirements,‬ ‭tailoring‬
‭requirements that foster innovation while addressing particular risks.‬‭69‬
‭In‬ ‭addition,‬ ‭Singapore‬ ‭regulates‬ ‭digital‬ ‭assets‬ ‭that‬ ‭qualify‬ ‭as‬ ‭capital‬ ‭market‬
‭ roducts‬ ‭under‬ ‭the‬ ‭Securities‬ ‭and‬ ‭Futures‬ ‭Act‬ ‭(SFA)‬ ‭and‬ ‭imposes‬ ‭prospectus‬
p
‭requirements‬‭for‬‭digital‬‭asset‬‭offerings‬‭to‬‭the‬‭public.‬‭70‬ ‭Stablecoins‬‭are‬‭treated‬‭as‬‭Digital‬
‭Payment‬ ‭Tokens‬ ‭under‬ ‭the‬ ‭Payment‬ ‭Services‬ ‭Act‬‭(PSA).‬‭71‬ ‭The‬‭country‬‭is‬‭also‬‭exploring‬
‭applications‬‭in‬‭asset‬‭tokenization‬‭and‬‭DeFi‬‭72‬ ‭through‬‭Guardian‬‭Project,‬‭with‬‭the‬‭aim‬‭of‬
‭increasing efficiency and liquidity in wholesale finance markets.‬‭73‬
‭In‬‭Thailand‬‭,‬‭the‬‭CBDC‬‭pilot‬‭project,‬‭known‬‭as‬‭"‭D
‬ igital‬‭Baht‬‭,"‬‭started‬‭in‬‭2023‬‭with‬
‭a‬ ‭narrow‬‭group‬‭of‬‭users,‬‭reaching‬‭a‬‭major‬‭milestone‬‭by‬‭minting‬‭and‬‭distributing‬‭CBDC‬
‭63‬
‭RANA,‬ ‭Divyansh.‬ ‭Can‬ ‭India‬ ‭also‬ ‭implement‬ ‭a‬ ‭regulatory‬ ‭framework‬ ‭for‬ ‭cryptocurrency‬ ‭similar‬ ‭to‬ ‭the‬
r‭ ecently‬ ‭approved‬ ‭legislation‬ ‭by‬ ‭the‬ ‭EU‬ ‭called‬ ‭MiCA?‬ ‭The‬ ‭Leaflet‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://theleaflet.in/can-india-also-implement-a-regulatory-framework-for-cryptocurrency-similar-to-the-recent‬
‭ly-approved-legislation-by-the-eu-called-mica/‬‭>. Accessed‬‭on: March 10, 2024.‬
‭64‬
‭2022,‬ ‭p.‬ ‭46.‬ ‭Available‬ ‭at:‬
‭f‭> ‬ . Accessed on: Jan 12, 2024.‬
‭65‬
‭Ibidem.‬
‭66‬
‭PING,‬‭Foo‬‭Boon.‬‭How‬‭Singapore‬‭is‬‭shaping‬‭the‬‭future‬‭of‬‭digital‬‭money.‬‭The‬‭Asian‬‭Banker,‬‭2023.‬‭Available‬
‭at:‬ ‭<‭h‬ ttps://www.theasianbanker.com/updates-and-articles/singapore-is-shaping-the-future-of-digital-money‬‭>.‬
‭Accessed on: February 23, 2024.‬
‭67‬
‭MONETARY‬‭AUTHORITY‬‭OF‬‭SINGAPORE.‬‭MAS‬‭Strengthens‬‭Regulatory‬‭Measures‬‭for‬‭Digital‬‭Payment‬
‭Token‬ ‭Services.‬ ‭MAS‬ ‭Media‬ ‭Releases‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.mas.gov.sg/news/media-releases/2023/mas-strengthens-regulatory-measures-for-digital-payment-t‬
‭oken-services‬‭>. Accessed on: Jan 12, 2024.‬
‭68‬
‭Ibidem.‬
‭69‬
‭2022,‬ ‭p.‬ ‭57.‬ ‭Available‬ ‭at:‬
‭f‭> ‬ . Accessed on: Jan 12, 2024.‬
‭70‬
‭Ibidem.‬
‭71‬
‭Ibidem.‬
‭72‬
‭Decentralized‬ ‭finance‬ ‭(DeFi)‬‭represents‬‭a‬‭novel‬‭financial‬‭framework‬‭consisting‬‭of‬‭decentralized‬‭blockchain‬
‭protocols‬ ‭and‬ ‭the‬ ‭underlying‬ ‭smart‬ ‭contract‬ ‭technology.‬ ‭ZETZSCHE,‬ ‭Dirk‬ ‭A.;‬ ‭ARNER,‬ ‭Douglas‬ ‭W.;‬
‭BUCKLEY, Ross P. Decentralized finance (defi).‬‭Journal‬‭of Financial Regulation‬‭, v. 6, pp. 172-203, 2020.‬
‭73‬
‭Ibidem.‬
‭16‬
t‭ o‬ ‭three‬ ‭financial‬ ‭service‬ ‭providers‬ ‭and‬ ‭expanding‬ ‭to‬ ‭up‬ ‭to‬ ‭10,000‬ ‭users.‬‭74‬ ‭The‬ ‭CBDC‬
‭technology‬ ‭is‬ ‭provided‬ ‭by‬ ‭German‬ ‭technology‬ ‭partner‬ ‭Giesecke+Devrient.‬‭75‬ ‭Thailand’s‬
‭CBDC‬ ‭program‬ ‭is‬ ‭designed‬ ‭to‬ ‭seamlessly‬ ‭integrate‬ ‭into‬ ‭existing‬ ‭payment‬
‭infrastructures,‬‭targeting‬‭micro-transactions‬‭in‬‭retail‬‭environments‬‭such‬‭as‬‭cafeterias‬
‭and‬ ‭canteens‬ ‭utilized‬ ‭by‬ ‭bank‬ ‭employees.‬ ‭Recognizing‬ ‭the‬ ‭high‬ ‭adoption‬ ‭of‬ ‭digital‬
‭payments‬ ‭in‬ ‭Thailand,‬ ‭the‬ ‭Bank‬ ‭of‬ ‭Thailand‬ ‭sees‬ ‭CBDC‬ ‭as‬ ‭a‬ ‭transformative‬ ‭solution,‬
‭aiming to establish an inclusive and accessible financial infrastructure.‬‭76‬
‭China‬ ‭adopts‬ ‭a‬ ‭conservative‬ ‭approach‬ ‭toward‬ ‭virtual‬ ‭currencies,‬ ‭enforcing‬ ‭a‬
‭ an‬ ‭on‬ ‭their‬ ‭use‬ ‭as‬ ‭legal‬ ‭currency‬ ‭but‬ ‭supporting‬ ‭blockchain‬ ‭technology‬
b
‭advancements.‬ ‭The‬ ‭digital‬ ‭yuan‬ ‭(e-CNY)‬ ‭stands‬ ‭as‬ ‭the‬ ‭sole‬ ‭exception,‬ ‭legally‬
‭recognized and issued by the People’s Bank of China.‬
‭The‬ ‭Chinese‬ ‭government‬ ‭has‬ ‭issued‬ ‭several‬ ‭regulations‬ ‭to‬ ‭govern‬ ‭virtual‬
‭ urrency‬ ‭activities,‬ ‭including‬ ‭trading‬ ‭bans,‬ ‭initial‬ ‭coin‬ ‭offerings‬ ‭(ICOs),‬‭77‬ ‭account‬ ‭and‬
c
‭money‬‭transmission‬‭services.‬‭This‬‭strict‬‭regulatory‬‭approach‬‭aims‬‭to‬‭maintain‬‭control‬
‭over‬ ‭the‬ ‭financial‬ ‭system‬ ‭and‬ ‭prevent‬ ‭potential‬ ‭threats‬ ‭to‬ ‭the‬ ‭stability‬ ‭of‬ ‭the‬ ‭yuan.‬
‭Despite‬ ‭ongoing‬ ‭discussions‬ ‭about‬ ‭the‬ ‭legal‬ ‭status‬ ‭of‬ ‭virtual‬ ‭currencies,‬‭they‬‭are‬‭not‬
‭considered‬ ‭securities‬ ‭by‬ ‭the‬ ‭China‬ ‭Securities‬ ‭Regulatory‬ ‭Commission‬ ‭(CSRC).‬ ‭Public‬
‭offerings of virtual currencies in China can be seen as illegal securities offerings.‬‭78‬
‭Europe‬
‭ urope‬ ‭has‬ ‭adopted‬ ‭a‬ ‭comprehensive‬ ‭approach‬ ‭to‬ ‭the‬ ‭future‬ ‭development‬ ‭of‬
E
‭digital‬‭finance‬‭and‬‭innovation‬‭within‬‭the‬‭European‬‭Union‬‭(EU)‬‭with‬‭the‬‭implementation‬
‭of‬‭the‬‭New‬‭Digital‬‭Finance‬‭Package‬‭on‬‭September‬‭24,‬‭2020‬‭.‬‭79‬ ‭This‬‭package‬‭includes‬‭a‬
‭Digital‬ ‭Finance‬ ‭Strategy‬ ‭(DFS‬ ‭2020)‬ ‭and‬ ‭a‬ ‭new‬ ‭Retail‬ ‭Payments‬ ‭Strategy‬‭,‬ ‭aimed‬ ‭at‬
‭boosting‬ ‭competitiveness‬ ‭and‬ ‭innovation‬ ‭in‬ ‭Europe,‬ ‭with‬ ‭a‬ ‭focus‬ ‭on‬ ‭setting‬ ‭global‬
‭standards.‬‭80‬ ‭Seeking‬ ‭to‬ ‭drive‬ ‭responsible‬ ‭innovation‬ ‭in‬ ‭the‬ ‭EU‬ ‭financial‬ ‭sector,‬
‭particularly‬ ‭for‬ ‭digital‬ ‭startups‬‭,‬ ‭the‬ ‭measures‬ ‭emphasize‬‭consumer‬‭choice,‬‭consumer‬
‭protection,‬ ‭and‬ ‭financial‬ ‭stability,‬ ‭while‬ ‭acknowledging‬ ‭the‬ ‭importance‬ ‭of‬ ‭mitigating‬
‭risks related to investor protection, money laundering, and cybercrime.‬
‭74‬
‭WORLD ECONOMIC FORUM.‬‭Central Bank Digital Currency Global Interoperability Principles‬‭.‬
‭ eneva: World Economic Forum, 2023. p. 18. Available at:‬
G
‭75‬
‭Ibidem.‬
‭76‬
‭Ibidem.‬
‭77‬
‭ICOs‬ ‭are‬ ‭a‬ ‭popular‬ ‭way‬ ‭to‬ ‭raise‬ ‭funds‬ ‭for‬‭products‬‭and‬‭services‬‭that‬‭are‬‭usually‬‭related‬‭to‬‭cryptocurrency.‬
‭ICOs‬ ‭are‬ ‭similar‬ ‭to‬ ‭initial‬ ‭public‬ ‭offerings‬ ‭(IPOs),‬ ‭but‬ ‭the‬ ‭coins‬ ‭issued‬ ‭in‬‭an‬‭ICO‬‭can‬‭also‬‭have‬‭utility‬‭for‬‭a‬
‭software‬ ‭product‬ ‭or‬ ‭service.‬ ‭LYANDRES,‬ ‭Evgeny;‬ ‭PALAZZO,‬ ‭Berardino;‬ ‭RABETTI,‬ ‭Daniel.‬ ‭Initial‬ ‭Coin‬
‭Offering (ICO) success and post-ICO performance. ‭M ‬ anagement‬‭Science‬‭, v. 68, n. 12, p. 8658, 2022.‬
‭78‬
‭XU,‬ ‭Ivy,‬ ‭et.‬ ‭al.‬ ‭A‬ ‭general‬ ‭introduction‬ ‭to‬ ‭the‬ ‭regulation‬ ‭of‬ ‭virtual‬ ‭currencies‬ ‭in‬ ‭China.‬ ‭Lexology‬‭,‬ ‭2023.‬
‭Available‬ ‭at:‬ ‭<‬‭https://www.lexology.com/library/detail.aspx?g=173637c5-9ac8-4425-9f59-a25f88d284c7‬‭>.‬
‭79‬
‭ZETZSCHE,‬ ‭Dirk‬ ‭A.‬ ‭et‬ ‭al.‬ ‭The‬ ‭Markets‬ ‭in‬ ‭Crypto-Assets‬ ‭regulation‬ ‭(MiCA)‬ ‭and‬ ‭the‬ ‭EU‬ ‭digital‬ ‭finance‬
‭strategy.‬‭Capital Markets Law Journal‬‭, v. 16, n. 2,‬‭pp. 203-205, 2021.‬
‭80‬
‭Ibid‬‭., p. 205.‬
‭17‬
‭ he‬ ‭DFS‬ ‭2020‬ ‭provides‬ ‭a‬ ‭comprehensive‬ ‭framework‬ ‭for‬ ‭future‬ ‭reforms‬ ‭to‬
T
‭develop‬ ‭digital‬ ‭finance‬ ‭in‬ ‭the‬ ‭EU.‬ ‭It‬ ‭sets‬ ‭four‬ ‭main‬ ‭objectives:‬ ‭(i)‬ ‭removing‬
‭fragmentation‬‭in‬‭the‬‭Digital‬‭Single‬‭Market‬‭;‬‭(ii)‬‭adapting‬‭the‬‭EU‬‭regulatory‬‭framework‬‭to‬
‭facilitate‬ ‭digital‬ ‭innovation;‬ ‭(iii)‬ ‭promoting‬ ‭data-driven‬ ‭finance‬‭;‬ ‭and‬ ‭(iv)‬ ‭addressing‬
‭challenges‬ ‭and‬ ‭risks‬ ‭associated‬ ‭with‬ ‭digital‬ ‭transformation,‬ ‭including‬ ‭enhancing‬ ‭the‬
‭digital‬ ‭operational‬‭resilience‬‭of‬‭the‬‭financial‬‭system.‬‭81‬ ‭Building‬‭upon‬‭the‬‭achievements‬
‭of‬ ‭the‬ ‭Single‬ ‭European‬ ‭Payments‬ ‭Area‬ ‭(SEPA)‬‭82‬‭,‬ ‭the‬ ‭latest‬ ‭retail‬ ‭payments‬ ‭strategy‬
‭seeks‬ ‭to‬ ‭digitalize‬ ‭consumer‬ ‭payment‬ ‭processes‬ ‭within‬ ‭the‬ ‭EU.‬ ‭This‬ ‭strategy‬
‭emphasizes‬ ‭enhancing‬ ‭the‬ ‭competitiveness‬ ‭and‬ ‭innovation‬ ‭of‬ ‭the‬ ‭payment‬ ‭market,‬
‭upgrading‬ ‭payment‬ ‭infrastructures,‬ ‭and‬ ‭refining‬ ‭the‬ ‭efficiency‬ ‭of‬ ‭international‬
‭transactions, leveraging the euro.‬‭83‬
‭ ecently,‬ ‭the‬ ‭EU‬ ‭regulation‬ ‭on‬ ‭crypto-asset‬‭markets,‬‭also‬‭known‬‭as‬‭Markets‬‭in‬

R
‭Crypto-Assets‬‭Regulation‬‭(MiCA),‬‭was‬‭adopted‬‭in‬‭June‬‭2023‬‭and‬‭will‬‭be‬‭phased‬‭in‬‭until‬
‭December‬‭2024.‬‭Under‬‭MiCA,‬‭crypto-assets‬‭are‬‭categorized‬‭as‬‭digital‬‭representations‬
‭that‬‭embody‬‭value‬‭or‬‭rights,‬‭which‬‭are‬‭electronically‬‭storable‬‭and‬‭transferable‬‭via‬‭DLT.‬
‭This‬‭regulation‬‭integrates‬‭into‬‭a‬‭comprehensive‬‭EU‬‭digital‬‭financial‬‭strategy,‬‭including‬
‭a‬‭specific‬‭regulation‬‭that‬‭initiates‬‭a‬‭pilot‬‭regime‬‭for‬‭DLT‬‭in‬‭market‬‭infrastructures.‬‭This‬
‭initiative‬‭facilitates‬‭the‬‭trading‬‭and‬‭settlement‬‭of‬‭financial‬‭instruments‬‭represented‬‭as‬
‭crypto-assets.‬‭84‬ ‭MiCA's‬‭implementation‬‭aligns‬‭with‬‭the‬‭European‬‭Commission's‬‭broader‬
‭goals‬‭to‬‭enhance‬‭the‬‭digital‬‭financial‬‭sector‬‭and‬‭reinforce‬‭the‬‭EU’s‬‭strategic‬‭autonomy‬
‭in‬‭financial‬‭services.‬‭This‬‭effort‬‭is‬‭in‬‭concert‬‭with‬‭the‬‭capital‬‭markets‬‭union‬‭action‬‭plan,‬
‭aimed at deepening financial integration across member states.‬‭85‬
I‭ n‬‭contrast‬‭to‬‭the‬‭EU's‬‭broad‬‭regulatory‬‭framework‬‭established‬‭by‬‭MiCA,‬‭the‬‭UK‬
‭has‬‭focused‬‭its‬‭regulatory‬‭efforts‬‭initially‬‭on‬‭specific‬‭types‬‭of‬‭crypto-assets‬‭,‬‭notably‬
‭stablecoins‬‭,‬‭which‬‭it‬‭classifies‬‭as‬‭"digital‬‭settlement‬‭assets."‬‭The‬‭Financial‬‭Services‬‭and‬
‭Markets‬‭Act‬‭(FSMA)‬‭legislation‬‭in‬‭the‬‭UK‬‭encompasses‬‭definitions‬‭for‬‭crypto-assets‬‭and‬
‭assigns‬‭regulatory‬‭oversight‬‭of‬‭stablecoins‬‭to‬‭the‬‭Financial‬‭Conduct‬‭Authority‬‭,‬‭the‬‭Bank‬
‭of‬ ‭England,‬ ‭the‬‭Prudential‬‭Regulation‬‭Authority‬‭,‬‭and‬‭the‬‭Payment‬‭Services‬‭Regulator‬‭.‬‭86‬
‭Additional‬‭measures‬‭support‬‭innovation‬‭in‬‭financial‬‭services‬‭using‬‭blockchain‬‭,‬‭such‬‭as‬
‭a‬‭formalized digital‬‭sandbox‬‭program .‬‭87‬
‭81‬
I‭ bidem.‬
‭82‬
‭SEPA‬‭refers‬‭to‬‭cashless‬‭euro‬‭payments‬‭processed‬‭through‬‭the‬‭Single‬‭Euro‬‭Payments‬‭Area‬‭network‬‭to‬‭facilitate‬
‭cross-border‬ ‭bank‬ ‭transfers‬ ‭within‬ ‭36‬ ‭Eurozone‬ ‭and‬ ‭non-Eurozone‬ ‭countries.‬ ‭The‬ ‭SEPA‬ ‭payment‬ ‭method‬
‭enables‬‭quick‬‭and‬‭cost-effective‬‭international‬‭transfers.‬‭EUROPEAN‬‭CENTRAL‬‭BANK.‬‭Single‬‭Euro‬‭Payments‬
‭Area‬ ‭(SEPA).‬ ‭European‬ ‭Central‬ ‭Bank‬ ‭Website‬‭,‬ ‭2024.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.ecb.europa.eu/paym/integration/retail/sepa/html/index.en.html‬‭>.‬‭Accessed on: March 13, 2024.‬
‭83‬
‭ZETZSCHE,‬ ‭Dirk‬ ‭A.‬ ‭et‬ ‭al.‬ ‭The‬ ‭Markets‬ ‭in‬ ‭Crypto-Assets‬ ‭regulation‬ ‭(MiCA)‬ ‭and‬ ‭the‬ ‭EU‬ ‭digital‬ ‭finance‬
‭strategy.‬‭Capital Markets Law Journal‬‭, v. 16, n. 2,‬‭p. 205, 2021.‬
‭84‬
‭Ibidem.‬
‭85‬
‭EUROPEAN‬‭UNION.‬‭Non-EU‬‭countries'‬‭regulations‬‭on‬‭crypto-assets‬‭and‬‭their‬‭potential‬‭implications‬‭for‬‭the‬
‭EU.‬ ‭European‬ ‭Parliamentary‬ ‭Research‬ ‭Service‬‭,‬ ‭2023,‬ ‭pp.‬ ‭2-4.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.europarl.europa.eu/RegData/etudes/BRIE/2023/753930/EPRS_BRI(2023)753930_EN.pdf‬‭>.‬
‭86‬
‭Ibid.‬‭, p. 4.‬
‭87‬
‭Ibid.,‬‭pp. 4-5.‬
‭18‬
‭ lso,‬‭it‬‭is‬‭worth‬‭mentioning‬‭that‬‭the‬‭Financial‬‭Conduct‬‭Authority‬‭(FCA)‬‭has‬‭called‬
A
‭on‬ ‭the‬ ‭government‬ ‭for‬ ‭more‬ ‭power‬ ‭to‬ ‭regulate‬ ‭crypto‬ ‭assets,‬ ‭drawing‬ ‭criticism‬ ‭from‬
‭founders‬ ‭of‬ ‭Fintechs‬ ‭in‬‭the‬‭sense‬‭that‬‭the‬‭FCA's‬‭crypto‬‭asset‬‭practices‬‭and‬‭its‬‭license‬
‭approvals‬ ‭would‬ ‭be‬ ‭slow.‬‭88‬ ‭The‬ ‭FCA,‬ ‭in‬ ‭turn,‬ ‭asserts‬ ‭that‬ ‭it‬ ‭supported‬ ‭over‬ ‭800‬
‭companies‬ ‭by‬ ‭April‬ ‭2023,‬ ‭significantly‬ ‭reducing‬ ‭its‬ ‭backlog‬ ‭in‬ ‭crypto-asset‬ ‭company‬
‭authorizations‬‭and‬‭emphasizing‬‭the‬‭"relative‬‭regulatory‬‭freedom"‬‭of‬‭the‬‭UK‬‭following‬‭its‬
‭departure from the EU.‬‭89‬
‭ s‬ ‭for‬ ‭a‬ ‭CBDC,‬ ‭the‬ ‭country‬ ‭has‬ ‭not‬ ‭yet‬ ‭opted‬ ‭to‬ ‭adopt‬ ‭one‬‭.‬ ‭However,‬
A
‭discussions‬‭in‬‭this‬‭regard‬‭are‬‭progressing.‬‭On‬‭February‬‭7,‬‭2023,‬‭the‬‭Bank‬‭of‬‭England‬‭and‬
‭HM‬‭Treasury‬‭initiated‬‭a‬‭public‬‭consultation‬‭on‬‭a‬‭retail‬‭CBDC.‬‭While‬‭no‬‭timeline‬‭has‬‭been‬
‭set, the Bank continues to explore the feasibility of launching a CBDC.‬‭90‬
‭Middle East‬
‭In‬ ‭the‬ ‭United‬ ‭Arab‬ ‭Emirates‬ ‭(UAE),‬ ‭where‬ ‭federal‬ ‭civil‬ ‭law‬ ‭prevails,‬ ‭financial‬
‭ arkets‬ ‭are‬ ‭primarily‬ ‭regulated‬ ‭by‬ ‭the‬ ‭Central‬ ‭Bank‬ ‭of‬ ‭the‬ ‭UAE‬ ‭(CBUAE)‬ ‭and‬ ‭the‬
m
‭Securities‬‭and‬‭Commodities‬‭Authority‬‭(SCA).‬‭However,‬‭the‬‭UAE‬‭is‬‭positioning‬‭itself‬‭as‬‭a‬
‭global‬ ‭leader‬ ‭in‬ ‭the‬ ‭virtual‬ ‭asset‬ ‭space.‬ ‭The‬ ‭CBUAE‬ ‭has‬ ‭issued‬ ‭guidelines‬ ‭to‬ ‭local‬
‭banks‬ ‭on‬ ‭permitted‬ ‭activities‬‭for‬‭virtual‬‭assets,‬‭including‬‭account‬‭openings‬‭for‬‭Virtual‬
‭Asset‬‭Service‬‭Providers‬‭(VASPs).‬‭91‬ ‭The‬‭Dubai‬‭Financial‬‭Services‬‭Authority‬‭also‬‭published‬
‭a consultation on‬‭token regulation‬‭in March 2022.‬‭92‬
‭Other‬ ‭initiatives‬ ‭include‬ ‭the‬ ‭regulation‬ ‭of‬ ‭the‬ ‭Abu‬ ‭Dhabi‬ ‭Global‬ ‭Market‬ ‭(ADGM)‬
s‭ ince‬ ‭2018‬ ‭and‬ ‭the‬ ‭establishment‬ ‭in‬ ‭Dubai‬ ‭of‬ ‭the‬ ‭first‬ ‭Virtual‬ ‭Asset‬ ‭Regulatory‬
‭Authority‬‭(VARA).‬‭93‬ ‭This‬ ‭authority‬ ‭is‬ ‭crafting‬ ‭an‬ ‭extensive‬ ‭regulatory‬ ‭framework‬ ‭that‬
‭encompasses‬ ‭thorough‬ ‭regulations,‬ ‭licensing‬ ‭procedures,‬ ‭and‬ ‭supervisory‬
‭mechanisms for different categories of VASP.‬
‭ s‬‭far‬‭as‬‭CBDCs‬‭are‬‭concerned,‬‭one‬‭of‬‭the‬‭notable‬‭efforts‬‭in‬‭the‬‭Middle‬‭East‬‭has‬
A
‭been‬ ‭the‬ ‭Project‬ ‭Aber,‬ ‭launched‬ ‭in‬ ‭2019‬‭,‬ ‭in‬ ‭a‬ ‭collaboration‬ ‭between‬ ‭the‬ ‭United‬‭Arab‬
‭Emirates‬ ‭and‬ ‭Saudi‬ ‭Arabia.‬ ‭This‬ ‭collaborative‬ ‭effort‬ ‭seeks‬ ‭to‬ ‭expedite‬ ‭cross-border‬
‭transactions‬‭and‬‭bolster‬‭the‬‭status‬‭of‬‭both‬‭nations‬‭as‬‭key‬‭financial‬‭hubs,‬‭illustrating‬‭the‬
‭regional‬ ‭commitment‬ ‭to‬ ‭advancing‬ ‭digital‬ ‭currency‬ ‭initiatives.‬‭94‬ ‭The‬ ‭United‬ ‭Arab‬
‭88‬
I‭ bid.‬‭, p. 6.‬
‭89‬
‭Ibidem.‬
‭90‬
‭WORLD ECONOMIC FORUM.‬‭Central Bank Digital Currency‬‭Global Interoperability Principles‬‭.‬
‭Geneva: World Economic Forum, 2023. p. 19. Available at:‬
‭91‬
‭PRICEWATERHOUSECOOPERS‬ ‭LLP.‬ ‭PwC‬ ‭Global‬ ‭Crypto‬ ‭Regulation‬ ‭Report‬ ‭2023.‬ ‭PwC‬ ‭Publications,‬
‭2022,‬ ‭p.‬ ‭65.‬ ‭Available‬ ‭at:‬
‭f‭> ‬ . Accessed on: Jan 12, 2024.‬
‭92‬
‭Ibidem.‬
‭93‬
‭GOVERNMENT‬ ‭OF‬ ‭DUBAI.‬ ‭Virtual‬ ‭Assets‬ ‭Regulatory‬ ‭Authority.‬ ‭VARA‬ ‭Website,‬ ‭2024.‬‭Available‬‭at:‬
‭<‭h‬ ttps://www.vara.ae/en/‬‭>. Accessed on: Jan 12, 2024.‬
‭94‬
‭BHARATHAN,‬ ‭Vipin.‬ ‭Digitizing‬ ‭Financial‬ ‭Markets:‬ ‭Project‬ ‭Aber‬ ‭From‬ ‭Saudi‬ ‭Arabia‬ ‭And‬ ‭The‬ ‭UAE‬
‭Addresses‬ ‭Cross‬ ‭Border‬ ‭Payments‬ ‭With‬ ‭Digital‬ ‭Currencies.‬ ‭Forbes‬ ‭Digital‬ ‭Assets‬‭,‬ ‭2020.‬ ‭Available‬ ‭at:‬
‭19‬
‭ mirates‬ ‭are‬ ‭also‬ ‭key‬ ‭members‬ ‭of‬ ‭the‬ ‭mBridge‬ ‭project,‬ ‭focused‬ ‭on‬ ‭cross-border‬
E
‭payments.‬‭95‬
I‭ n‬ ‭Turkey‬‭,‬ ‭the‬ ‭regulatory‬ ‭stance‬ ‭toward‬ ‭crypto‬ ‭-assets‬ ‭is‬ ‭marked‬‭by‬‭caution‬‭,‬

‭focusing‬ ‭on‬ ‭mitigating‬ ‭risks‬ ‭related‬ ‭to‬ ‭money‬ ‭laundering,‬ ‭financial‬ ‭crimes,‬ ‭and‬
‭safeguarding‬‭consumer‬‭interests.‬‭96‬ ‭Although‬‭the‬‭Capital‬‭Markets‬‭Board‬‭of‬‭Turkey‬‭(CMB)‬
‭has‬ ‭not‬ ‭definitively‬ ‭classified‬ ‭which‬ ‭crypto-assets‬ ‭are‬ ‭considered‬ ‭securities,‬ ‭it‬
‭acknowledges‬ ‭that‬ ‭those‬ ‭fitting‬ ‭the‬ ‭criteria‬ ‭would‬ ‭fall‬ ‭under‬ ‭the‬ ‭purview‬ ‭of‬ ‭existing‬
‭capital‬‭market‬‭regulations.‬‭97‬ ‭The‬‭government‬‭and‬‭regulators‬‭have‬‭formed‬‭joint‬‭working‬
‭groups‬ ‭to‬ ‭explore‬ ‭potential‬ ‭regulatory‬ ‭changes,‬ ‭including‬ ‭amendments‬‭to‬‭the‬‭Turkish‬
‭capital‬ ‭market‬ ‭law,‬ ‭which‬ ‭may‬ ‭introduce‬ ‭licensing‬ ‭requirements‬ ‭for‬ ‭crypto-asset‬
‭service‬ ‭providers‬ ‭and‬ ‭mandate‬ ‭that‬ ‭Turkish‬ ‭residents‬ ‭conduct‬ ‭crypto-asset‬
‭transactions‬ ‭with‬‭authorized‬‭institutions.‬‭98‬ ‭As‬‭of‬‭now,‬‭Turkey‬‭lacks‬‭specific‬‭regulatory‬
‭frameworks‬ ‭for‬ ‭the‬ ‭sale‬ ‭and‬ ‭promotion‬ ‭of‬ ‭crypto-assets,‬ ‭as‬ ‭well‬‭as‬‭for‬‭the‬‭prudential‬
‭treatment of crypto-assets and stablecoins.‬
‭ he‬ ‭Central‬ ‭Bank‬ ‭of‬‭the‬‭Republic‬‭of‬‭Turkey‬‭(CBRT)‬‭implemented‬‭the‬‭Regulation‬

T
‭on‬‭the‬‭Disuse‬‭of‬‭Crypto‬‭Assets‬‭in‬‭April‬‭2021,‬‭which‬‭prohibits‬‭the‬‭direct‬‭or‬‭indirect‬‭use‬‭of‬
‭certain‬ ‭crypto-assets‬‭in‬‭payments.‬‭99‬ ‭The‬‭CBRT‬‭is‬‭in‬‭the‬‭process‬‭of‬‭developing‬‭a‬‭CBDC‬
‭named‬‭"digital‬‭Turkish‬‭lira."‬‭However,‬‭details‬‭regarding‬‭the‬‭official‬‭rollout‬‭to‬‭consumers‬
‭remain unconfirmed.‬‭100‬
‭Africa‬
‭ igeria‬ ‭recently‬ ‭adopted‬ ‭a‬ ‭national‬ ‭blockchain‬ ‭strategy‬ ‭to‬ ‭foster‬ ‭its‬ ‭digital‬
N
‭economy‬‭and‬‭introduced‬‭the‬‭eNaira‬‭,‬‭the‬‭digital‬‭currency‬‭issued‬‭by‬‭the‬‭Central‬‭Bank‬‭of‬
‭Nigeria,‬ ‭demonstrating‬ ‭a‬ ‭strong‬ ‭commitment‬‭to‬‭advancing‬‭digital‬‭financial‬‭innovation‬
‭and‬ ‭blockchain‬‭.‭1‬01‬ ‭Regarding‬ ‭crypto-assets,‬ ‭although‬ ‭they‬ ‭are‬ ‭not‬ ‭recognized‬ ‭as‬ ‭legal‬
‭tender‬ ‭by‬ ‭its‬ ‭Central‬‭Bank‬‭and‬‭faced‬‭transaction‬‭restrictions‬‭in‬‭2021,‬‭they‬‭continue‬‭to‬
‭ ‭h‬ ttps://www.forbes.com/sites/vipinbharathan/2021/12/29/digitizing-financial-markets-project-aber-from-saudi-‬
<
‭arabia-and-the-uae-addresses-cross-border-interoperability-of-digital-currencies/?sh=6d0dd1f913dd‬‭>.‬ ‭Accessed‬
‭on: Jan 12, 2024.‬
‭95‬
‭Geneva:‬ ‭World‬ ‭Economic‬ ‭Forum,‬ ‭2023.‬ ‭p.‬ ‭13.‬ ‭Available‬ ‭at:‬
‭96‬
‭ONAR,‬‭Alper;‬‭SUBAŞI,‬‭Emre.‬‭Blockchain‬‭&‬‭Cryptocurrency‬‭Laws‬‭and‬‭Regulations‬‭2024‬‭|‬‭Turkey/Türkiye.‬
‭Global‬ ‭Legal‬ ‭Insights,‬ ‭2024.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/turkey-trkiye‬‭>.‬ ‭Accessed‬
‭on: Jan 12, 2024.‬
‭97‬
‭Ibidem.‬
‭98‬
‭Ibidem.‬
‭99‬
‭PRICEWATERHOUSECOOPERS‬ ‭LLP.‬ ‭PwC‬ ‭Global‬ ‭Crypto‬‭Regulation‬‭Report‬‭2023.‬‭PwC‬‭Publications,‬
‭2022,‬ ‭p.‬ ‭64.‬ ‭Available‬ ‭at:‬
‭f‭> ‬ . Accessed on: Jan 12, 2024.‬
‭100‬
‭Ibidem.‬
‭101‬
‭SALAMI,‬‭Iwa.‬‭Why‬‭the‬‭digital‬‭currencies‬‭are‬‭hard‬‭to‬‭catch‬‭on‬‭in‬‭Nigeria.‬‭Journal‬‭Nexo‬‭,‬‭2023.‬‭Available‬‭at:‬
‭<‭h‬ ttps://www.nexojornal.com.br/externo/2023/08/08/por-que-a-moeda-digital-custa-a-emplacar-na-nigeria‬‭>.‬
‭20‬
‭ e‬ ‭traded‬ ‭on‬‭exchanges‬‭and‬‭peer-to-peer‬‭platforms.‬‭102‬ ‭Regulations‬‭introduced‬‭in‬‭2022‬
b
‭by‬‭the‬‭Securities‬‭and‬‭Exchange‬‭Commission‬‭of‬‭Nigeria‬‭require‬‭licenses‬‭for‬‭crypto-asset‬
‭exchanges‬ ‭and‬ ‭regularize‬ ‭their‬ ‭legal‬ ‭status.‬‭103‬ ‭However,‬‭converting‬‭crypto-assets‬‭into‬
‭fiat‬ ‭currency‬ ‭remains‬ ‭a‬ ‭challenge,‬ ‭but‬ ‭solutions‬ ‭such‬ ‭as‬ ‭conversion‬ ‭apps‬ ‭and‬
‭exchanges‬ ‭are‬ ‭available.‬ ‭Transactions‬ ‭involving‬ ‭crypto-assets‬ ‭are‬ ‭subject‬ ‭to‬ ‭capital‬
‭gains‬ ‭tax‬ ‭in‬ ‭Nigeria,‬ ‭with‬ ‭ongoing‬ ‭plans‬ ‭to‬ ‭refine‬ ‭the‬‭tax‬‭legislation‬‭concerning‬‭these‬
‭assets.‬
‭In‬ ‭South‬ ‭Africa‬‭,‬ ‭the‬ ‭government‬ ‭and‬ ‭regulatory‬ ‭authorities‬ ‭have‬ ‭been‬
‭initiative-taking‬‭in‬‭Setting‬‭up‬‭a‬‭regulatory‬‭framework‬‭for‬‭crypto-assets‬‭in‬‭response‬‭to‬
‭their‬ ‭increasing‬ ‭adoption.‬‭104‬ ‭Initiated‬ ‭in‬ ‭2019,‬ ‭the‬ ‭Crypto-Asset‬ ‭Regulatory‬ ‭Working‬
‭Group‬ ‭of‬ ‭South‬ ‭Africa‬ ‭has‬ ‭forwarded‬ ‭significant‬ ‭recommendations‬ ‭such‬ ‭as‬
‭implementing‬ ‭anti-money‬ ‭laundering‬ ‭measures‬ ‭and‬ ‭extending‬ ‭financial‬ ‭sector‬
‭regulations‬ ‭to‬ ‭include‬ ‭crypto-assets.‬‭105‬ ‭Subsequent‬ ‭regulatory‬ ‭measures‬ ‭in‬ ‭2022‬
‭included:‬ ‭prudential‬ ‭authority‬ ‭guidelines‬ ‭on‬ ‭AML/CFT‬ ‭106‬‭controls‬ ‭for‬ ‭crypto-assets‬
‭issued‬‭in‬‭August;‬‭the‬‭Financial‬‭Sector‬‭Conduct‬‭Authority‬‭recognizing‬‭crypto-assets‬‭as‬
‭a‬ ‭financial‬ ‭product‬ ‭in‬ ‭October,‬ ‭requiring‬ ‭licensing‬ ‭for‬ ‭related‬ ‭services‬ ‭by‬ ‭November‬
‭2023;‬ ‭and‬ ‭amendments‬ ‭in‬ ‭November‬ ‭to‬ ‭the‬ ‭Financial‬ ‭Intelligence‬ ‭Centre,‬ ‭which‬
‭expanded‬ ‭the‬ ‭definitions‬ ‭of‬ ‭"accountable‬ ‭institution"‬ ‭to‬ ‭cover‬ ‭activities‬ ‭related‬ ‭to‬
‭crypto-assets.‬‭107‬ ‭Additionally,‬ ‭the‬ ‭South‬ ‭African‬ ‭Reserve‬ ‭Bank‬ ‭is‬ ‭exploring‬ ‭the‬
‭implementation‬‭of‬‭a‬‭CBDC‬‭and‬‭other‬‭forms‬‭of‬‭tokenized‬‭money,‬‭indicating‬‭an‬‭innovative‬
‭approach to regulation and understanding of digital currency.‬‭108‬
‭Mauritius‬ ‭has‬ ‭taken‬ ‭significant‬ ‭steps‬ ‭in‬ ‭regulating‬ ‭crypto-assets‬ ‭by‬ ‭enacting‬
t‭ he‬ ‭Virtual‬ ‭Asset‬ ‭and‬ ‭Initial‬ ‭Token‬ ‭Offerings‬ ‭Act‬ ‭(VAITOS‬ ‭Act)‬ ‭in‬ ‭February‬ ‭2022.‬‭109‬
‭According‬ ‭to‬ ‭this‬ ‭legislation,‬ ‭the‬ ‭Financial‬ ‭Services‬ ‭Commission‬ ‭(FSC)‬‭is‬‭appointed‬‭as‬
‭the‬ ‭regulator‬ ‭and‬ ‭supervisor‬ ‭of‬ ‭Virtual‬ ‭Asset‬‭Service‬‭Providers‬‭(VASPs)‬‭and‬‭issuers‬‭of‬
‭initial‬ ‭token‬ ‭offerings‬ ‭(ITOs).‬‭110‬ ‭The‬ ‭VAITOS‬ ‭Act‬ ‭establishes‬ ‭a‬ ‭regulatory‬ ‭framework,‬
‭including‬ ‭five‬ ‭different‬ ‭VASP‬ ‭licenses,‬ ‭and‬ ‭requires‬ ‭VASPs‬ ‭and‬ ‭ITO‬ ‭issuers‬ ‭to‬ ‭be‬
‭registered‬‭with‬‭the‬‭FSC.‬‭It‬‭also‬‭introduces‬‭travel‬‭rules‬‭to‬‭govern‬‭cross-border‬‭transfers‬
‭102‬
‭ eneva:‬
G ‭World‬ ‭Economic‬ ‭Forum,‬ ‭2023.‬ ‭p.‬ ‭11.‬ ‭Available‬ ‭at:‬
‭103‬
‭Ibidem.‬
‭104‬
‭LACAPRA,‬‭Emi.‬‭An‬‭overview‬‭of‬‭the‬‭cryptocurrency‬‭regulations‬‭in‬‭South‬‭Africa‬‭.‬‭Cointelegraph,‬‭2023.‬
‭Available‬‭at:‬‭<‬‭https://cointelegraph.com/learn/cryptocurrency-regulations-in-south-africa‬‭>.‬‭Accessed‬‭on:‬‭March‬
‭13, 2024.‬
‭105‬
‭TSHIKI,‬ ‭Kayaletu.‬ ‭Regulation‬ ‭of‬ ‭crypto‬ ‭assets‬ ‭in‬ ‭South‬ ‭Africa:‬ ‭Challenges‬‭and‬‭opportunities.‬‭De‬‭Rebus‬‭,‬
‭<‭h‬ ttps://www.derebus.org.za/regulation-of-crypto-assets-in-south-africa-challenges-and-opportunities/‬‭>.‬
‭106‬
‭The‬ ‭primary‬ ‭purpose‬ ‭of‬ ‭adopting‬ ‭anti-money‬ ‭laundering‬ ‭and‬ ‭counter-financing‬ ‭of‬ ‭terrorism‬ ‭measures‬
‭(AML/CFT)‬‭is‬‭to‬‭safeguard‬‭the‬‭financial‬‭system‬‭from‬‭misuse‬‭by‬‭criminals‬‭and‬‭terrorists.‬‭Through‬‭the‬‭effective‬
‭execution‬‭of‬‭these‬‭measures,‬‭nations‬‭are‬‭able‬‭to‬‭identify‬‭and‬‭interrupt‬‭financial‬‭flows‬‭associated‬‭with‬‭significant‬
‭criminal activities and terrorism, thereby enhancing societal security.‬
‭107‬
‭PRICEWATERHOUSECOOPERS‬ ‭LLP.‬ ‭PwC‬ ‭Global‬ ‭Crypto‬ ‭Regulation‬ ‭Report‬ ‭2023.‬ ‭PwC‬‭Publications‬‭,‬
‭2022,‬ ‭p.‬ ‭60.‬ ‭Available‬ ‭at:‬
‭f‭> ‬ . Accessed on: Jan 12, 2024.‬
‭108‬
‭Ibidem.‬
‭109‬
‭Ibid.‬‭, p. 53.‬
‭110‬
‭Ibidem.‬
‭21‬
‭ f‬ ‭virtual‬ ‭assets‬ ‭and‬ ‭emphasizes‬ ‭a‬ ‭risk-based‬ ‭approach‬ ‭to‬ ‭AML/CFT‬ ‭obligations.‬‭111‬ ‭In‬
o
‭addition,‬ ‭the‬ ‭FSC‬ ‭has‬ ‭issued‬ ‭rules‬ ‭for‬ ‭the‬ ‭publication‬ ‭of‬ ‭advertisements‬ ‭related‬ ‭to‬
‭cryptocurrency products and services.‬‭112‬
‭The‬‭regulatory‬‭framework‬‭imposes‬‭stringent‬‭prudential‬‭and‬‭capital‬‭standards‬‭on‬
‭ ASPs,‬ ‭requiring‬ ‭them‬‭to‬‭uphold‬‭substantial‬‭capital‬‭and‬‭liquidity‬‭reserves.‬‭113‬ ‭Issuers‬‭of‬
V
‭virtual‬ ‭tokens‬ ‭must‬ ‭also‬ ‭submit‬ ‭detailed‬ ‭disclosures,‬ ‭including‬ ‭white‬ ‭papers‬‭and‬‭legal‬
‭opinions,‬ ‭to‬ ‭demonstrate‬ ‭adherence‬ ‭to‬ ‭the‬ ‭VAITOS‬ ‭Act.‬‭114‬ ‭Additionally,‬ ‭Mauritius‬ ‭is‬
‭actively‬ ‭exploring‬ ‭the‬ ‭launch‬ ‭of‬ ‭a‬ ‭CBDC,‬ ‭the‬ ‭Digital‬ ‭Rupee‬‭,‬ ‭in‬ ‭collaboration‬ ‭with‬ ‭the‬
‭International‬ ‭Monetary‬ ‭Fund,‬ ‭reflecting‬ ‭the‬ ‭nation's‬ ‭commitment‬ ‭to‬ ‭fostering‬
‭innovation in the crypto asset sector.‬‭115‬
‭Comparative analysis‬
‭ he‬ ‭World‬ ‭Economic‬ ‭Forum's‬ ‭Global‬ ‭Future‬ ‭Council‬ ‭on‬ ‭Cryptocurrencies‬

T
‭highlights‬ ‭three‬ ‭dominant‬ ‭legal‬ ‭frameworks‬ ‭that‬ ‭oversee‬ ‭cryptocurrency‬ ‭operations‬
‭internationally.‬‭116‬
‭The‬ ‭initial‬ ‭framework‬ ‭consists‬ ‭of‬ ‭permissive‬ ‭laws‬ ‭and‬ ‭regulations‬ ‭(‬‭liberal‬
‭ tance‬‭).‬‭Countries‬‭in‬‭this‬‭category‬‭typically‬‭adopt‬‭a‬‭more‬‭open‬‭and‬‭flexible‬‭approach‬‭to‬
s
‭cryptocurrencies.‬ ‭Such‬ ‭countries‬ ‭often‬ ‭employ‬ ‭a‬ ‭"wait‬ ‭and‬ ‭see"‬ ‭strategy‬‭,‬ ‭closely‬
‭observing‬‭cryptocurrency‬‭market‬‭developments‬‭before‬‭instituting‬‭targeted‬‭regulations‬
‭(‬‭ex‬ ‭post‬ ‭regulation).‬ ‭Furthermore,‬ ‭some‬ ‭nations‬ ‭in‬ ‭this‬ ‭category‬ ‭engage‬ ‭in‬
‭public-private‬ ‭partnerships‬ ‭to‬ ‭encourage‬ ‭the‬ ‭growth‬ ‭of‬ ‭the‬ ‭crypto‬ ‭asset‬‭sector,‬‭or‬‭to‬
‭implement‬‭a‬‭comprehensive‬‭regulatory‬‭framework.‬‭These‬‭frameworks‬‭aim‬‭to‬‭integrate‬
‭cryptocurrencies‬ ‭into‬ ‭the‬ ‭financial‬ ‭system‬ ‭while‬ ‭ensuring‬ ‭proper‬ ‭oversight‬ ‭and‬
‭regulation.‬‭117‬
‭The‬ ‭second‬ ‭framework‬ ‭is‬ ‭marked‬ ‭by‬ ‭restrictive‬ ‭laws‬ ‭and‬ ‭regulations‬
(‭ ‬‭prohibitive‬ ‭approach‬‭).‬ ‭Countries‬ ‭with‬‭this‬‭stance‬‭prefer‬‭a‬‭more‬‭restrictive‬‭regulatory‬
‭environment.‬ ‭They‬ ‭often‬ ‭limit‬ ‭or‬ ‭prohibit‬ ‭cryptocurrency‬ ‭activities‬‭entirely,‬‭indicative‬
‭of a risk-averse or conservative perspective towards digital currencies.‬
‭111‬
I‭ bidem.‬
‭112‬
‭Ibidem.‬
‭113‬
‭Ibidem.‬
‭114‬
‭Ibidem.‬
‭115‬
‭BANK‬ ‭OF‬ ‭MAURITIUS.‬ ‭Public‬ ‭Notice:‬ ‭Digital‬ ‭Rupee‬ ‭-‬ ‭Pilot.‬ ‭BoM‬ ‭Website,‬ ‭2024.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://www.bom.mu/media/media-releases/public-notice-digital-rupee-pilot‬‭>.‬‭Accessed on: March 15, 2024.‬
‭116‬
‭WORLD‬ ‭ECONOMIC‬ ‭FORUM.‬ ‭Navigating‬ ‭Cryptocurrency‬ ‭Regulation:‬ ‭An‬ ‭Industry‬ ‭Perspective‬ ‭on‬ ‭the‬
‭Insights‬‭and‬‭Tools‬‭Needed‬‭to‬‭Shape‬‭Balanced‬‭Crypto‬‭Regulation.‬‭Geneva:‬‭World‬‭Economic‬‭Forum‬‭,‬‭2021.‬‭pp.‬
‭18-19.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www3.weforum.org/docs/WEF_Navigating_Cryptocurrency_Regulation_2021.pdf‬‭>.‬ ‭Accessed‬ ‭on:‬
‭January 11, 2024.‬
‭117‬
‭Ibidem.‬
‭22‬
‭ inally,‬‭the‬‭third‬‭category‬‭encompasses‬‭countries‬‭with‬‭partial‬‭or‬‭imminent‬‭bans‬
F
‭on‬‭cryptocurrencies,‬‭or‬‭where‬‭their‬‭legal‬‭status‬‭is‬‭largely‬‭debated‬‭(‬‭unstable‬‭approach‬‭).‬
‭In‬‭these‬‭nations,‬‭the‬‭approach‬‭to‬‭cryptocurrencies‬‭is‬‭not‬‭entirely‬‭clear‬‭or‬‭is‬‭constantly‬
‭shifting,‬ ‭often‬ ‭characterized‬ ‭by‬ ‭partial‬ ‭restrictions‬ ‭or‬ ‭ongoing‬ ‭debates‬ ‭on‬ ‭how‬ ‭to‬
‭properly regulate the sector.‬
‭ he‬ ‭following‬ ‭map‬ ‭visually‬ ‭represents‬ ‭the‬ ‭division‬ ‭of‬ ‭the‬ ‭mentioned‬ ‭categories‬ ‭by‬
T
‭country, based on available data on crypto asset regulation.‬
‭Fonte:‬‭Atlantic Council‬‭(2023) (adaptation).‬‭118‬
‭ he‬‭regulatory‬‭framework‬‭in‬‭North‬‭America,‬‭particularly‬‭in‬‭the‬‭United‬‭States‬‭,‬‭is‬
T
‭characterized‬ ‭by‬ ‭a‬ ‭series‬ ‭of‬ ‭specific‬ ‭regulations‬ ‭on‬ ‭crypto‬ ‭assets‬ ‭without‬‭a‬‭cohesive‬
‭federal‬ ‭guideline.‬ ‭This‬ ‭framework‬ ‭includes‬ ‭extensive‬ ‭oversight‬ ‭covering‬ ‭taxation‬ ‭and‬
‭classification‬ ‭of‬ ‭assets.‬ ‭Comparatively,‬ ‭in‬ ‭Latin‬ ‭America‬ ‭and‬ ‭the‬ ‭Caribbean‬‭,‬ ‭the‬
‭diversity‬‭in‬‭regulation‬‭mirrors‬‭the‬‭region's‬‭economic‬‭disparities.‬‭Notably,‬‭countries‬‭like‬
‭Brazil‬‭,‬ ‭Chile‬‭,‬ ‭and‬ ‭El‬ ‭Salvador‬ ‭are‬ ‭at‬ ‭the‬ ‭forefront‬ ‭with‬ ‭their‬ ‭permissive‬ ‭stance‬ ‭on‬
‭crypto asset regulations.‬
‭Europe‬‭presents‬‭a‬‭more‬‭harmonized‬‭regulatory‬‭approach,‬‭especially‬‭highlighted‬
‭by‬ ‭the‬ ‭European‬ ‭Union's‬ ‭adoption‬ ‭of‬ ‭the‬ ‭MiCA‬ ‭Regulation,‬ ‭which‬ ‭seeks‬ ‭to‬ ‭create‬ ‭a‬
‭thorough‬‭regulatory‬‭framework‬‭for‬‭managing‬‭crypto‬‭assets.‬‭The‬‭United‬‭Kingdom‬‭takes‬
‭a‬ ‭more‬ ‭targeted‬ ‭approach,‬ ‭focusing‬ ‭primarily‬ ‭on‬ ‭certain‬ ‭categories‬ ‭of‬ ‭crypto‬ ‭assets,‬
‭like‬‭stablecoins‬‭.‬
I‭ n‬ ‭the‬ ‭Asia-Pacific,‬ ‭Japan‬ ‭is‬ ‭noted‬ ‭for‬ ‭its‬ ‭forward-thinking‬ ‭and‬ ‭flexible‬
‭regulatory‬ ‭measures‬ ‭that‬ ‭quickly‬ ‭adapt‬ ‭to‬ ‭new‬ ‭developments,‬ ‭whereas‬ ‭Australia‬
‭emphasizes‬‭closing‬‭regulatory‬‭gaps‬‭and‬‭enhancing‬‭consumer‬‭safeguards.‬‭India‬‭adopts‬
‭a‬‭balanced‬‭regulatory‬‭approach,‬‭encouraging‬‭technological‬‭innovation‬‭while‬‭remaining‬
‭118‬
‭ATLANTIC‬‭COUNCIL.‬‭Cryptocurrency‬‭Regulation‬‭Tracker.‬‭Atlantic‬‭Council‬‭Website,‬‭2023.‬‭Disponível‬
e‭ m:‬ ‭<‭h‬ ttps://www.atlanticcouncil.org/programs/geoeconomics-center/cryptoregulationtracker/‬‭>.‬ ‭Acesso‬‭em:‬‭10‬
‭jan 2024.‬
‭23‬
v‭ igilant‬‭about‬‭virtual‬‭assets.‬‭Meanwhile,‬‭Singapore‬‭is‬‭actively‬‭working‬‭to‬‭establish‬‭itself‬
‭as‬ ‭a‬ ‭leading,‬ ‭accountable‬ ‭hub‬ ‭within‬ ‭the‬ ‭global‬ ‭digital‬ ‭asset‬ ‭ecosystem.‬ ‭China‬
‭maintains‬ ‭a‬ ‭strictly‬ ‭cautious‬ ‭stance,‬ ‭banning‬ ‭the‬ ‭use‬ ‭of‬ ‭virtual‬ ‭currencies‬ ‭as‬ ‭legal‬
‭tender, but allowing‬‭blockchain‬‭development.‬
I‭ n‬ ‭contrast,‬ ‭the‬ ‭United‬ ‭Arab‬ ‭Emirates‬ ‭take‬ ‭a‬ ‭forefront‬ ‭position‬ ‭in‬ ‭the‬ ‭Middle‬
‭East‬ ‭with‬ ‭progressive‬ ‭regulations‬ ‭governing‬ ‭virtual‬ ‭assets.‬ ‭This‬ ‭focus‬ ‭contrasts‬ ‭with‬
‭the‬‭more‬‭cautious‬‭approach‬‭of‬‭countries‬‭like‬‭Turkey‬‭,‬‭which‬‭expresses‬‭concerns‬‭about‬
‭money‬ ‭laundering‬ ‭and‬ ‭consumer‬ ‭protection.‬ ‭In‬ ‭Africa,‬ ‭the‬ ‭regulatory‬‭approach‬‭varies‬
‭significantly,‬ ‭with‬ ‭countries‬ ‭like‬ ‭Nigeria‬ ‭and‬ ‭South‬ ‭Africa‬ ‭adopting‬ ‭initiative-taking‬
‭stances‬ ‭to‬ ‭regulate‬ ‭the‬ ‭growing‬ ‭use‬ ‭of‬ ‭crypto‬ ‭assets.‬ ‭This‬ ‭diversity‬ ‭reflects‬ ‭the‬
‭different economic needs and regulatory challenges of the continent.‬
‭ onsequently,‬ ‭the‬ ‭international‬ ‭regulatory‬ ‭landscape‬ ‭for‬ ‭crypto‬ ‭assets‬ ‭is‬

C
‭continually‬ ‭evolving,‬ ‭with‬ ‭regional‬ ‭policies‬ ‭being‬ ‭tailored‬ ‭to‬ ‭balance‬ ‭innovation's‬
‭advantages‬ ‭against‬ ‭the‬ ‭imperatives‬ ‭of‬ ‭financial‬ ‭security,‬ ‭economic‬ ‭expansion,‬ ‭and‬
‭consumer‬‭safety.‬‭This‬‭comprehensive‬‭analysis‬‭not‬‭only‬‭sheds‬‭light‬‭on‬‭prevailing‬‭trends‬
‭but‬ ‭also‬ ‭forecasts‬ ‭the‬ ‭persistent‬ ‭challenges‬ ‭and‬ ‭opportunities‬ ‭that‬ ‭will‬ ‭shape‬ ‭the‬
‭future of crypto assets on the global stage.‬
‭ lockchain‬‭regulation‬‭associated‬‭with‬‭crypto‬‭assets‬‭around‬‭the‬‭world‬‭reflects‬‭a‬
B
‭diversity‬ ‭of‬ ‭approaches‬ ‭and‬ ‭maturity‬ ‭levels.‬ ‭In‬ ‭the‬ ‭United‬ ‭States‬‭,‬ ‭the‬ ‭American‬
‭Congress‬ ‭recently‬ ‭debated‬ ‭proposals‬ ‭to‬ ‭regulate‬ ‭crypto‬ ‭asset‬‭operations‬‭and‬‭explore‬
‭the‬ ‭use‬ ‭of‬ ‭blockchain‬ ‭technology‬ ‭in‬ ‭public‬ ‭administration,‬ ‭reflecting‬ ‭the‬ ‭growing‬
‭importance‬ ‭of‬ ‭this‬ ‭field.‬ ‭Across‬ ‭different‬ ‭territories‬ ‭including‬ ‭The‬ ‭Bahamas‬‭,‬ ‭Japan‬‭,‬
‭Australia‬‭,‬ ‭and‬ ‭the‬ ‭European‬ ‭Union‬‭,‬ ‭extensive‬ ‭regulatory‬ ‭frameworks‬ ‭have‬ ‭been‬
‭established‬ ‭concerning‬ ‭digital‬ ‭assets,‬ ‭covering‬ ‭both‬ ‭cryptocurrencies‬ ‭and‬ ‭their‬
‭blockchain‬ ‭operations.‬ ‭The‬ ‭UAE‬ ‭is‬ ‭positioning‬ ‭itself‬ ‭as‬ ‭a‬ ‭pivotal‬ ‭player‬ ‭in‬ ‭the‬ ‭virtual‬
‭asset‬‭domain‬‭by‬‭establishing‬‭specific‬‭regulatory‬‭authorities‬‭for‬‭virtual‬‭assets‬‭and‬‭their‬
‭blockchains‬‭.‬ ‭Meanwhile,‬ ‭South‬ ‭Africa‬ ‭and‬ ‭Mauritius‬ ‭have‬ ‭implemented‬ ‭regulatory‬
‭protocols‬ ‭aimed‬ ‭at‬ ‭governing‬ ‭the‬ ‭operations‬ ‭of‬ ‭cryptocurrency‬ ‭blockchains‬ ‭with‬
‭specific emphasis on AML/CFT measures.‬
‭Regarding‬ ‭CBDCs‬ ‭in‬ ‭the‬ ‭Americas,‬ ‭the‬ ‭United‬ ‭States‬ ‭lacks‬ ‭a‬ ‭specific‬ ‭federal‬
‭policy‬ ‭despite‬ ‭comprehensive‬ ‭oversight‬ ‭over‬ ‭cryptocurrencies,‬ ‭contrasting‬ ‭with‬
‭innovative‬ ‭initiatives‬ ‭elsewhere‬ ‭in‬ ‭the‬ ‭Americas.‬ ‭Notably,‬ ‭the‬ ‭Bahamas‬ ‭with‬ ‭its‬ ‭Sand‬
‭Dollar‬ ‭and‬ ‭Jamaica‬ ‭with‬ ‭the‬ ‭Jam-Dex‬ ‭exemplify‬ ‭how‬ ‭small‬ ‭island‬ ‭economies‬ ‭are‬
‭pioneering‬‭CBDC‬‭adoption,‬‭focusing‬‭on‬‭financial‬‭inclusion‬‭and‬‭the‬‭modernization‬‭of‬‭the‬
‭financial‬ ‭system.‬ ‭Brazil‬ ‭too‬ ‭leads‬ ‭with‬ ‭the‬ ‭Drex,‬ ‭underscoring‬ ‭a‬ ‭strong‬ ‭regional‬
‭commitment to integrate digital currencies into its financial ecosystem.‬
I‭ n‬ ‭China‬‭,‬ ‭the‬ ‭approach‬ ‭to‬ ‭CBDCs‬ ‭is‬ ‭marked‬ ‭by‬ ‭significant‬ ‭developments,‬
‭particularly‬ ‭with‬ ‭China‬ ‭and‬ ‭Thailand‬ ‭leading‬ ‭the‬ ‭way.‬ ‭China‬ ‭has‬ ‭been‬ ‭aggressively‬
‭advancing‬‭the‬‭e-CNY,‬‭the‬‭digital‬‭version‬‭of‬‭the‬‭yuan‬‭,‬‭positioning‬‭itself‬‭as‬‭a‬‭global‬‭leader‬
‭in‬‭the‬‭implementation‬‭of‬‭a‬‭CBDC.‬‭This‬‭movement‬‭is‬‭part‬‭of‬‭China's‬‭broader‬‭approach‬‭to‬
‭restrict‬ ‭cryptocurrencies‬ ‭while‬ ‭promoting‬ ‭the‬ ‭development‬ ‭of‬ ‭its‬ ‭own‬ ‭centralized‬
‭digital currency.‬
‭24‬
‭ eanwhile,‬ ‭the‬ ‭European‬‭Commission‬‭adopts‬‭an‬‭integrated‬‭and‬‭holistic‬‭stance‬
M
‭towards‬‭digital‬‭finance,‬‭demonstrated‬‭through‬‭the‬‭rollout‬‭of‬‭the‬‭digital‬‭finance‬‭package‬
‭and‬ ‭the‬ ‭MiCA‬ ‭regulation.‬ ‭In‬ ‭contrast,‬ ‭the‬ ‭post-Brexit‬ ‭United‬ ‭Kingdom‬ ‭pursues‬ ‭an‬
‭independent‬ ‭regulatory‬ ‭route.‬ ‭However,‬ ‭both‬ ‭entities‬ ‭are‬ ‭deeply‬ ‭engaged‬ ‭in‬ ‭the‬
‭exploration and potential development of CBDCs.‬
‭ urthermore,‬ ‭Saudi‬ ‭Arabia‬ ‭enforces‬ ‭a‬‭conservative‬‭policy‬‭towards‬‭CBDCs.‬‭The‬

F
‭region's‬ ‭approach‬ ‭is‬ ‭demonstrated‬ ‭by‬ ‭Project‬ ‭Aber,‬ ‭a‬ ‭collaborative‬ ‭initiative‬ ‭between‬
‭the‬ ‭UAE‬ ‭and‬ ‭Saudi‬ ‭Arabia‬ ‭started‬ ‭in‬ ‭2019.‬ ‭This‬ ‭groundbreaking‬ ‭project‬ ‭focuses‬ ‭on‬
‭enhancing‬ ‭cross-border‬ ‭transaction‬ ‭efficiency,‬ ‭aiming‬ ‭to‬ ‭strengthen‬ ‭both‬ ‭nations'‬
‭statuses‬ ‭as‬ ‭international‬ ‭financial‬ ‭centers.‬ ‭This‬ ‭effort‬ ‭underscores‬ ‭the‬ ‭regional‬
‭dedication‬‭to‬‭fostering‬‭advancements‬‭in‬‭digital‬‭currencies‬‭and‬‭enhancing‬‭collaborative‬
‭efforts within the financial sector.‬
‭Africa‬ ‭shows‬ ‭a‬ ‭trend‬ ‭toward‬ ‭leniency‬ ‭with‬ ‭nations‬ ‭such‬ ‭as‬ ‭Nigeria‬ ‭e‬ ‭South‬
‭ frica‬‭adopting‬‭initiative-taking‬‭roles.‬‭Nigeria‬‭has‬‭rolled‬‭out‬‭the‬‭eNaira‬‭to‬‭boost‬‭digital‬
A
‭financial‬ ‭innovation,‬ ‭and‬ ‭South‬ ‭Africa‬ ‭is‬ ‭examining‬ ‭the‬ ‭integration‬ ‭of‬ ‭CBDCs‬ ‭into‬ ‭its‬
‭broader financial strategies.‬
‭This‬ ‭overview‬ ‭of‬ ‭regional‬ ‭strategies‬‭concerning‬‭CBDCs‬‭portrays‬‭a‬‭multifaceted‬

‭ nd‬‭diverse‬‭global‬‭scenario.‬‭Certain‬‭regions‬‭like‬‭the‬‭Americas‬‭are‬‭known‬‭for‬‭their‬‭array‬
a
‭of‬ ‭progressive‬ ‭and‬ ‭innovative‬ ‭measures,‬ ‭whereas‬ ‭places‬ ‭like‬ ‭China‬ ‭maintain‬ ‭a‬
‭conservative‬ ‭and‬ ‭restrictive‬ ‭posture.‬ ‭In‬ ‭Europe,‬ ‭the‬ ‭contrast‬ ‭between‬ ‭the‬ ‭European‬
‭Union’s‬ ‭regulatory‬ ‭cohesion‬ ‭and‬ ‭the‬ ‭United‬ ‭Kingdom's‬ ‭tailored‬ ‭approach‬ ‭underscores‬
‭the‬ ‭complexities‬ ‭of‬‭achieving‬‭regulatory‬‭harmonization‬‭against‬‭a‬‭backdrop‬‭of‬‭political‬
‭shifts.‬ ‭Meanwhile,‬‭in‬‭the‬‭Middle‬‭East,‬‭initiatives‬‭such‬‭as‬‭Project‬‭Aber‬‭demonstrate‬‭the‬
‭effectiveness‬‭of‬‭regional‬‭cooperation‬‭in‬‭advancing‬‭CBDCs.‬‭Africa,‬‭in‬‭turn,‬‭showcases‬‭a‬
‭variety‬ ‭of‬ ‭approaches‬ ‭reflecting‬‭the‬‭different‬‭economic‬‭and‬‭regulatory‬‭realities‬‭of‬‭the‬
‭continent‬
‭Challenges and Risks‬
‭Governing‬ ‭digital‬ ‭assets‬ ‭and‬‭blockchain‬‭technology‬‭involves‬‭distinct‬‭challenges‬

f‭ or‬ ‭policymakers‬ ‭and‬ ‭regulators.‬ ‭The‬ ‭inherent‬ ‭technical‬ ‭complexity‬ ‭and‬ ‭the‬ ‭swiftly‬
‭evolving‬‭landscape‬‭of‬‭these‬‭technologies‬‭make‬‭it‬‭difficult‬‭to‬‭develop‬‭standards‬‭that‬‭can‬
‭continuously‬ ‭and‬ ‭accurately‬‭keep‬‭pace‬‭with‬‭constant‬‭innovation.‬‭The‬‭decentralization‬
‭of‬ ‭many‬ ‭blockchain‬ ‭applications‬ ‭challenges‬‭119‬ ‭traditional‬ ‭regulatory‬ ‭paradigms,‬ ‭while‬
‭119‬
‭PINTO,‬‭Maurício;‬‭VELOSO,‬‭Alan;‬‭EVARISTO,‬‭Bruno;‬‭SOUSA,‬‭Jeffson‬‭C.;‬‭PINHEIRO,‬‭Billy;‬‭ABELÉM,‬
‭Antônio.‬ ‭Decentralized‬ ‭Identity‬ ‭and‬ ‭Blockchain:‬ ‭An‬ ‭exploratory‬ ‭study‬ ‭on‬ ‭the‬ ‭opportunities‬ ‭and‬
‭25‬
t‭ he‬‭myriad‬‭of‬‭different‬‭regulations‬‭on‬‭cryptocurrencies—from‬‭permissive‬‭to‬‭prohibitive‬
‭and‬ ‭unstable—creates‬ ‭uncertainties‬ ‭regarding‬‭jurisdiction‬‭and‬‭applicability‬‭of‬‭existing‬
‭laws, as demonstrated in the previous sections.‬
‭Regulators‬ ‭around‬ ‭the‬ ‭world,‬ ‭such‬ ‭as‬ ‭in‬ ‭Brazil,‬ ‭must‬ ‭address‬ ‭the‬ ‭pivotal‬
‭ hallenge‬ ‭of‬ ‭balancing‬ ‭the‬ ‭encouragement‬ ‭of‬ ‭innovation‬ ‭with‬ ‭the‬ ‭safeguarding‬ ‭of‬
c
‭consumer‬ ‭interests‬‭and‬‭the‬‭stability‬‭of‬‭financial‬‭systems‬‭.‬‭120‬ ‭In‬‭addition,‬‭the‬‭equation‬
‭must‬ ‭account‬ ‭for‬ ‭risks‬ ‭ranging‬ ‭from‬ ‭systemic‬ ‭risks‬ ‭associated‬ ‭with‬ ‭the‬ ‭widespread‬
‭adoption‬ ‭of‬ ‭CBDCs‬ ‭to‬ ‭privacy‬ ‭implications‬ ‭for‬ ‭users‬‭121‬ ‭in‬‭increasingly‬‭digital‬‭financial‬
‭systems.‬
‭ eveloping‬ ‭regulations‬ ‭and‬ ‭standards‬ ‭that‬ ‭emphasize‬ ‭cybersecurity‬ ‭is‬

D
‭122‬
‭imperative‬ ‭to‬ ‭shield‬ ‭financial‬ ‭technology‬ ‭infrastructures‬ ‭from‬ ‭digital‬ ‭threats,‬
‭impacting‬ ‭both‬ ‭the‬ ‭system‬ ‭and‬ ‭its‬ ‭users.‬ ‭Creating‬ ‭this‬ ‭cybersecurity‬ ‭protection‬
‭requires‬ ‭not‬ ‭just‬ ‭the‬ ‭implementation‬ ‭of‬ ‭advanced‬ ‭technological‬ ‭solutions‬ ‭but‬ ‭also‬
‭ongoing‬ ‭monitoring‬ ‭and‬ ‭regular‬ ‭updates‬ ‭to‬ ‭guard‬ ‭against‬ ‭new‬ ‭vulnerabilities.‬ ‭Beyond‬
‭cybersecurity‬ ‭risks‬‭,‬ ‭given‬ ‭the‬ ‭vulnerability‬ ‭of‬ ‭consumers,‬‭their‬‭protection‬‭123‬ ‭emerges‬
‭as‬ ‭a‬ ‭central‬ ‭priority‬ ‭to‬ ‭address‬ ‭consumer‬ ‭risk‬‭,‬ ‭considering‬ ‭the‬ ‭potential‬ ‭lack‬ ‭of‬
‭understanding‬ ‭of‬ ‭technologies‬ ‭by‬ ‭users‬‭,‬ ‭which‬ ‭makes‬ ‭them‬ ‭susceptible‬‭to‬‭risks‬‭and‬
‭frauds.‬
‭ nother‬‭important‬‭point‬‭of‬‭risk‬‭is‬‭the‬‭(iii)‬‭potential‬‭for‬‭digital‬‭assets‬‭to‬‭be‬‭used‬
A
‭in‬‭illicit‬‭activities‬‭,‬‭such‬‭as‬‭money‬‭laundering,‬‭124‬ ‭terrorism‬‭financing,‬‭illegal‬‭trade,‬‭125‬ ‭tax‬
‭evasion,‬ ‭among‬ ‭others,‬ ‭necessitating‬ ‭that‬ ‭any‬ ‭measures‬ ‭take‬ ‭into‬ ‭account‬ ‭the‬
‭establishment‬ ‭of‬ ‭strict‬ ‭rules‬ ‭to‬ ‭prevent‬ ‭these‬ ‭acts‬‭.‬ ‭These‬ ‭measures‬ ‭must‬ ‭balance‬
‭effectiveness‬ ‭in‬ ‭preventing‬ ‭illicit‬ ‭uses‬ ‭with‬ ‭maintaining‬ ‭operational‬ ‭efficiency‬ ‭and‬
‭privacy‬ ‭for‬ ‭legitimate‬ ‭users.‬ ‭It‬ ‭is‬ ‭challenging‬ ‭to‬ ‭(iv)‬ ‭develop‬ ‭regulations‬ ‭that‬ ‭remain‬
‭flexible‬ ‭to‬ ‭accommodate‬ ‭ongoing‬ ‭innovation‬ ‭while‬ ‭being‬ ‭strong‬ ‭enough‬‭to‬‭deter‬‭the‬
‭misuse of financial systems.‬
c‭ hallenges‬ ‭of‬ ‭existing‬ ‭solutions‬‭.‬ ‭In:‬ ‭Colloquium‬ ‭on‬ ‭Blockchain‬ ‭and‬ ‭Decentralized‬ ‭Web‬ ‭(CBlockchain),‬ ‭1,‬
‭2023,‬ ‭João‬ ‭Pessoa/PB.‬ ‭Annals‬ ‭[...].‬ ‭Porto‬ ‭Alegre:‬ ‭Sociedade‬ ‭Brasileira‬ ‭de‬ ‭Computação,‬ ‭2023.‬ ‭pp.‬ ‭43-48.‬
‭Available at: <‬‭https://doi.org/10.5753/cblockchain.2023.230594‬‭>.‬‭Accessed on: January 24, 2024.‬
‭120‬
‭BAPTISTA,‬ ‭Patrícia;‬ ‭KELLER,‬ ‭Clara‬ ‭Iglesias.‬ ‭Why,‬ ‭when,‬ ‭and‬ ‭how‬ ‭to‬ ‭regulate‬ ‭new‬ ‭technologies?‬ ‭The‬
‭challenges‬‭posed‬‭by‬‭disruptive‬‭innovations.‬‭Journal‬‭Revista‬‭de‬‭Direito‬‭Administrativo‬‭,‬‭v.‬‭273,‬‭pp.‬‭123-163,‬
‭2016.‬
‭121‬
‭JENKINSON,‬‭Gareth.‬‭CBDC‬‭frameworks‬‭should‬‭protect‬‭user‬‭privacy‬‭and‬‭monetary‬‭freedom‬‭–‬‭head‬‭of‬‭BIS.‬
‭Cointelegraph‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://br.cointelegraph.com/news/cbdc-frameworks-must-guard-user-privacy-monetary-freedom-of-choice-bis‬
‭-chief‬‭>. Accessed on: March 2, 2024.‬
‭122‬
‭REVOREDO,‬ ‭Tatiana.‬ ‭Blockchain‬ ‭and‬‭consensus‬‭protocol‬‭cybersecurity.‬‭MIT‬‭Technology‬‭Review‬‭,‬‭2021.‬
‭Available‬ ‭at:‬ ‭<‬‭https://mittechreview.com.br/seguranca-cibernetica-de-blockchains-e-protocolos-de-consenso/‬‭>.‬
‭123‬
‭RIANI,‬ ‭Marlus.‬ ‭Cryptocurrencies,‬ ‭the‬ ‭metaverse‬ ‭and‬ ‭consumer‬‭rights.‬‭Legal‬‭Advisor‬‭,‬‭2022.‬‭Available‬‭at:‬
‭<‭h‬ ttps://www.conjur.com.br/2022-jun-01/garantias-consumo-criptoativos-metaverso-direito-consumidor/‬‭>.‬
‭124‬
‭ANDRADE,‬ ‭Mariana‬ ‭Dionísio‬ ‭de.‬ ‭Legal‬ ‭treatment‬ ‭of‬‭cryptocurrencies:‬‭The‬‭Dynamics‬‭of‬‭Bitcoin‬‭and‬
‭the Crime of Money Laundering‬‭. Brasilia: Brazilian‬‭Journal of Public Policies, v. 7, no. 3, 2017. p. 57.‬
‭125‬
‭EUROPEAN‬‭UNION.‬‭Directive‬‭2018/843‬‭of‬‭May‬‭30,‬‭2018.‬‭The‬‭amendment‬‭to‬‭Directive‬‭(EU)‬‭2015/849‬
‭enhances‬ ‭measures‬ ‭against‬ ‭the‬ ‭misuse‬ ‭of‬ ‭the‬ ‭financial‬ ‭system‬ ‭for‬ ‭money‬ ‭laundering‬ ‭and‬ ‭terrorist‬
‭financing,‬ ‭updating‬ ‭the‬‭earlier‬‭directives‬‭2009/138/CE‬‭e‬‭2013/36/EU‬‭.‬‭Strasbourg:‬‭Council‬‭of‬‭the‬‭European‬
‭Union,‬ ‭2018.‬ ‭Available‬ ‭at:‬ ‭<‬‭https://eur-lex.europa.eu/legal-content/PT/TXT/?uri=celex%3A32018L0843‬‭>.‬
‭26‬
‭ ser‬ ‭security‬ ‭risks‬ ‭and‬ ‭the‬ ‭potential‬ ‭to‬ ‭damage‬ ‭trust‬ ‭in‬ ‭the‬ ‭digital‬ ‭financial‬
U
‭ecosystem‬ ‭are‬ ‭central‬ ‭concerns.‬ ‭Security‬ ‭incidents‬ ‭or‬ ‭abuses‬ ‭of‬ ‭digital‬ ‭assets‬ ‭can‬
‭have‬ ‭long-lasting‬ ‭effects‬ ‭on‬ ‭consumer‬ ‭confidence‬ ‭and‬ ‭the‬ ‭adoption‬ ‭of‬ ‭emerging‬
‭financial‬ ‭technologies.‬ ‭The‬ ‭challenge‬ ‭posed‬ ‭by‬ ‭digital‬ ‭assets‬ ‭in‬ ‭circumventing‬
‭regulatory‬ ‭checks‬‭and‬‭financial‬‭sanctions‬‭is‬‭significant,‬‭complicating‬‭global‬‭initiatives‬
‭aimed at combating money laundering, financing of terrorism, and tax evasion.‬
‭Policy recommendations for Brazil‬
‭Regarding‬‭regulatory‬‭developments‬‭in‬‭Brazil,‬‭it‬‭is‬‭crucial‬‭to‬‭devise‬‭a‬‭framework‬
t‭ hat‬‭not‬‭only‬‭addresses‬‭specific‬‭market‬‭conditions‬‭but‬‭also‬‭possesses‬‭the‬‭adaptability‬
‭to‬ ‭keep‬ ‭pace‬‭with‬‭swift‬‭technological‬‭advancements.‬‭The‬‭(i)‬‭implementation‬‭of‬‭strict‬
‭Know‬‭Your‬‭Customer‬‭(YC)‬‭standards‬‭126‬ ‭e‬‭Anti-Money‬‭Laundering‬‭127‬ ‭standards‬‭emerges‬
‭as‬‭a‬‭priority,‬‭aimed‬‭at‬‭preventing‬‭illicit‬‭activities‬‭such‬‭as‬‭money‬‭laundering‬‭and‬‭terrorist‬
‭financing, as previously discussed.‬
‭ urthermore,‬ ‭consumer‬ ‭protection‬ ‭stands‬ ‭out‬ ‭as‬ ‭a‬ ‭fundamental‬ ‭pillar‬ ‭in‬ ‭the‬
F
‭regulatory‬‭framework,‬‭requiring‬‭the‬‭(ii)‬‭establishment‬‭of‬‭mechanisms‬‭that‬‭ensure‬‭the‬
‭transparency‬ ‭of‬ ‭operations‬ ‭and‬ ‭the‬ ‭proper‬ ‭communication‬‭128‬ ‭of‬ ‭risks‬ ‭inherent‬ ‭to‬
‭digital‬‭assets‬‭.‬‭In‬‭order‬‭for‬‭this‬‭foundation‬‭to‬‭be‬‭fully‬‭established,‬‭it‬‭is‬‭necessary‬‭to‬‭(iii)‬
‭creation‬ ‭of‬ ‭a‬ ‭specific‬ ‭legal‬ ‭framework‬ ‭to‬ ‭deal‬ ‭with‬ ‭fraud,‬ ‭scams,‬ ‭and‬ ‭possible‬
‭bankruptcies‬ ‭of‬‭trading‬‭platforms‬‭,‬‭thus‬‭ensuring‬‭the‬‭safeguarding‬‭of‬‭investors'‬‭rights‬
‭and‬ ‭interests.‬ ‭At‬ ‭the‬ ‭same‬ ‭time,‬ ‭it‬ ‭is‬ ‭imperative‬ ‭that‬ ‭education‬‭and‬‭awareness‬‭about‬
‭the‬ ‭benefits‬ ‭and‬ ‭risks‬ ‭129‬‭associated‬ ‭with‬ ‭investing‬‭in‬‭digital‬‭assets‬‭are‬‭prioritized‬‭as‬‭a‬
‭vital‬ ‭strategy‬ ‭for‬ ‭both‬ ‭investors‬ ‭and‬ ‭the‬ ‭general‬ ‭public.‬ ‭Regulations‬‭must‬‭also‬‭ensure‬
‭clarity‬‭and‬‭fairness‬‭to‬‭protect‬‭end‬‭users.‬‭Therefore,‬‭regulation‬‭should‬‭(iv)‬‭prioritize‬‭the‬
‭creation‬ ‭of‬ ‭standards‬ ‭that‬‭guarantee‬‭adequate‬‭information‬‭and‬‭establish‬‭consumer‬
‭education‬ ‭programs‬ ‭about‬ ‭investments‬ ‭in‬ ‭digital‬ ‭assets,‬ ‭blockchain‬ ‭operations,‬ ‭and‬
‭the use of Drex.‬
‭126‬
‭IDWALL.‬‭Learn‬‭why‬‭Know‬‭Your‬‭Customer‬‭is‬‭so‬‭important‬‭to‬‭your‬‭business.‬‭IDWall‬‭Blog‬‭,‬‭2023.‬‭Available‬
‭at: <‬‭https://blog.idwall.co/know-your-customer-conheca-seu-cliente/‬‭>.‬‭Accessed on: January 24, 2024.‬
‭127‬
‭LUGARINHO,‬ ‭Helen.‬ ‭Money‬ ‭laundering:‬ ‭what‬ ‭are‬ ‭the‬ ‭combat‬ ‭mechanisms.‬ ‭Clickcompliance‬‭,‬ ‭2024.‬
‭Available‬ ‭at:‬ ‭<‬‭https://clickcompliance.com/lavagem-de-dinheiro-quais-sao-os-mecanismos-de-combate/‬‭>.‬
‭128‬
‭COSTA,‬‭Maria‬‭Ivanúcia‬‭Lopes‬‭da‬‭Costa.‬‭MENDES,‬‭Marcília‬‭Luzia‬‭Gomes‬‭da‬‭Costa.‬‭Advertising‬‭as‬‭a‬‭tool‬‭of‬
‭consumption:‬ ‭a‬ ‭reflection‬ ‭on‬ ‭the‬ ‭creation‬ ‭of‬ ‭needs.‬ ‭Online‬ ‭Library‬ ‭of‬‭Communication‬‭Sciences‬‭,‬‭2012,‬‭pp.‬
‭1-10.‬ ‭Available‬ ‭at:‬
‭<‬‭http://www.bocc.ubi.pt/pag/costa-mendes-a-publicidade-como-ferramenta-de-consumo.pdf‬‭>.‬ ‭Accessed‬ ‭on:‬
‭January 24, 2024.‬
‭129‬
‭EY‬ ‭AGENCY.‬ ‭Financial‬ ‭education‬ ‭focused‬ ‭on‬ ‭DeFi‬ ‭and‬ ‭crypto-assets‬ ‭should‬ ‭gain‬ ‭momentum.‬ ‭Lide‬
‭Magazine‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‭h‬ ttps://revistalide.com.br/noticias/financas-investimentos/educacao-financeira-voltada-para-defi-e-criptoativos‬
‭-deve-ganhar-impulso‬‭>. Accessed on: January 24, 2024.‬
‭27‬
‭ razil‬ ‭stands‬ ‭to‬ ‭gain‬ ‭considerably‬ ‭by‬ ‭adopting‬ ‭(v)‬ ‭regulatory‬ ‭sandboxes‬ ‭that‬
B
‭130‬
‭permit‬ ‭controlled‬ ‭experimentation‬ ‭in‬ ‭technology,‬ ‭an‬ ‭approach‬ ‭that‬ ‭has‬ ‭shown‬
‭positive‬ ‭results‬ ‭and‬ ‭is‬‭already‬‭implemented‬‭by‬‭the‬‭BCB.‬‭131‬‭The‬‭role‬‭of‬‭(vi)‬‭international‬
‭cooperation‬‭is‬‭vital,‬‭with‬‭Brazil’s‬‭active‬‭engagement‬‭in‬‭global‬‭forums‬‭and‬‭partnerships‬
‭with‬ ‭international‬ ‭regulators‬ ‭helping‬ ‭to‬ ‭align‬ ‭national‬ ‭policies‬ ‭with‬ ‭international‬ ‭best‬
‭practices, thus enhancing cross-border trade and investment opportunities.‬
‭In‬ ‭Brazil,‬ ‭the‬ ‭strategic‬ ‭goals‬ ‭for‬ ‭regulating‬ ‭digital‬ ‭assets‬ ‭are‬ ‭centered‬ ‭around‬
‭ nhancing‬‭financial‬‭stability,‬‭ensuring‬‭consumer‬‭safety,‬‭promoting‬‭financial‬‭inclusion‬
e
‭and‬ ‭education,‬ ‭and‬ ‭fostering‬ ‭technological‬ ‭innovation‬ ‭within‬ ‭the‬ ‭sector‬‭.‬ ‭These‬
‭objectives‬ ‭aim‬ ‭not‬ ‭only‬‭to‬‭ensure‬‭that‬‭the‬‭adoption‬‭and‬‭regulation‬‭of‬‭digital‬‭assets‬‭do‬
‭not‬ ‭adversely‬ ‭affect‬ ‭the‬ ‭stability‬ ‭of‬ ‭the‬ ‭Brazilian‬ ‭financial‬ ‭system,‬ ‭but‬‭also‬‭to‬‭prevent‬
‭market‬ ‭manipulation‬ ‭and‬ ‭promote‬ ‭fair‬ ‭and‬ ‭transparent‬ ‭operations.‬ ‭Moreover,‬ ‭special‬
‭attention‬ ‭should‬ ‭be‬ ‭given‬ ‭to‬ ‭the‬ ‭unique‬ ‭opportunity‬ ‭that‬ ‭digital‬ ‭asset‬ ‭technology‬
‭provides‬‭for‬‭advancements‬‭in‬‭financial‬‭inclusion‬‭,‬‭132‬‭especially‬‭in‬‭regions‬‭less‬‭served‬‭by‬
‭traditional‬ ‭financial‬ ‭services,‬ ‭while‬ ‭also‬ ‭encouraging‬ ‭the‬ ‭regulatory‬ ‭environment‬ ‭to‬
‭support‬‭the‬‭development‬‭and‬‭adoption‬‭of‬‭technological‬‭innovations‬‭in‬‭the‬‭traditional‬
‭financial sector.‬
‭Therefore,‬ ‭the‬ ‭approach‬ ‭to‬ ‭be‬ ‭adopted‬‭in‬‭implementing‬‭current‬‭legislation‬‭and‬

i‭ n‬ ‭formulating‬ ‭future‬ ‭norms‬ ‭should‬ ‭follow‬ ‭a‬ ‭regulatory‬ ‭approach‬ ‭based‬ ‭on‬ ‭(1)‬
‭Transparency‬ ‭Principles‬‭;‬ ‭(2)‬ ‭Consumer‬ ‭Protection‬ ‭;‬ ‭and‬ ‭(3)‬ ‭Promotion‬‭of‬‭Education‬
‭and‬ ‭Innovation‬‭.‬ ‭By‬ ‭adhering‬ ‭to‬ ‭these‬ ‭principles,‬ ‭Brazil‬ ‭can‬ ‭create‬ ‭a‬ ‭favorable‬
‭environment‬‭for‬‭the‬‭sustainable‬‭development‬‭of‬‭the‬‭digital‬‭assets‬‭market,‬‭in‬‭alignment‬
‭with‬ ‭both‬ ‭national‬ ‭strategic‬ ‭goals‬ ‭and‬ ‭international‬ ‭best‬ ‭practices,‬ ‭enhancing‬ ‭the‬
‭overall strength and security of the financial ecosystem.‬
‭References‬
‭ Y‬ ‭AGENCY.‬ ‭Financial‬ ‭education‬ ‭focused‬ ‭on‬ ‭DeFi‬ ‭and‬ ‭crypto-assets‬ ‭should‬ ‭gain‬‭momentum.‬
E
‭Lide‬ ‭Magazine‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‬‭https://revistalide.com.br/noticias/financas-investimentos/educacao-financeira-voltada-par‬
‭a-defi-e-criptoativos-deve-ganhar-impulso‬‭>‬
‭ MANTÉA,‬ ‭Rose.‬ ‭In‬ ‭his‬ ‭last‬ ‭year‬ ‭at‬ ‭the‬ ‭Central‬ ‭Bank,‬ ‭Campos‬ ‭Neto‬ ‭has‬ ‭the‬ ‭challenge‬ ‭of‬
A
‭resisting‬ ‭pressure‬ ‭and‬ ‭maintaining‬ ‭his‬ ‭legacy.‬ ‭People's‬ ‭Gazette‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭130‬
‭EXAME.‬ ‭Sandbox:‬ ‭How‬ ‭does‬ ‭the‬ ‭concept‬ ‭apply‬ ‭to‬ ‭cryptocurrencies?‬ ‭Exame,‬ ‭Future‬ ‭of‬ ‭Money‬‭,‬ ‭2020.‬
‭ vailable‬
A ‭at:‬
‭<‭h‬ ttps://exame.com/future-of-money/regulacao/sandbox-como-o-conceito-se-aplica-as-criptomoedas/‬‭>.‬
‭Accessed on: February 4, 2024.‬
‭131‬
‭FEBRABAN.‬ ‭BC‬ ‭defines‬ ‭rules‬ ‭for‬ ‭Regulatory‬ ‭Sandbox.‬ ‭Febraban‬ ‭Tech‬‭,‬ ‭2020.‬ ‭Available‬ ‭at:‬
‭<‬‭https://febrabantech.febraban.org.br/blog/bc-define-regras-para-sandbox-regulatorio‬‭>.‬ ‭Accessed‬ ‭on:‬ ‭February‬
‭4, 2024.‬
‭132‬
‭BINANCE.‬ ‭How‬ ‭cryptocurrencies‬ ‭amplify‬ ‭financial‬ ‭inclusion‬ ‭in‬ ‭the‬ ‭world.‬ ‭Bloomberg‬ ‭Línea,‬ ‭2023.‬
‭<‭h‬ ttps://www.bloomberglinea.com.br/2023/10/18/como-as-criptomoedas-ampliam-a-inclusao-financeira-no-mu‬
‭ndo/‬‭>. Accessed on: February 4, 2024.‬
‭28‬
‭ ‬‭https://www.gazetadopovo.com.br/economia/em-ultimo-ano-no-bc-campos-neto-tem-desa‬
<
‭fio-de-resistir-a-pressoes-e-manter-legado/‬‭>‬
‭ NDRADE,‬‭Mariana‬‭Dionísio‬‭de.‬‭Legal‬‭treatment‬‭of‬‭cryptocurrencies:‬‭The‬‭Dynamics‬‭of‬‭Bitcoin‬
A
‭and‬ ‭the‬ ‭Crime‬ ‭of‬ ‭Money‬ ‭Laundering‬‭.‬ ‭Brasilia:‬ ‭Brazilian‬ ‭Journal‬ ‭of‬ ‭Public‬ ‭Policies,‬ ‭v.‬‭7,‬‭no.‬‭3,‬
‭2017. p. 57.‬
‭ PPENDINO,‬ ‭Maximiliano‬ ‭et‬ ‭al.‬ ‭Crypto‬‭Assets‬‭and‬‭CBDCs‬‭in‬‭Latin‬‭America‬‭and‬‭the‬‭Caribbean:‬
A
‭Opportunities‬ ‭and‬ ‭Risks.‬ ‭International‬ ‭Monetary‬ ‭Fund‬ ‭Working‬ ‭Papers‬ ‭23/37‬‭,‬ ‭2023,‬ ‭p.‬ ‭10.‬
‭Available at: <‬‭https://www.elibrary.imf.org/view/journals/001/2023/037/article-A001-en.xml‬‭>‬
‭ TLANTIC‬ ‭COUNCIL.‬ ‭Cryptocurrency‬ ‭Regulation‬ ‭Tracker.‬ ‭Atlantic‬ ‭Council‬ ‭Website‬‭,‬ ‭2023.‬
A
‭<‬‭https://www.atlanticcouncil.org/programs/geoeconomics-center/cryptoregulationtracker/‬‭>‬
‭ TZORI,‬ ‭Marcella.‬ ‭Blockchain‬ ‭technology‬ ‭and‬ ‭decentralized‬ ‭governance:‬ I‭ s‬ ‭the‬ ‭state‬ ‭still‬
A
‭necessary?.‬ ‭Journal‬ ‭of‬ ‭Governance‬ ‭and‬ ‭Regulation‬‭,‬ ‭v.‬ ‭6,‬ ‭n.1,‬ ‭2017.‬ ‭p.‬ ‭45.‬ ‭Available‬ ‭at:‬
‭<‬‭https://virtusinterpress.org/IMG/pdf/10.22495_jgr_v6_i1_p5.pdf‬‭>‬
‭ AISI,‬ ‭Anna.‬ ‭Pix,‬ ‭open‬ ‭finance,‬ ‭drex‬ ‭and‬ ‭tokenization‬ ‭are‬ ‭pillars‬ ‭in‬ ‭the‬ ‭Central‬ ‭Bank's‬ ‭2024‬
B
‭agenda.‬ ‭Mobiletime‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.mobiletime.com.br/noticias/08/11/2023/pix-open-finance-drex-e-tokenizacao-s‬
‭ao-pilares-na-agenda-de-2024-do-bc/‬‭>‬
‭ ALIGA,‬ ‭Arati.‬ ‭Understanding‬ ‭blockchain‬ ‭consensus‬ ‭models.‬ ‭Persistent‬‭,‬ ‭v.‬ ‭4,‬ ‭n.‬ ‭1,‬ ‭2017.‬
B
‭<‬‭http://phd.artsedighi.com/wp-content/uploads/2017/09/WP-Understanding-Blockchain-Con‬
‭sensus-Models.pdf‬‭>‬
‭ APTISTA,‬‭Patrícia;‬‭KELLER,‬‭Clara‬‭Iglesias.‬‭Why,‬‭when,‬‭and‬‭how‬‭to‬‭regulate‬‭new‬‭technologies?‬
B
‭The‬ ‭challenges‬ ‭posed‬ ‭by‬ ‭disruptive‬ ‭innovations.‬‭Revista‬‭de‬‭Direito‬‭Administrativo‬‭(Magazine‬
‭of Administrative Law)‬‭, v. 273, pp. 123-163, 2016‬
‭ HARATHAN,‬‭Vipin.‬‭Digitizing‬‭Financial‬‭Markets:‬‭Project‬‭Aber‬‭From‬‭Saudi‬‭Arabia‬‭And‬‭The‬‭UAE‬
B
‭Addresses‬ ‭Cross‬ ‭Border‬ ‭Payments‬ ‭With‬ ‭Digital‬ ‭Currencies.‬ ‭Forbes‬ ‭Digital‬ ‭Assets‬‭,‬ ‭2020.‬
‭<‬‭https://www.forbes.com/sites/vipinbharathan/2021/12/29/digitizing-financial-markets-proje‬
‭ct-aber-from-saudi-arabia-and-the-uae-addresses-cross-border-interoperability-of-digital-cu‬
‭rrencies/?sh=6d0dd1f913dd‬‭>‬
‭ INANCE.‬ ‭How‬ ‭cryptocurrencies‬ ‭amplify‬ ‭financial‬ ‭inclusion‬ ‭in‬ ‭the‬ ‭world.‬ ‭Bloomberg‬ ‭Línea‬‭,‬
B
‭<‬‭https://www.bloomberglinea.com.br/2023/10/18/como-as-criptomoedas-ampliam-a-inclusao‬
‭-financeira-no-mundo/‬‭>‬
‭ LOCKNEWS.‬ ‭Tokenization‬ ‭and‬ ‭integration‬ ‭of‬ ‭Drex‬ ‭with‬ ‭public‬ ‭networks‬ ‭will‬ ‭be‬ ‭on‬ ‭the‬ ‭BC's‬
B
‭agenda‬ ‭in‬ ‭2024.‬ ‭FI‬ ‭Insiders‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‬‭https://finsiders.com.br/parceiros/blocknews/tokenizacao-e-integracao-do-drex-com-redes‬
‭-publicas-estarao-na-agenda-do-bc-em-2024/‬‭>‬
‭ RAZIL.‬ ‭Central‬ ‭Bank‬ ‭of‬ ‭Brazil.‬‭Public‬‭Consultation‬‭Notice‬‭No.‬‭97/2023,‬‭dated‬‭December‬‭14,‬
B
‭2023‬ ‭(No.‬ ‭97/2023)‬‭.‬‭Discloses‬‭a‬‭public‬‭consultation‬‭in‬‭the‬‭form‬‭of‬‭a‬‭public‬‭subsidy‬‭collection,‬
‭aiming‬‭to‬‭gather‬‭contributions‬‭and‬‭information‬‭for‬‭the‬‭drafting,‬‭by‬‭the‬‭Central‬‭Bank‬‭of‬‭Brazil,‬‭of‬
‭regulations‬ ‭concerning‬ ‭virtual‬ ‭assets‬ ‭as‬ ‭referred‬ ‭to‬ ‭in‬ ‭Law‬ ‭No.‬ ‭14.478,‬ ‭dated‬ ‭December‬ ‭21,‬
‭<‬‭https://www3.bcb.gov.br/audpub/DetalharAudienciaPage?4&audienciaId=581‬‭>‬
‭29‬
‭ RAZIL.‬ ‭Central‬ ‭Bank‬ ‭of‬ ‭Brazil.‬ ‭Launch‬ ‭of‬ ‭DREX.‬ ‭BCB‬ ‭website‬‭,‬ ‭2024.‬ ‭Available‬ ‭at:‬
B
‭<‬‭https://www.bcb.gov.br/meubc/faqs/p/lancamento-do-drex‬‭>‬
‭ RAZIL.‬‭House‬‭of‬‭Representatives.‬‭PL‬‭2987/2023‬‭of‬‭June‬‭12,‬‭2023.‬‭Amends‬‭Law‬‭No.‬‭12,527,‬‭of‬
B
‭November‬ ‭18,‬ ‭2011,‬ ‭to‬‭ensure‬‭the‬‭immutability,‬‭auditability,‬‭and‬‭information‬‭security.‬‭Available‬
‭at:‬
‭<‬‭https://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=2368363&fich‬
‭aAmigavel=nao‬‭>‬
‭ RAZIL.‬ ‭House‬ ‭of‬ ‭Representatives.‬ ‭Bill‬ ‭4476/2023‬ ‭of‬ ‭September‬ ‭14,‬ ‭2023‬‭.‬ ‭Defines‬ ‭social‬
B
‭currencies‬ ‭and‬ ‭regulates‬ ‭their‬ ‭issuance‬ ‭and‬ ‭transactions‬ ‭through‬ ‭distributed‬ ‭ledger‬
‭technology.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=2368363&fich‬
‭aAmigavel=nao‬‭>‬
‭ RAZIL.‬ ‭House‬ ‭of‬ ‭Representatives.‬ ‭Bill‬ ‭936/2023‬ ‭from‬ ‭March‬ ‭07,‬ ‭2023‬‭.‬ ‭Adds‬ ‭articles‬ ‭3º-A,‬
B
‭3º-B,‬‭3º-C,‬‭3º-D,‬‭and‬‭3º-E‬‭to‬‭Law‬‭No.‬‭11.685,‬‭dated‬‭June‬‭2,‬‭2008,‬‭which‬‭establishes‬‭the‬‭Statute‬
‭of‬‭the‬‭Miner,‬‭and‬‭provides‬‭other‬‭measures;‬‭amends‬‭Article‬‭38‬‭of‬‭Law‬‭No.‬‭12.844,‬‭dated‬‭July‬‭19,‬
‭2013,‬‭and‬‭Article‬‭3‬‭of‬‭Law‬‭No.‬‭7.766,‬‭dated‬‭May‬‭11,‬‭1989,‬‭to‬‭adopt‬‭measures‬‭to‬‭combat‬‭illegal‬‭gold‬
‭mining‬ ‭and‬ ‭trading‬ ‭in‬ ‭Brazil,‬ ‭and‬ ‭provides‬ ‭other‬ ‭measures.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.camara.leg.br/proposicoesWeb/fichadetramitacao/?idProposicao=2350369‬‭>‬
‭ RAZIL.‬ ‭House‬ ‭of‬ ‭Representatives.‬ ‭The‬ ‭Central‬ ‭Bank‬ ‭expects‬ ‭to‬ ‭complete‬ ‭regulation‬ ‭of‬ ‭the‬
B
‭cryptocurrency‬ ‭market‬ ‭by‬ ‭mid-2024.‬ ‭Agência‬ ‭Câmara‬ ‭de‬ ‭Notícias‬‭,‬ ‭2023.‬ ‭Available‬ ‭at:‬
‭<‬‭https://www.camara.leg.br/noticias/993729-banco-central-espera-concluir-regulacao-do-m‬
‭ercado-de-criptomoedas-ate-meados-de-2024/‬‭>‬
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S
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‭35‬

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BEST REGULATORY 2024

Best Regulatory Practices for Digital Assets,

A Comparative Analysis and Recommendations

Laboratory of Public Policy and Internet

Our initiatives include: (i) investigating, analyzing, and elucidating the

These objectives are pursued through our commitment to interdisciplinary

To learn more about what we do, please check our website:

BEST REGULATORY PRACTICES FOR DIGITAL ASSETS, BLOCKCHAIN, AND CBDCS 3

‭Within‬ ‭the‬ ‭fast-changing‬ ‭global‬ ‭economic‬ ‭landscape,‬ ‭digital‬ ‭assets‬‭have‬‭risen‬

‭There are‬‭two definitions for digital assets‬‭: narrow and broad.‬‭1‬

‭ espite‬ ‭their‬ ‭genesis‬ ‭in‬ ‭cryptocurrency‬ ‭and‬ ‭blockchain‬ ‭innovations,‬ ‭CBDCs‬

‭The‬ ‭methodology‬ ‭employed‬ ‭centered‬ ‭on‬ ‭identifying‬ ‭guidelines‬ ‭that‬ ‭govern‬

‭ espite‬ ‭obstacles‬ ‭in‬ ‭aligning‬ ‭diverse‬ ‭stakeholder‬ ‭interests‬ ‭and‬ ‭establishing‬

‭Within‬ ‭this‬ ‭framework‬ ‭of‬ ‭innovation,‬‭Drex‬‭stands‬‭out‬‭as‬‭a‬‭pivotal‬‭development,‬

‭ he‬ ‭enthusiasm‬ ‭among‬ ‭policymakers‬‭for‬‭Brazil’s‬‭new‬‭digital‬‭currency,‬‭the‬‭Drex,‬

‭ he‬ ‭United‬ ‭States‬ ‭of‬ ‭America‬‭(USA)‬‭does‬‭not‬‭have‬‭specific‬‭federal‬‭regulations‬

‭ ince‬ ‭March‬ ‭2018,‬ ‭the‬‭Mexican's‬‭Fintech‬‭Law,‬‭the‬‭Ley‬‭Fintech‬‭,‬‭has‬‭been‬‭pivotal‬

I‭ n‬ ‭2020,‬ ‭The‬ ‭Bahamas‬ ‭became‬ ‭one‬ ‭of‬‭the‬‭first‬‭in‬‭the‬‭world‬‭to‬‭pioneer‬‭a‬‭CBDC‬

‭ hile‬ ‭Australia‬ ‭lacks‬ ‭specific‬ ‭regulations‬‭,‬ ‭the‬ ‭Australian‬ ‭Securities‬ ‭and‬

‭ ecently,‬ ‭the‬ ‭EU‬ ‭regulation‬ ‭on‬ ‭crypto-asset‬‭markets,‬‭also‬‭known‬‭as‬‭Markets‬‭in‬

I‭ n‬ ‭Turkey‬‭,‬ ‭the‬ ‭regulatory‬ ‭stance‬ ‭toward‬ ‭crypto‬ ‭-assets‬ ‭is‬ ‭marked‬‭by‬‭caution‬‭,‬

‭ he‬ ‭Central‬ ‭Bank‬ ‭of‬‭the‬‭Republic‬‭of‬‭Turkey‬‭(CBRT)‬‭implemented‬‭the‬‭Regulation‬

‭ he‬ ‭World‬ ‭Economic‬ ‭Forum's‬ ‭Global‬ ‭Future‬ ‭Council‬ ‭on‬ ‭Cryptocurrencies‬

‭Fonte:‬‭Atlantic Council‬‭(2023) (adaptation).‬‭118‬

‭ onsequently,‬ ‭the‬ ‭international‬ ‭regulatory‬ ‭landscape‬ ‭for‬ ‭crypto‬ ‭assets‬ ‭is‬

‭ urthermore,‬ ‭Saudi‬ ‭Arabia‬ ‭enforces‬ ‭a‬‭conservative‬‭policy‬‭towards‬‭CBDCs.‬‭The‬

‭This‬ ‭overview‬ ‭of‬ ‭regional‬ ‭strategies‬‭concerning‬‭CBDCs‬‭portrays‬‭a‬‭multifaceted‬

‭Challenges and Risks‬

‭Governing‬ ‭digital‬ ‭assets‬ ‭and‬‭blockchain‬‭technology‬‭involves‬‭distinct‬‭challenges‬

‭ eveloping‬ ‭regulations‬ ‭and‬ ‭standards‬ ‭that‬ ‭emphasize‬ ‭cybersecurity‬ ‭is‬

‭Policy recommendations for Brazil‬

‭Therefore,‬ ‭the‬ ‭approach‬ ‭to‬ ‭be‬ ‭adopted‬‭in‬‭implementing‬‭current‬‭legislation‬‭and‬

‭ RAZIL.‬ ‭National‬ ‭Congress.‬ ‭Projects‬ ‭and‬ ‭Legislative‬ ‭Materials‬‭-‬‭Propositions‬‭section.‬‭Senate‬

‭ HEUNG,‬ ‭Adrian;‬ ‭ROCA,‬ ‭Eduardo;‬ ‭SU,‬‭Jen-Je.‬‭Crypto-currency‬‭bubbles:‬‭an‬‭application‬‭of‬‭the‬

‭ RYPTO‬ ‭ID.‬ ‭Why‬‭does‬‭the‬‭idea‬‭of‬‭Drex‬‭go‬‭beyond‬‭a‬‭digital‬‭currency?‬‭Crypto‬‭ID‬‭Website‬‭,‬‭2023.‬

‭ E‬‭L A‬‭HORRA,‬‭Luis‬‭P.;‬‭DE‬‭L A‬‭FUENTE,‬‭Gabriel;‬‭PEROTE,‬‭Javier.‬‭The‬‭drivers‬‭of‬‭Bitcoin‬‭demand:‬

‭ NITED STATES OF AMERICA. Application of the Securities and Mutual Fund‬

‭ OVERNMENT‬ ‭OF‬ ‭DUBAI.‬ ‭Virtual‬ ‭Assets‬ ‭Regulatory‬ ‭Authority.‬‭VARA‬‭Website‬‭,‬‭2024.‬‭Available‬

‭ TATISTA.‬ ‭Bitcoin‬ ‭(BTC),‬ ‭Ethereum‬ ‭(ETH)‬ ‭dominance—their‬ ‭market‬ ‭cap‬ ‭relative‬‭to‬‭the‬‭market‬

‭ ALDERRAMA,‬ ‭Carlos;‬ ‭BETANCOURT,‬ ‭Arturo.‬ ‭Blockchain‬ ‭&‬ ‭Cryptocurrency‬ ‭Laws‬ ‭and‬

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