Crypto On LYO: The Blend — DIFC in Dubai Plans New Digital Asset Law, Taiwan Introduces Fresh Regulations for Crypto Firms, Brazil Launches Digital ID System Powered by Blockchain

What happened in the crypto world in the last week? Let’s see some interesting news together!

DIFC in Dubai Plans New Digital Asset Law

The Dubai International Financial Centre (DIFC) has unveiled plans for a novel regulatory framework to oversee digital assets, aligning itself with the swift developments in financial markets.

The proposed Digital Assets Law outlines a legal structure for controlling, transferring, and managing virtual assets, including cryptocurrencies, NFTs, stablecoins, and security coins. Additionally, the DIFC has introduced the Law of Security, inspired by the UNCITRAL Model on Secured Transactions but tailored to accommodate specific DIFC considerations.

Jacques Visser, Chief Legal Officer at DIFC, commented, “DIFC has been collaborating closely with digital asset and financial experts to create a groundbreaking global Digital Assets Law, alongside a significantly enhanced and updated Law of Security regime.”

The digital asset sector represents a trillion-dollar industry that continues to expand and evolve. In 2021, the global crypto market’s value skyrocketed to approximately $2 trillion, up from $100 billion three years prior, according to CoinMarketCap.

The DIFC’s proposals, presented in Consultation Papers No. 4 and No. 5 of 2023, are now open for public consultation for a period of 40 days, concluding on November 5, 2023. Interested parties can access the papers on the DIFC Legal Database.

Taiwan Introduces Fresh Regulations for Crypto Firms

Taiwan’s Financial Supervisory Commission (FSC), the principal regulatory authority for financial markets in the region, has released highly anticipated guidelines for virtual asset service providers (VASPs), focusing on enhanced supervision and safeguarding of customer interests.

These new guidelines, which have been much awaited since September 7, when the FSC assumed control of digital assets and announced the development of new rules, impose several key requirements on domestic digital asset platforms.

They mandate the segregation and secure custody of company and customer assets, establish transparent criteria for the inclusion and removal of digital assets from trading, and necessitate offshore exchanges intending to operate in Taiwan to register with the FSC.

The guidelines explicitly state, “Foreign virtual asset platform operators that have not registered under the company laws and have not declared compliance with anti-money laundering regulations to the FSC may not solicit business within Taiwan or target Taiwanese nationals.”

This measure is designed to ensure that foreign VASPs adhere to local regulations, particularly those pertaining to anti-money laundering (AML) measures. Furthermore, the FSC has imposed additional restrictions on digital asset platforms, prohibiting them from engaging in activities related to derivative financial products involving virtual assets as underlying assets or virtual asset businesses that resemble securities.

These measures aim to enhance the stability of the financial markets and prevent excessive speculation.

Brazil Launches Digital ID System Powered by Blockchain

The Brazilian government has unveiled plans to implement blockchain technology for digital identity, set to impact over 214 million citizens.

Rio de Janeiro, Goiás, and Paraná will pioneer the issuance of on-chain identification documents using a private blockchain developed by Serpro, Brazil’s national data processing service. A decree issued on September 25 states that the entire country is expected to be capable of issuing identity documents via blockchain technology by November 6.

Alexandre Amorim, President of Serpro, highlighted blockchain’s immutability and decentralization as key factors in its suitability for the country’s digital identification project.

He stated, “Blockchain technology plays a critical role in protecting personal data and preventing fraud, offering a more secure digital experience for Brazilian citizens. Utilizing the b-Cadastros blockchain platform significantly enhances the security and reliability of the National Identity Card project.”

The Brazilian government considers the national ID project vital in combatting organized crime, facilitating intergovernmental cooperation, simplifying access to services, and streamlining administrative records. A similar initiative has been implemented in Buenos Aires, Argentina, enabling residents to access identity documents through a digital wallet.

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