Regulatory Roundup: June's Digital Market Developments So Far...

Here's a quick recap of the key developments that have shaped the regulatory landscape in the first half of June:

Europe Leads the Charge in Digital Asset Regulation

• MiCA in Progress: The EU continues to flesh out the Markets in Crypto Assets Regulation (MiCA), releasing draft technical standards on conflicts of interest, delegated regulations on asset classifications, and guidance on remuneration policy. This comprehensive regulatory framework aims to establish clear rules for the crypto industry within the EU.

• DORA Bolsters Digital Resilience: The Digital Operational Resilience Act (DORA) takes a step forward with new delegated regulations on critical ICT third-party service providers and oversight fees. The ECB also chimes in with guidance on cloud outsourcing, emphasising the importance of secure and resilient digital infrastructure.

• Financial Crime in the Spotlight: The fight against economic crime continues with the adoption of a new package of anti-money laundering rules.

Global Regulatory Trends

• United Kingdom: There has been a focus on digital assets' legal aspects, exploring governing law and jurisdiction issues, and new guidance on NFTs in advertising.

• Asia: Hong Kong leads discussions on innovation, resilience, and the role of AI in finance. India releases its monthly financial bulletin, Japan advances its CBDC pilot, Thailand tests its retail CBDC, and Singapore emphasises data governance.

• United States: Explores the potential of tokenising real-world assets and releases a report on illicit finance risks associated with NFTs.

• International: The IMF examines cross-border payments with retail CBDCs, IOSCO addresses market outages, Interpol releases a global financial fraud assessment, and the BCBS delves into fintech's impact on banking competition.

Key Takeaways

• Digital Assets Take Center Stage: The surge in regulatory activity around digital assets reflects their growing importance in the global economy. MiCA's development in the EU is a landmark effort to bring clarity and oversight to this rapidly evolving space.

• Operational Resilience is Paramount: As financial systems increasingly rely on digital infrastructure, ensuring operational resilience is crucial. DORA and the ECB's guidance aim to strengthen the security and stability of these systems.

• Global Collaboration on Financial Crime: The fight against financial crime continues to be an international effort, with regulators working together to address emerging threats like those associated with NFTs.

What's Next?

The regulatory landscape is constantly evolving, and these developments are just the tip of the iceberg. Financial institutions and businesses operating in the digital space must stay vigilant and adapt to these changes to ensure compliance and mitigate risks.