KEY POINTS

• The IMF previously warned of growing concern over the lack of a global regulatory framework
• Europe-based crypto firms see MiCA as an 'opportunity for Europe to emerge as a leader in crypto asset regulation': Bitpace CEO Anil Oncu
• The UK's new bill seeking to recognize crypto as personal property can help legitimize the industry, he said
• Lawmakers should focus on delivering 'future-facing' policies for a fast-evolving industry: Oncu

In an industry that relies largely on the trust and confidence of users who have opened their minds to a new digital economy powered by blockchain and cryptocurrency, regulations remain uncertain, and the uncertainty has had a significant impact on broader adoption.

A 2023 report by multinational consultancy network PwC highlighted the importance of clear rules for digital assets. For crypto firms, clear regulations should help them align their business practices with the law, and for traditional financial institutions, regulations can provide them the much-needed clarity to enter the space.

In an exclusive with International Business Times, Anil Oncu, the CEO and co-founder of crypto payment gateway platform Bitpace, discussed the global regulatory environment and underscored the urgency for clear and transparent rules specifically dedicated to a burgeoning industry that has apparent potential to transform the technological age.

 

Is a Global Regulatory Framework Possible?

One of the pain points of regulation in recent years is the debate on what a global regulatory framework can do for the digital assets space. But first, is it even possible to achieve at this point?

The International Monetary Fund (IMF) said in 2022 that there is growing "worry" that the longer the world doesn't come up with a regulatory framework, "the more national authorities will get locked into differing regulatory frameworks."

For Oncu, an international regulatory framework might differ from what most expect. "With no unanimously recognized international governing body, there will be no global 'laws' that control wallets or purchases," he noted.

Notably, the world has the Financial Stability Board (FSB), which monitors the global financial system and provides recommendations. However, it is not an international governing body that can actually roll out and implement regulatory guidelines.

"The goal is to encourage jurisdiction-specific approaches that match each country's unique needs. This is why 'first mover' policies often serve as a blueprint for future approaches. Think GDPR (General Data Protection Regulation) and the data privacy standards that followed in its footsteps," Oncu said.

The GDPR is the European Union's legal framework for collecting and processing personal information, having the most stringent guidelines on privacy and security.

As was the case with GDPR, the EU is also leading the way in the race toward establishing clearer rules for crypto companies as the first phase of its Markets in Crypto Assets Regulation (MiCA) came into effect this year.

 

MiCA Not as an Innovation Blocker but an Opportunity

When the bloc first unveiled details of MiCA, there was initial outcry in the international community, especially non-EU-based companies that only expanded in the area. However, things have since changed and a growing number of crypto platforms and companies have been working toward MiCA compliance.

Oncu revealed that within the EU, MiCA has been widely accepted. "Complying with this regulation is nothing new or outlanding for any financial business in the region. For example, at Bitpace, achieving MiCA compliance early on was a natural evolution for our accreditation," he said.

He went on to note that many crypto firms within the bloc "see MiCA as an opportunity for Europe to emerge as a leader in crypto asset regulation." He cited how Circle became one of the first providers to achieve MiCA clearance, allowing the P2P payments firm to unveil the EURC stablecoin.

"This is the kind of progress regulation aims to foster, and it can set the stage for similar regulatory efforts worldwide," he said.

UK Moves Toward Clarifying Crypto's Legal Status

Following in the EU's footsteps is the United Kingdom, which, just this month, introduced a new bill that seeks to recognize Bitcoin and other cryptocurrencies as personal property. If the Property (Digital Assets etc.) Bill is passed into law, it will give digital asset holders expanded legal protection against frauds and scams.

The cynicism among non-crypto natives stems from security breaches and other instances in the sector that have raised fear of uncertainty, such as the collapse of Sam Bankman-Fried's FTX.

For Oncu, the UK's new bill can help legitimize the industry. It will also make crypto investments more attractive to retail and institutional users alike, since such recognition adds another layer of security.

While some may view any new regulation as a form of government interference, Oncu believes that Britain is "likely aiming for a mutually beneficial legal environment where crypto adoption can progress without risking individual privacy or financial security."