It is no secret that over the past decade or more, governments worldwide have struggled to stay abreast of the developments permeating the crypto industry. This is largely because the decentralized nature of crypto tech presents a number of significant challenges — such as those pertaining to anonymity, transparency, etc — resulting in several nations adopting a highly cautious approach to the industry.
For instance, in 2017, China — the second-largest economy in the world — banned initial coin offerings (ICO). This was followed by a blanket ban on digital asset trading, resulting in a significant market downturn. That said, as the market matured over the next couple of years, the eastern powerhouse, alongside several other nations, recognized the need to establish clear regulatory frameworks. Consequently, in 2020, China somewhat relaxed its anti-digital asset stance by introducing a pilot program for a state-backed digital currency (called the ‘digital yuan’).
Similarly, in 2018, the Reserve Bank of India (RBI) banned banks and other regulated entities from dealing with cryptocurrencies or providing services to businesses engaged in crypto-related activities. However, the Supreme Court overturned this ban in 2020, paving the way for a more open regulatory environment. In 2022, the Indian government introduced a flat 30% tax on income from crypto transactions, signaling a move towards legitimizing and regulating the industry.
How Web3 Companies Can Assist Regulators
While some countries have implemented traditional regulatory methods for overseeing their local crypto industries — such as anti-money laundering (AML) and know-your-customer (KYC) — there are others that have taken more innovative approaches. For example, a few years ago, the United Arab Emirates (UAE) established the Virtual Assets Regulatory Authority (VARA) to regulate all virtual assets, including cryptocurrencies. VARA issues licenses sparingly, thus creating a conducive environment for businesses while ensuring consumer protection and preventing financial crimes.
Similarly, the Monetary Authority of Singapore (MAS) implemented the Payment Services Act back in 2019, providing investors with a regulatory framework for digital payment token services, including crypto exchanges, wallets, and token issuers. The act requires these entities to obtain a license and comply with a host of curated AML/CFT (anti-money laundering and countering the financing of terrorism) requirements, as well as other measures to protect consumers.
In this context, Web3 companies, particularly those with significant experience in traditional finance (TradFi), can play a crucial role in assisting governments in developing comprehensive and effective regulations for the crypto industry. One such company is the MultiBank Group, a well-established financial derivatives institution possessing over 14 licenses worldwide—including those issued by ASIC, AUSTRAC, and BAFIN—while boasting an average daily trading volume of $12.1 billion.
MultiBank Group has recently expanded into the crypto sphere with the launch of MultiBank.io, a pioneering Crypto Spot and Multi-asset Derivatives Exchange. Leveraging its extensive experience in navigating complex regulatory landscapes, MultiBank Group is uniquely positioned to provide valuable insights and collaborate with regulators to create a secure and transparent trading environment for digital assets.
MultiBank.io offers a comprehensive financial ecosystem that seamlessly unites traditional derivatives with crypto offerings. It provides access to a wide range of products, including forex, shares, metals, indices, commodities, and crypto CFDs, all while adhering to stringent regulatory standards and ensuring transparency for its clients.
The Future Will Be Regulated
As the crypto industry continues to gain mainstream adoption, it becomes increasingly evident that a well-regulated environment is essential for its long-term success. Regulations not only protect consumers and prevent financial crimes but also provide businesses with a clear framework to operate within, fostering trust and confidence in the industry.
Web3 companies that prioritize regulatory compliance and transparency can serve as valuable partners for governments in shaping the future of crypto regulations. By leveraging their expertise and experience, these companies can help bridge the gap between traditional finance and the emerging world of digital assets, ensuring that regulations strike the right balance between innovation and consumer protection.
Thus, as the industry evolves, it will be interesting to witness the collaboration between regulators and Web3 companies in creating a sustainable and thriving crypto ecosystem. Companies like MultiBank Group, with their commitment to regulatory compliance and user-centric solutions, are well-positioned to contribute to this process, ultimately shaping a future where crypto is accessible, secure, and widely adopted.