Clifford Chance

Welcome to this month's global crypto round-up, summarising crypto regulatory developments that have happened around the world in October 2024 along with our Clifford Chance crypto publications and upcoming events. 

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

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CLIFFORD CHANCE PUBLICATIONS & MATERIALS

Cryptoassets service providers: Navigating your EU regulated status

The Markets in Cryptoassets Regulation (MiCA) delivers a new EU-wide regulatory framework for issuing, intermediating and dealing in cryptoassets. Under MiCA, cryptoasset service providers (CASPs) must be authorised, comply with conduct, disclosure, governance and organisational requirements and have prudential safeguards in place.

In this briefing we take a closer look at some of the wider EU regulatory requirements that will attach to some CASPs for the first time, and to existing service providers more broadly, as EU-regulated entities.

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

INTERNATIONAL

• (27 Nov 2024) The Basel Committee on Banking Supervision (BCBS) has finalised various technical amendments to the Basel Framework, including a technical amendment on cryptoasset exposures, which will be implemented from 1 January 2026 as part of the final cryptoasset exposures standard.
• (19 Nov 2024) The International Organization of Securities Commissions (IOSCO) has launched a new roadmap to enhance retail investor online safety. The roadmap consists of five waves of targeted actions planned over twelve months. IOSCO has published three consultation reports under the first wave which focus on: (i) finfluencers and the risk they pose by potentially spreading biased information and promoting high-risk products without adequate conflict of interest disclosures; (ii) copy trading, a popular approach often focused on short-term strategies in complex and volatile markets which exposes retail investors to significant risks through automated, high-risk trading decisions; and (iii) digital engagement practices (DEPs), such as gamification and targeted prompts which make investing more accessible and engaging, particularly for younger investors. | Deadline for comments: 20 January 2025. | Press release
• (18 Nov 2024) Financial Stability Board (FSB) annual report, which describes the FSB’s work to promote global financial stability. The report is accompanied by a letter from FSB Chair Klaas Knot to G20 Leaders ahead of their Summit in Rio de Janeiro on 18-19 November. The letter calls for the continued, full, consistent, and timely implementation of agreed-upon financial regulatory reforms. Amongst other things, it also sets out policy efforts aimed at mitigating risks associated with digitalisation. | Press release
• (8 Nov 2024) International Monetary Fund (IMF) policy paper on progress and further considerations on central bank digital currency (CBDC). The paper covers the positioning of CBDC in the payments landscape, cyber resilience of the CBDC ecosystem, CBDC adoption, CBDC data use and privacy protection, implications for monetary policy operations, and cross-border payments with retail CBDC. | Webpage

AFRICA

Morocco:

• (26 Nov 2024) Speech by Moroccan Central Bank Governor Abdellatif Jouahri, in which he indicated that the Bank has prepared a draft law regulating cryptoassets, which is currently in the adoption process.

AMERICAS

US:  

• (26 Nov 2024) Office of Financial Research (OFR) paper on crypto exposure and household financial conditions, which provides an overview of the potential for systemic financial risks to arise from changes in household balance sheets due to crypto exposure.
• (21 Nov 2024) The Commodity Futures Trading Commission (CFTC)’s Global Markets Advisory Committee has advanced a recommendation to expand the use of non-cash collateral through the use of distributed ledger technology (DLT). The recommendation provides a legal and regulatory framework for how market participants can apply their existing policies, procedures, practices, and processes to support use of DLT for non-cash collateral in a manner consistent with margin requirements. | Press release
• (21 Nov 2024) Federal Reserve Bank of New York (FRBNY) Economic Policy Review article on the financial stability implications of digital assets. | Webpage
• (12 Nov 2024) Federal Deposit Insurance Corporation (FDIC) National Survey of Unbanked and Underbanked Households for 2023, which included questions about household use of crypto or digital assets to store and transfer money. In 2023, 4.8% of US households owned or used crypto or digital assets in the previous 12 months. A significant majority of these households held crypto or digital assets as an investment (92.6%) while only 4.4% used digital assets as a form of payment. | Press release

APAC

Australia:             

• (21 Nov 2024) Australian Treasury consultation seeking stakeholder views on options for the Government’s approach to implementing the Organisation for Economic Co-operation and Development (OECD)-developed rules for the cryptoasset reporting framework (CARF) and associated amendments to the common reporting standard (CRS). Deadline for comments: 24 January 2025

Singapore:             

• (4 Nov 2024) The Monetary Authority of Singapore (MAS) has announced plans to advance tokenisation in financial services, including by: (i) forming commercial networks to deepen liquidity of tokenised assets; (ii) developing an ecosystem of market infrastructures;  (iii) fostering industry frameworks for tokenised asset implementation; and (iv) enabling access to common settlement facility for tokenised assets. Two industry frameworks developed by Project Guardian industry group members and intended to facilitate the broad based acceptance and implementation of tokenised assets by financial institutions have also been published: (i) the Guardian Fixed Income Framework (GFIF), which provides an industry guide to implementing tokenisation in Debt Capital Markets, and (ii) the Guardian Funds Framework (GFF), which provides a set of recommendations for industry best practices for tokenised funds. A Clifford Chance team advised on the APAC, EU and UK aspects of the GFIF. | Press release | UK FCA statement

EUROPE

EU:  

• (29 Nov 2024) The EU Commission has adopted a Delegated Regulation setting out regulatory technical standards (RTS) under MiCA specifying the content and format of order book records for CASPs operating a trading platform for cryptoassets.
• (28 Nov 2024) Commission Implementing Regulation (EU) 2024/2902 laying down implementing technical standards (ITS) with regard to reporting related to asset-referenced tokens and to e-money tokens denominated in a currency that is not an official currency of an EU Member State under MiCA, which has been published in the Official Journal. Entry into force: 18 December 2024, with application from 1 January 2025
• (28 Nov 2024) The EU Commission has adopted a Delegated Regulation setting out RTS specifying the manner in which CASPs operating a cryptoasset trading platform are to present transparency data under MiCA.
• (26 Nov 2024) Commission Implementing Regulation (EU) 2024/2545 laying down ITS under MiCA with regard to standard forms, templates and procedures for the cooperation and exchange of information between competent authorities, which has been published in the Official Journal. Entry into force: 16 December 2024.
• (15 Nov 2024) Letter from European Central Bank (ECB) President Christine Lagarde in response to questions from Dutch MEP Auke Zijlstra (Partij voor de Vrijheid/Party for Freedom) on the digital euro and the potential costs of the project.
• (15 Nov 2024) European Supervisory Authorities (ESAs) decision on the information that competent authorities must report to them for the designation of critical ICT third-party service providers (CTPPs) under the Digital Operational Resilience Act (DORA). | Press release
• (14 Nov 2024) European Banking Authority (EBA) final report on two sets of guidelines on internal policies, procedures and controls to ensure the implementation of EU and national sanctions. The first set of guidelines is addressed to all institutions within the EBA’s supervisory remit and includes provisions that are necessary to ensure that financial institutions’ governance and risk management systems are sound and sufficient to address the risk that they might breach or evade restrictive measures. The second set of guidelines is specific to payment service providers (PSPs) and CASPs and specify what PSPs and CASPs should do to be able to comply with restrictive measures when performing transfers of funds or cryptoassets. The guidelines will apply from 30 December 2025. | Press release
• (14 Nov 2024) European Insurance and Occupational Pensions Authority (EIOPA) opinion on the scope of DORA in light of the review of the Solvency II framework. | Press releas
• (14 Nov 2024) ECB occasional paper on the impact of central bank digital currency on central bank profitability, risk-taking and capital
• (13 Nov 2024) Commission Implementing Regulation (EU) 2024/2861 laying down ITS under MiCA with regard to the technical means for the appropriate public disclosure of inside information and for delaying the public disclosure of that information, which has been published in the Official Journal. Entry into force: 3 December 2024.
• (8 Nov 2024) Clifford Chance has advised on the first issuance of digitally native notes by Caisse des dépôts et consignations completed in the context of the Eurosystem's exploratory works. The issuance of the EUR 100,000,000 3.33% digitally native notes due 7 November 2034 by Caisse des dépôts et consignations was carried out using the digital financial market infrastructure (D-FMI), the distributed ledger technology (DLT)-based component of the securities settlement system operated by Euroclear Bank, for the creation of the digitally native notes, and the Banque de France's cash distributed ledger technology (DL3S), for the cash leg of the issuance. | Press release
• (6 Nov 2024) ESAs joint guidelines on the oversight cooperation and information exchange between the ESAs and the competent authorities under DORA.
• (5 Nov 2024) Association for Financial Markets in Europe (AFME) paper setting out a proposed vision and policy recommendations on the use of DLT and tokenisation in financial markets. The paper is AFME's contribution to the EU Commission’s call for submissions on issues and opportunities relating to the deployment of DLT-based infrastructure and services in the EU.           

France:

• (6 Nov 2024) The Autorité des marchés financiers (AMF) has provided clarifications on the conditions for the intermediation of financial securities admitted to the operations of a DLT market infrastructure. | Press release (in French)

Germany:          

• (26 Nov 2024) German Federal Financial Supervisory Authority (BaFin) consultation 09/2024 (in German) on a draft Cryptomarkets Notification Ordinance. The draft Ordinance is intended to specify reporting obligations for the disclosure of inside information pursuant to section 36 of the draft Crypto Markets Supervision Act, which is currently going through the legislative process and is a national supplementary act to MiCA. Deadline for comments: 13 December 2024.

Italy:

• (26 Nov 2024) The Bank of Italy has announced its intention to comply with the EBA guidelines (EBA/GL/2024/11) on the so-called 'travel rule' under Regulation (EU) 2023/1113, which sets out the information that must accompany transfers of funds and certain cryptoassets for anti-money laundering and counter terrorist financing (AML/CTF) purposes. The guidelines will apply from 30 December 2024. | Announcement (in Italian)

UK:

• (26 Nov 2024) Financial Conduct Authority (FCA) Crypto Roadmap setting out a timeline for its planned discussion and consultation papers covering various aspects of the future regime for regulating cryptoassets, such as trading platforms, intermediation, lending, staking, stablecoins, custody, prudential requirements, conduct and firm standards, admissions and disclosures, and market abuse, as well as its intention to publish all final rules in 2026. The FCA has also published a new webpage on its expectations in relation to current rules on cryptoasset financial promotions and fiat-to-crypto on/off ramp services; (ii) a blog post summarising roundtable discussions on the future crypto regime covering admissions and disclosures, market abuse regulation, and trading platforms and intermediaries; and (iii) an analysis of cryptoassets consumer research conducted in 2024 by YouGov on behalf of the FCA. | Press release
• (21 Nov 2024) Speech by Tulip Siddiq, Economic Secretary to the Treasury, in which she discussed the UK Government's approach to tokenisation and regulation.
• (19 Nov 2024) The Special Public Bill Committee on the Property (Digital Assets etc) Bill has issued a call for evidence on the Bill. Deadline for comments: 20 December 2024. | Press release
• (18 Nov 2024) Investment Association position paper on the automation of IPOs and placing 'block trades. | Press release
• (14 Nov 2024) The Chancellor of the Exchequer, Rachel Reeves, has delivered her 2024 Mansion House speech, setting out the Government's priorities for UK financial services reforms. Amongst other things, the Government has: launched a call for evidence on a financial services growth and competitiveness strategy focusing on fintech, sustainable finance, asset management and wholesale services, insurance and reinsurance, and capital markets. Deadline for comments: 12 December 2024, with the Government intending to publish the final strategy in Spring 2025; published a National Payments Vision policy paper addressing findings from the Future of Payments Review 2023 and establishing a Payments Vision Delivery Committee to ensure coordination between regulators with the aim of identifying and minimising overlaps in initiatives; and o announced its intention to launch a pilot to deliver a Digital Gilt Instrument (DIGIT). Webpage | Press release | Written Ministerial Statement on DIGIT (dated 18 Nov 2024)
• (14 Nov 2024) UK Finance Digital Gilt Roadmap, written in conjunction with EY, which was submitted to the UK Government in April 2024 and provides a blueprint on how the UK could lead with a successful digital gilt issuance. | Webpage
• (13 Nov 2024) The Property (Digital Assets etc) Bill has had its second reading in the House of Lords and been committed to a Special Public Bill Committee. | Lords Hansard | Minutes of proceedings 

EVENTS

Global Financial Markets Perspectives Series: Outsourcing – new technologies, new regulations and new vulnerabilities (online, 10 December 2024):
New technologies, major shifts in the global regulatory landscape, and the need for digital resilience require global enterprises to fundamentally rethink their outsourcing strategies and outsourcing relationships. In this session, we will look at the key trends and developments that are shaping the future of outsourcing and the strategies that organisations can adopt to meet these new challenges. | To register, please see the event series registration form