The US SEC wants to regulate DEFI, but El Salvador’s Bitcoin is still an option

On August 20th, the staff of the US Securities and Exchange Commission (SEC) stated that peer-to-peer networks are completely unregulated in the United States, and this situation may change in the future. The decentralized financial project called DeFi seems to have the characteristics of the type of entity subject to SEC supervision. Any project that rewards participants with valuable digital tokens or similar incentives may enter the jurisdiction of regulatory agencies.

The US SEC wants to regulate DEFI, but El Salvador's Bitcoin is still an option

Analysts believe that the US SEC’s desire to regulate DEFI will likely cause continued panic in the market. At the same time, there is reason to believe that the US SEC will follow the enactment of a tax bill on cryptocurrency transactions to do the same with DEFI. In the long run, this is the only way for the entire blockchain market to move towards compliance, but as far as the current situation is concerned, market panic may cause a short-term decline in market transaction volume.

On August 20th, the Central Bank of El Salvador recently issued two drafts to guide banks and financial institutions on how to provide BTC- related services to customers . The draft entitled “Digital Wallet Platform Bitcoin and U.S. Dollar Authorization Operation Guide” stipulates that starting from September 7th, BTC will be officially adopted as a legal currency.

In the draft “Technical Standards for Promoting the Application of Bitcoin Law”, the El Salvador Central Bank pointed out that financial entities must apply to the central bank to provide digital wallets. The application must specify the type of product provided, including details of the target market, risk assessment, charges to customers, education regulations for customers, and complaint procedures.

ZB Research Institute believes that although the Central Bank of El Salvador’s certification of customers is applicable to encrypted wallets, based on the comprehensive anti-money laundering measures that are being implemented in various countries, it is possible for El Salvador to monitor and analyze bitcoin transactions. In the two-way exchange of Bitcoin and U.S. dollars, banks will inevitably intervene in charging fees.

As the first application of decentralization-Bitcoin, whether users are willing to accept the intervention of intermediaries is still unknown. According to the information obtained by ZB Research Institute from the two draft bills, the bill requires banks or financial institutions to warn customers that the price of Bitcoin is unstable and transactions cannot be reversed. If you lose your private key, you will lose your Bitcoin. Analysts believe that El Salvador’s move will lose the trust of some cryptocurrency investors in the absence of exchange rates and regulations on the exchange of cryptocurrency to legal tender.

Earlier, El Salvador’s Minister of Finance, Alejandro Zelaya (Alejandro Zelaya) stated that the use of Bitcoin and digital wallets in El Salvador would be “completely optional” and companies that do not accept cryptocurrencies will not be sanctioned.

The ZB Research Institute believes that although El Salvador has abandoned its plan to use Bitcoin as legal tender due to international pressure, it can still see the country’s government’s efforts in the legalization of cryptocurrencies. Perhaps El Salvador is legal in Bitcoin. A new path that can integrate the characteristics of both parties is being sought between the time of globalization and the time when the US dollar is in line with international standards. From this perspective, El Salvador’s relevant draft bill also opens up another path for the global cryptocurrency market.

On August 20, Moody’s analyst Zedric Cheung and others said in a report on Thursday that digital payment tools operated by Tencent and Ant Group have become so popular that China has basically become a cashless society. The dominance of technology platforms has created a squeezing effect on banks, such as causing more customers to transfer bank deposits to money market funds operated by the platform.

ZB Research Institute believes that the introduction of digital renminbi is expected to improve the payment competitiveness of banks, enhance the bank’s position in the payment system, enhance data collection capabilities, and expand the user base. At the same time, it also expressed the concern of relevant departments about the centralized control of data by technology companies. In the future, technologies such as big data may gradually be returned to the government.

On August 20th, Vachira Arromdee, deputy governor of the Bank of Thailand, stated that the Bank of Thailand plans to test retail central bank digital currencies in the second quarter of 2022 as an alternative payment option. The pilot project will evaluate the use of CBDC in limited-scale cash-based activities, such as receiving, converting, or paying for goods and services.

On August 20th, the governor of the Bank of Indonesia stated that the central bank will launch a blockchain-based digital rupiah. Previously, the ZB Research Institute had made relevant comments on the Bank of Indonesia’s research on central bank digital currency (CBDC) or digital dong coins.

On August 20th, Russian President Vladimir Putin signed a decree, approving the country’s national anti-corruption plan for 2021-2024. ZB Research Institute was informed that in the plan, Putin instructs the Ministry of Finance, the Ministry of Labor, the Ministry of Digital Development, and the Central Bank to submit plans for encrypted assets and currencies declared by verification officials to ensure the accuracy and completeness of relevant data.

ZB Research Institute believes that the legalization of digital currencies around the world is undergoing fierce integration, and this integration will inevitably cause market unease, so market fluctuations in the short term are inevitable. In the long run, the future of encrypted assets is still on an upward trend. Regardless of whether the policy supports taxation or supervision of encrypted assets, it is impossible for cryptocurrencies to be driven by policies to disappear completely or fully comply with government policies. Related to the original intention of encrypted assets.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-us-sec-wants-to-regulate-defi-but-el-salvadors-bitcoin-is-still-an-option/
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