Legal Digest July

Welcome to the July edition of our Legal Digest in 2024, where we dissect the intricacies of asset tokenization regulations. Throughout this series, we aim to navigate the complexities of transformative legislation, shedding light on its impact on the tokenization of assets and exploring the implications for investors, financial entities, and the broader market. Join us as we uncover the regulatory framework and unravel its implications in the world of asset tokenization. So let’s explore what July brought to the table:

Central Banks Prioritize Wholesale CBDCs Amid Increasing Crypto Regulations

The 2023 BIS survey reveals 94% of central banks are exploring CBDCs, with a rise in wholesale CBDC trials in both advanced and developing economies. There's a preference for wholesale over retail CBDCs, with a focus on interoperability and programmability. Retail CBDCs are being considered for features like holding limits and offline use. Additionally, most regions are developing or have established regulations for stablecoins and other cryptoassets, despite their limited use outside the crypto sector.

European Blockchain Sandbox Announces Second Cohort Projects

The European Blockchain Sandbox has selected projects for its second cohort after a competitive process. Nearly 60 applications from various EU/EEA sectors were received by March 25, 2024. Experts from Warren Brandeis and an academic panel chose projects based on official criteria. One major public entity project and 19 others from diverse industries and regions were approved, showcasing the strong interest and progress in blockchain technology.

EBA Unveils Crypto-Asset Regulatory Framework Under MiCAR

On June 13, 2024, the European Banking Authority (EBA) released a comprehensive regulatory framework under the Markets in Crypto-Assets Regulation (MiCAR). This includes final draft standards covering prudential requirements for asset-referenced and e-money token issuers, such as own funds, liquidity management, and recovery plans. The standards outline criteria for assessing risk, adjusting fund requirements, and stress-testing. Developed with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), these guidelines aim to strengthen supervision and risk management in the EU's crypto-assets market.

Italy Enforces Tougher Crypto Regulations

Italy is tightening its oversight of the cryptocurrency market with stricter rules aligned with the EU's MiCA framework. The new draft policy introduces fines from 5,000 to 5 million euros ($5,400–$5.4 million) for offenses such as market manipulation and financial crimes. This aims to enhance supervision of digital asset markets by targeting insider trading and manipulation through increased regulatory scrutiny and significant penalties.