Weekly FinTech Highlights

Weekly FinTech Highlights

This weeks #FinTech Highlights shed light on the following.

1. Who is Who in the world of #tokenisation, with many mentions from Switzerland.
2. How to harness the power of #Blockchain.
3. A european perspective on systemic implications of #crypto markets and options on how to address the risks stemming from crypto-assets and decentralised finance (#DeFi).
4. State of compliance with Crypto Travel Rule.
5. Pathways to the regulation of Crypto (WEF).
6. Taxation of #Stablecoins (IMF).
7. Exciting personal news about taking up a new role.
8. An opportunity to learn with the Chartered Blockchain Analyst (CBA).

#Tokenisation Who is Who by The Tokenizer

A list of companies involved into tokenisation. I am especially pleased to spot several companies based in Switzerland 🇨🇭, such as Sygnum Bank and SEBA Bank AG world‘s first crypto banks, digital exchanges SIX Digital Exchange (SDX), custodians and more with Metaco, Taurus SA, Bitcoin Suisse AG, Custodigit, Aktionariat AG, blockimmo, Mt Pelerin, Tokengate, Valour. There are more in our little country, check out #Cryptovalley.

Harness the power of #Blockchain by Agile Dynamics LLC

Topics: Security Token, #DeFi, Tokenisation, Blockchain as a Service, and much more. #Blockchain has the power to change how people live across the globe, especially in growth markets. Only time will tell how blockchain will evolve, but all indicates that changes are needed and welcome. While it may be ambiguous how blockchain will change the status quo, we can predict how some industries will be affected.

Author/Contributor: Ivan Bjelajac, Emilija Vukovic, Paul Lalovich, Vladimir Lelicanin, Petar Atanasovski, Vuksan Simunović, Yasser N Alobaidan, Jonathan Emmanuel, Edward Bodmer, Philipp Kishkovarov, Olayimika Oyebanji, Soheil Zabihi, Ramzi Khoury, Franklin Peters (FIMS), George Petrovic.

#Crypto-assets and decentralised finance #DeFi by European Systemic Risk Board (ESRB)

The report outlines systemic implications of #crypto markets and proposing policy options to address the risks stemming from crypto-assets and decentralised finance (#DeFi). The report finds that while this past year has been turbulent for cryptos and DeFi, the impact on the financial system was limited. However, given the exponential growth and high volatility of #crypto, they need to be closely monitored as they may come to pose systemic risks. To better understand developments in #crypto-assets and their potential financial stability implications, the report proposes a number of policy options.

1. EU’s capacity to monitor potential contagion channels should be improved.

2. report considers policy options to address risks arising from crypto conglomerates, crypto-based leverage, novel operational challenges, #DeFi and crypto staking and lending.

State of #Crypto Travel Rule by Notabene

This report presents an in-depth analysis of the current state of compliance with the Financial Action Task Force (FATF) Recommendation 16, known as the ‘Travel Rule’ regulation. 2023 is the year of #TravelRule compliance. Travel Rule compliance is becoming increasingly global. Survey responses reveal confusion around what constitutes ‘full compliance.’ Transactions with self-hosted wallets are under scrutiny. A lack of technical resources is the main hindrance to Travel Rule adoption. #VASP tend to take a phased approach to compliance with Travel Rule obligations. Author/Contributor: Pelle Brændgaard

Pathways to the Regulation of #Crypto-Assets by World Economic Forum

Coordinating regulatory frameworks across jurisdictions is a complex task for almost any sector. With #crypto-assets, global coordination is not just desirable but necessary. There exists a broad spectrum of views, especially as there are multiple stakeholders at varying levels of maturity, and the need for a global approach is warranted due to:

1. borderless nature of technology

as the crypto-asset ecosystem moves across the spectrum from centralized to decentralized, the intricacies in identifying the “who”, “where” and “whom” also become markedly difficult.

2. potential of interconnectedness DeFi - TradFi

events in 2022 have evidenced that the DeFi environment is highly interconnected, meaning that fragmented regulatory regimes will create challenges for ensuring uniform consumer protections or market integrity efforts. As the potential for connectedness with the TradFi system is examined, the need for a collaborative approach is even more pronounced.

While the global approach is an ideal pathway, there are various barriers that impede this:

1. Lack of harmonized taxonomies/classification

different jurisdictions define and categorize crypto-assets in various buckets, creating ambiguity in understanding the risks posed as well as a lack of clarity for market participants.

2. Regulatory arbitrage:

as different jurisdictions evolve their respective regulatory frameworks, this hampers effective oversight and development of the ecosystem.

3. Fragmented monitoring, supervision and enforcement:

lack of coordination among various law-enforcement agencies leads to inconsistent enforcement and lack of coherence in regulatory approaches.

Over the past few years, various international standard-setting bodies and organizations have made considerable efforts to produce evidence based research as well as high-level frameworks to evolve a global approach.

Amid this, some countries have also chosen to focus on certain key aspects of the ecosystem, often with the objective of ensuring consumer protection, prevention of illicit financing and financial stability, but taking varied approaches.

This paper discusses jurisdiction examples of regulatory approaches such as principle-based, risk-based, agile regulation, self and co-regulation and finally, regulation by enforcement.

To ensure a broad and global view of this topic, diverse stakeholders of the Digital Currency Governance Consortium were consulted.

Interestingly, recommendations appreciate that distinct opportunities and risks presented by crypto-assets will also need an innovative approach, while building on lessons learned and best practices developed in other sectors.

Author/Contributor: Arushi Goel, Matthew Blake, Claire B., Shawn Dej, Purushottam Kaushik, Brynly Llyr, Drew Propson, Sandra Waliczek, Daniel Gabriel, Sarah Hammer, Ashlin Perumall, Akash Daryanani, Diana Barrero Zalles

#FinTech note - Taxing #Stablecoin by International Monetary Fund

This Fintech Note specifically considers the challenges that tax law systems face to achieve neutrality in taxing transactions in one specific type of crypto asset: stablecoins.

#Stablecoin are a category of #crypto assets that aim to maintain a stable value relative to a specified asset or to a pool of assets, such as sovereign currencies.

#Stablecoin are grouped in the paper as: backed, unbacked oder hybrid.

In this way, they are designed to address the problem of volatility in the prices of #crypto asset, which makes them poor candidates as store of value and among the main impediments against general adoption as a means of payment.

VAT for Stablecoin

Most VAT systems do not separately tax the supply of money when it is given in payment for a supply of goods or services, and they typically achieve such an outcome by (usually implicitly) deeming such a supply of money as “out of scope” or explicitly excluding it from the definition of “supply.”

Income Tax and Stablecoin

A straightforward supply of money in exchange for goods or services does not constitute a separate transaction giving rise to a separate gain or loss calculation for income tax purposes, provided that the money is used as a medium of exchange and means of payment.

For stablecoins to be able to fulfill their potential of becoming a convenient alternative means of payment—including cross-border payment—both taxpayers and tax administrations will need certainty and predictability about the tax treatment of transactions and activities involving stablecoins.

Author/Contributor: Christophe Waerzeggers; Irving Aw; Jess Cheng

Exciting news! I started a new position

as Director with Sielva Management SA and I am thrilled to embark on this new journey.

Proud to earn the Chartered #Blockchain Analyst Level 1 badge (CBA® I) 

This digital charterholder program from the DEC Institute is peculiar, since:

1️⃣ It is focused on a 1-hour examination, which can be taken in any Pearson VUE test center worldwide

2️⃣ Preparation is designed as self-learning and studying, both through their Study Booklet and a MOOC on edX https://lnkd.in/eNP7bp2R

3️⃣ the program has a fail rate of about 45-50% of candidates

4️⃣ the program is multidisciplinary, requiring analytical skills from a technology, business & economics, and legal & regulatory standpoint

DEC Institute claims some of the notable achievements of a CBA certification holder include:

• Proficiency in #blockchain fundamentals, including cryptography, smart contracts, technology stacks, and privacy.
• Ability to interpret decentralized applications (dApps) and token economics.
• Familiarity with major global regulatory developments and important legal considerations.
• Knowledge of major learnings from the past decade and emerging best practices.

DEC Institute also provides a refer-a-friend program to all charter holder: DECAlumni_SilvanAndermatt_15%