Cryptos on the Rise: Thomson Reuters Insights on the Risk and Regulation of Crypto-Currencies
As Bitcoin, Ethereum, Dogecoin and other crypto-currencies dominate financial headlines, policymakers, regulators and financial services firms are rushing to come to terms with this new class of financial assets. While the rapid pace of digital transformation and the rise of crypto-assets have the potential to make payments and transfers more efficient, the speed and reach of transactions – combined with the potential for anonymous activity and for transactions without financial intermediaries – make them vulnerable to misuse and money laundering.
A new report and map from Thomson Reuters Regulatory Intelligence explores crypto-assets, their risks and regulations, and how their impact and acceptance is evolving worldwide.
The report considers one key problem: the lack of an internationally consistent definition of the term “crypto.” It also examines the implications for financial services firms – and their customers – of a possible “arms race” among central banks as they seek to deploy their own digital currencies.
Also, the report notes the emergence of bitcoin as a mainstream instrument and assesses how that has changed the risk profile with regards to money laundering and other misuses of cryptocurrencies for illicit or illegal activities. The report acknowledges that cyber-risk is a concern for all cryptos, and considers how firms, regulators and exchanges can enhance their cyber-resilience.
To help make sense of this emerging landscape, the report’s compendium provides an overview of the regulatory landscape for cryptocurrencies such as bitcoin. It includes a global heat map (above), displaying the regulatory environment on a country-by-country basis for more than 60 jurisdictions, with details about the legality, tax treatments, and evolving regulatory frameworks.
The report concludes: “Policymakers, regulators and firms all need to play their part in ensuring that cryptos are as ‘safe’ as possible not only in terms of investment risk but with regards to regulatory certainty and cyber resilience. … It is in everyone’s interest that cryptos are subject to a regulatory regime with a clear perimeter, coherent definitions and an agreed, well-informed stance on risk and risk management.”
Download the full report, Cryptos on the rise, for more insights.