3rd March 2022 > > Ukraine & cryptos.

tl;dr

The invasion of Ukraine will have a positive impact on the regulatory landscape for cryptos in the US and in Europe.

Market Snap (at time of writing)

Market Wrap

Some decent volatility across all markets.

Occasional Series – Abramovich is selling Chelsea

This is great news.

Can we get rid of the other billionaire owners too, especially those of Newcastle, whose morals and ethics cannot be accepted in a liberal democracy.

Curious Cryptos’ Commentary – Cryptos and Russia

By way of introduction, please do not think today’s commentary is downplaying the awful events currently occurring in Ukraine. However, I cannot influence those events, but they will influence cryptos, so we need to understand what that influence might be.

Spoiler alert – the war being waged by Putin and his murderous henchmen will be positive for cryptos.

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We have already seen (CCC 28th February 2022) that Convicted Criminal Christine Lagarde has rowed back on her calls for “global regulation” and is now advocating the EU rapidly implements its own rules, unimpeded by the desire of countries such as China and Kazakhstan to ban crypto mining.

France’s finance minister, Bruno Le Maire, has weighed in with a surprising claim:

“When it comes to economic and financial sanctions, we want to remain flexible and mobilised.“

There are concerns that cryptos could be used to try to evade traditional means of imposing sanctions on Russian individuals close to Putin. Bruno again:

“We are taking measures, in particular on cryptocurrencies or crypto assets, which should not be used to circumvent the financial sanctions. We will be taking stock on a daily basis with regard to the implementation of these sanctions, their effectiveness and any additional measures which may be needed.”

Bruno does not explain what those extra measures might be, but if members of France’s political elite must now develop their knowledge and understanding of cryptos – instead of taking the initial Lagarde route of wanting total control – this can only be a good thing.

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But its not just in France that this mature and constructive approach is being adopted. Christian Linder, Germany’s finance minister, has also joined the party:

“… (EU leaders should) take steps to prevent listed individuals and institutions from switching to unregulated crypto assets.”

Over in the US, Federal Reserve Chair Jerome Powell, has specifically linked the need for better regulation with the situation in Ukraine. Developing this theme further, Jerome made a key point:

"There isn’t in place the kind of regulation framework that needs to be there. [...] What’s needed is a framework, in particular ways to prevent these unbacked cryptocurrencies from serving as a vehicle for terrorist financing and just general criminal behaviour, tax avoidance and the like."

Connecticut Representative Jim Himes agrees with Jerome:

“It is time, in fact, it is past time for all of us to lead on creating a regulatory environment in which we, rather than the world’s despots, terrorists, and money launderers, benefit from the emergence of cryptocurrency including a central bank digital currency. It is time for all of us to act.”

Putting aside his desire for a central bank digital currency – which by definition is not a crypto – his comments are to be applauded.

I could go on, but I think you get the message.

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We can expect some rapid and positive developments on the key issue of crypto regulation from the EU and the US in the coming weeks and months.

Let us hope the prospect of vast amounts of tax dollars arising from the crypto industry will show the UK government the need to immediately follow suit.