Understanding The Global Regulatory Framework For Cryptoassets: The Globalists’ Approach
We live in a world regulated by politicians, with laws designed by a global elite, which seeks control over the destinies of our planet.
Although this initial paragraph may seem like it, this article does not intend to narrate government conspiracy theories, but rather a look at documents and publications, seeking to understand the direction of regulations for the crypto industry.
Understanding the regulations facing the crypto industry is key to deciding your investments, and how they will affect the utility proposed by each blockchain ecosystem, even more so in some countries with more state interference in business than others.
The global regulatory framework is important, to then understand local regulations, where the design of economic policy is one of the main interests of globalists.
I wrote an article a couple of years ago about the regulations and their general framework. I leave it at the end (1) and another, more recent, on the classification of tokens within the legal framework (2).
Iron Fist Wrapped In Velvet Glove
Given the global and borderless characteristic of the crypto industry, globalists know the challenge of establishing identical laws in all jurisdictions, both for issues in the local power struggle and for social issues, and that is why they present their proposals based on principles, establishing the general principles for the expected results.
There are different regulatory models, where the best known is ‘Regulation by Enforcement’, which indicates that enforcement measures are used to define specific laws. Instead of prescribing and enforcing standards, globalists employ the concept of ‘Agile Regulation’, which takes a reactive and iterative approach, recognizing that policy and regulatory development is no longer limited to governments, but is increasingly a multi-stakeholder effort.
Regulatory sandboxes, guidance and no-objection letters from regulators are forms of Agile Regulation that allow new types of solutions to be tested. This is a form of legislation with an iron fist wrapped in a velvet glove.
The analysis of this article will focus on the two world organizations with the greatest weight in most countries, one governmental, the United Nations Organization, and the other non-governmental, the World Economic Forum.
United Nations And Its IMF
The United Nations is the largest existing international organization created to promote international cooperation after the Second World War, which has the International Monetary Fund (IMF) as its financial arm for the implementation of economic policies through its credits, and the imposition of conditions for the loan (especially to developing countries).
After 1976, with the disappearance of the gold standard, the IMF took a leading role, at a global level, in granting credits to its (today) 190 member countries. For this reason it is an organization of utmost global importance.
One of the most pressing challenges, according to the IMF, is the absence of centralized data on the use of cryptocurrencies. It also warns about the lack of regulatory supervision, and in light of this, demands immediate international cooperation.
As you can see below, the unregulated development of the crypto industry is an attack on their Status Quo, due to the loss of power over the individual finances of citizens.
In 2021, the agency issued severe warnings to the government of El Salvador for its decision to adopt bitcoin as legal tender. And later, together with the Financial Stability Council, it recommended that governments not grant legal tender status to bitcoin or any other cryptocurrency, since the official means of payment “should be limited to public currencies issued by the State”.
The IMF report on “Macrofinancial Implications of Crypto Assets”, delivered to the G-20 in February 2023 during a meeting in India, was made public days after the bankruptcy of cryptocurrency-friendly banks: Signature Bank (SBNY) , Silicon Valley Bank (SVB) and Silvergate Bank (SI). The report is not available in the Official site (it was deleted) but you can see it here.
“A widespread proliferation of crypto assets comes with substantial risks to the effectiveness of monetary policy, exchange rate management, and capital flow management measures, as well as to fiscal sustainability. Moreover, changes may be required to central bank reserve holdings, and the global financial safety net, yielding potential instability. Finally, banks may lose deposits and have to curtail lending,“says the report.
The IMF believes that the macrofinancial risks that bitcoin and other cryptocurrencies pose to the global financial system have not been fully addressed, and has created an analysis tool to detect risks that could arise from the use of cryptoassets in countries, which is explained in this document: Assessing Macrofinancial Risks from Crypto Assets by Burcu Hacibedel and Héctor Perez-Saiz, September 29, 2023.
The document says: “Crypto asset technologies, if not well regulated and supervised, could create de facto a new and alternative financial system “.
With intellectual honesty, I can agree with part of the focus of the technical analysis of this document, but not with the purpose for which it is proposed, and even less with the underlying objective, which is control over the finances and trade of the ecosystem crypto.
These six categories are considered in the risk analysis:
- Issuers: Design or issue crypto assets
- Miners/validators: Verify and validate transactions, sometimes by solving complex cryptographic problems, and getting a reward for it
- Crypto exchanges/platforms: Provide custodian services and facilitate transactions between players
- Wallet providers: Promise the secure storage of crypto assets in exchange of a fee
- Investors, including individuals and institutions
- Payment providers, that enable clients to use crypto assets to pay merchants or transfer funds abroad using crypto assets, in addition to other payment services
Although the decentralized structure of the cryptocurrency ecosystem theoretically reduces the systemic importance of many of its main players, it also introduces new risks and regulatory challenges, the document says.
World Economic Forum And Its ‘Digital Currency Governance Consortium’
The World Economic Forum (WEF) is an international non-governmental organization based in Cologny, chaired by its Founder and Executive President, Klaus Schwab, which has brought together the main international business and political leaders annually in Davos (Switzerland) since 1971, to address issues of international interest, such as health and the environment.
Its current policy is currently guided by the 2030 Agenda, which is a global development agenda, a historic political agreement signed by 193 Member States in September 2015, which outlines a framework for environmental, social and economic development.
An official article published on November 12, 2016, called “8 predictions for the world in 2030”, summarized the general idea of this agenda, but was removed from its website, I suppose due to its explicit and controversial content for many, although today it can be seen on X, (until they delete it) and you can also see it in this historical archive.
The World Economic Forum has published reports on various topics related to cryptocurrencies, such as the regulation of cryptoassets, the macroeconomic impact of cryptocurrencies and stablecoins, and the governance of digital currencies.
The WEF emphasizes a global approach to crypto-asset regulation, and has presented potential solutions to barriers hindering global coordination in crypto-asset regulation efforts.
The WEF has also emphasized the need for global coordination to ensure the successful implementation of central bank digital currencies (CBDCs), and promote interoperability in national and cross-border payment systems.
In a document published in May 2023 ‘Pathways to the Regulation of Crypto-Assets: A Global Approach’ In his preface he says: “How best to regulate something that’s borderless, open-source, decentralized and constantly evolving? This is the question policymakers, industry and users are grappling with as the crypto-asset ecosystem develops ”, making it clear that decentralization is a concern for regulators.
They strengthen the case for a global approach to cryptoasset regulation because of the borderless nature of the technology, the interconnectedness within the cryptoasset ecosystem, and the links to the traditional financial ecosystem.
Table 1 shows the challenges for identifying people, which are key to regulatory schemes:
Monitoring, supervision and enforcement are an essential component of an effective regulatory framework. Countries are at different stages, some are still finalizing applicable legislation and policy, and a small portion are carrying out active monitoring.
The FATF Travel Rule is a good example of how differences in regulatory environments and resources can affect law enforcement. This Rule requires companies to record and disclose the information of the participants (originators and beneficiaries) of a transaction. This rule, originally applicable only to banks, was expanded in 2019 to also require Virtual Asset Service Providers (VASPs) to record and disclose information related to cryptoasset transactions and as a result, many observer countries began to incorporate the Rule of Travel on your local Anti Money Laundering (AML) directives.
The document details examples (not exhaustive) of regulatory measures taken by different countries currently in 2023:
In recommendation 3 of Table 9 we can see the core of globalization: ‘data sharing’:
The Digital Currency Governance Consortium (DCGC) is a group of more than 80 organizations representing various sectors and geographies, including the public sector, private sector and civil society, from 33 countries in Africa, Asia, Europe, the Middle East, North America and Latin America/Caribbean, to guide policy makers and financial institutions on the main risks, and highlighting the benefits of CBDCs (Central Bank Digital Currencies) and stablecoins, as assets under state control, in a white paper composed of eight parts.
I have published an article on CBDC(3) and another on stablecoins(4).
In the white paper ‘Central Bank Digital Currency Global Interoperability Principles‘ published in June 2023, highlights the exploration of the CBDC has gained significant momentum, with more than 100 countries, representing more than 95% of the world’s gross domestic product (GDP), actively participating in research, development, pilot or fully launched CBDCs.
This exponential increase in exploration highlights the growing recognition of CBDCs as a transformative tool in the future of digital payments, to promote interoperability in national and cross-border payment systems.
The decision-making process for issuing a CBDC varies from one central bank to another, reflecting their different priorities and circumstances, however, despite these differences, there are areas of commonality between jurisdictions that lay the foundation for both national and international interoperability cross-border, which is why it is imperative for them to develop a comprehensive set of principles and standards.
Final Words
The crypto ecosystem proposes individual financial sovereignty, based on DLT technology (Distributed Ledger Technology) and its peer-to-peer decentralization, and this is a threat to governments and the globalist elite.
The objective of regulators is clear: to control the blockchain industry so as not to lose its global economic power.
As I said at the beginning, this article has nothing to do with conspiracy theories, the information presented is official, and my analysis is not based on speculation.
Conspiracies do not exist… for those who have not studied history.
- The Crypto Industry and the Incoming Regulations
- The Impact of Current Cryptocurrency Regulation: Cryptoassets, Commodities, or Securities?
- CBDC: Government Centralized Money
- Stablecoins: A Necessity for the Crypto Industry
This article of my authorship was originally published in AdaPulse.
