‘We don’t have much time left’ to regulate crypto, says Bank of France governor

“We in Europe need to move as quickly as possible or risk an erosion of our monetary sovereignty,” said Francois Villeroy de Galhau.

Bank of France governor Francois Villeroy de Galhau said that Europe should make crypto regulation a priority or risk digital assets challenging its monetary sovereignty.

At a Paris Europlace financial conference today, Villeroy said he believed the European Union only had “one or two years” left in which to establish a regulatory framework for cryptocurrencies. To not act, according to the central bank governor, would “risk of an erosion of our monetary sovereignty” and potentially weaken the euro.

“I must stress here the urgency: we do not have much time left, one or two years,” said Villeroy. “On both [digital] currencies and payments, we in Europe need to move as quickly as possible.”

Villeroy called on the EU “to adopt a regulatory framework in the coming months,” given the growing role cryptocurrencies are playing in regional markets. The use of cash declined during the first few months of the pandemic, a trend that Villeroy said could lead to “marginalization of the use of central bank money.”

Related: Bank of France Is Closely Watching Stablecoin Developments, Says Governor

The Bank of France governor has previously warned regulators against the potential risk of cryptocurrencies, including stablecoins and central bank digital currencies, or CBDCs. In September he said big tech companies could potentially build “private financial infrastructures and monetary systems” — including issuing their own stablecoins — which could adversely impact financial sovereignty in the EU for decades.

In January, the bank completed a pilot program for its own CBDC, later reporting investors had purchased and sold 2 million euros — roughly $2.4 million at the time — worth of simulated shares. The Bank of France has said it will conduct other test runs for the digital currency this year. 

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Mexico lawmakers aim to follow the example of neighboring countries with proposed Bitcoin legislation

“We are going to lead the shift to crypto and fintech in Mexico,” said one senator.

Eduardo Murat Hinojosa, a senator of the federal government of Mexico, has said he will be submitting a proposal to lawmakers seemingly aimed at crypto adoption in the country.

In a tweet today, Hinojosa changed his profile picture to feature the senator speaking into a microphone with the iconic “laser eyes,” indicating support for crypto. The lawmaker said he would be “promoting and proposing a legal framework for crypto coins in Mexico’s lower house,” specifically mentioning Bitcoin (BTC).

Hinojosa was not the only Mexico lawmaker indicating their support for crypto. Indira Kempis Martinez, a senator representing the state of Nuevo León, has also switched her profile to show laser eyes, with Hinojosa referring to her as a friend to the cause.

“We are going to lead the shift to crypto and fintech in Mexico,” said Hinojosa.

The social media activity comes as countries in Latin America have seemingly been taking steps towards greater adoption of crypto. In a video announcement to attendees of the Bitcoin 2021 conference last week, El Salvador President Nayib Bukele said he would send a bill to the country’s legislature demanding that Bitcoin be made legal tender.

On Sunday, Paraguayan congressperson Carlitos Rejala hinted that crypto would be connected to “an important project to innovate Paraguay in front of the world” starting this week. Yesterday he added that he was working with local crypto figures “in order for Paraguay to become a hub for the crypto investors of the world.”

Though Mexico has many individual investors who back Bitcoin, authorities in the country reported last year that cartels had been increasing their use of crypto to launder funds. At the time, the head of the Mexican attorney general’s Cyber Investigations Unit said the country’s law enforcement lacked the resources needed to tackle money laundering when crypto was involved.

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Nigeria’s central bank not discouraging people from trading crypto, says governor

The governor of the Central Bank of Nigeria has seemingly softened his stance on crypto for individuals, if not banks.

Godwin Emefiele, governor of Nigeria’s central bank which previously banned banks from servicing crypto exchanges, has reportedly clarified the bank’s position on the use of cryptocurrencies in the country.

According to local news outlet TodayNG, Central Bank of Nigeria, or CBN, deputy governor Adamu Lamtek said on behalf of Emefiele that the bank had not banned Nigerian residents from buying, trading, or selling crypto, but “[protected] the banking sector from the activities of cryptocurrencies.” Lamtek spoke at a seminar for the Finance Correspondents and Business Editors in the capital, Abuja.

“The CBN did not place restrictions from use of cryptocurrencies and we are not discouraging people from trading in it,” said Emefiele. “What we have just done was to prohibit transactions on cryptocurrencies in the banking sector.”

The statement follows the CBN announcing last month in a circular that it had placed a ban on all regulated financial institutions from providing services to crypto exchanges in the country. The ban directed all commercial banks to close accounts belonging to crypto exchanges and other businesses transacting in cryptocurrencies in Nigeria, warning of “severe regulatory sanctions” for any institution in breach of the rule. Some account holders at Nigeria’s Access Bank have already reported their accounts have been closed.

Emefiele previously referred to cryptocurrencies as “not legitimate money” with no place in Nigeria’s monetary system. The governor said at the time the central bank was doing its due diligence to better understand the implications of the emerging space.

However, many regulators and crypto enthusiasts in Nigeria have criticized the ban. Some lawmakers in the Nigerian Senate have proposed inviting the CBN governor and major crypto stakeholders to a hearing to discuss issues related to crypto regulations in the country.

Since the CBN introduced the crypto ban, the price of Bitcoin (BTC) has been trading at a premium in the country. Valued at $57,349 in the United States, data from crypto exchange Luno currently shows BTC has risen to a more than 70% premium in Nigeria at a price of $97,509.

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Indian banks put crypto traders’ accounts under the microscope

HSBC, HDFC and Citi are now requiring crypto traders in India to provide information about their activities or risk losing their funds.

Cryptocurrency traders and investors in India are among the latest casualties in an increasing trend of personal account closures by global banking operations. 

India’s parliament is currently contemplating a nation-wide crypto ban which local industry critics, such as former Coinbase CTO Balaji Srinivasan have compared to “banning the internet for five years.”

The Economic Times reports that customers of private banks in India, such as HDFC, HSBC and Citi, have been receiving notices this year asking them to clarify crypto-related transactions, often requiring them to visit their local bank branch in person. If such clarification is not received, accounts are at risk of being suspended or seized. One letter to an affected customer states:

“To comply with the regulatory guidelines, banks are advised to exercise due diligence by closely examining the transactions carried out in the account on an ongoing basis to caution users, holders and traders of virtual currencies including Bitcoins regarding risks.”

In 2020, India’s Supreme Court reversed an order from the Reserve Bank of India in which banks were asked to discontinue provision of services to cryptocurrency traders.

India’s parliament is expected to enact a new bill that will further restrict the financial activities of traders, and prominent members of the Indian cryptocurrency community have spoken up against it. Sathvik Vishwanath, CEO of India-based exchange Unocoin, believes that a move in the opposite direction is needed to encourage growth of the fintech space in his country. “With crypto by her side,” he said, “the country can bank the massive unbanked population.”

Banks are also preemptively closing customer accounts deemed to be associated with funds moving in or out of cryptocurrency exchanges in a number of countries.

On Feb. 5, the Central Bank of Nigeria prohibited financial institutions operating in the country from “facilitating payments for cryptocurrency exchanges,” leading to the immediate closure of bank accounts associated with exchanges and the individuals behind them.

In the U.K., HSBC recently stopped accepting transfers from cryptocurrency exchanges altogether. Lloyds Bank, a British retail and commercial bank, has also been ramping up efforts to dissociate themselves with cryptocurrency traders, as experienced by podcaster Peter McCormack in a Feb. 22 tweet. However that may be a self inflicted wound.

A long-time Bitcoin investor based in the U.K., who wishes to remain anonymous, told Cointelegraph that major banks across Europe are increasingly distancing themselves from crypto traders. He said that new accounts are being turned away from banks on the basis of their involvement with crypto.

“I was looking to openly approach a new bank and be up front about it,” he says. “But I met a brick wall.” The investor claims to have put “six figure amounts” through HSBC “with no issues,” but that legacy accounts are being treated differently than newcomers.

“If you don’t tell them and you’re already in, it seems fine. But if you ask, it’s a ‘no’.”

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Evolve wins second Canadian Bitcoin ETF as Ontario regulator approves application

Evolve Funds Group Inc has received approval to list its Bitcoin ETF. The new asset will trade under the ticker symbols “EBIT” and “EBIT.U” and provide direct exposure to BTC.

North America’s second Bitcoin (BTC) exchange-traded fund received regulatory approval on Tuesday, offering another potential entry point for institutional investors to access digital assets.

Less than three weeks after filing a preliminary prospectus for a Bitcoin ETF, Evolve Funds Group Inc announced Tuesday that its fund has been approved by the Ontario Securities Commission, or OSC.

The ETF has two ticker symbols: EBIT for Canadian-denominated units and EBIT.U for U.S.-denominated units. EBIT is said to provide “unhedged exposure to the daily price movement” of Bitcoin in Canadian dollars, whereas EBIT.U provides exposure to the daily price movements in U.S. dollars. 

Notably, the fund will track price data using CF Benchmarks’ Bitcoin Reference Rate, which aggregates data from several BTC/USD markets into a one-a-day benchmark index.

An updated prospectus submitted to the OSC on Frida outlines the fund’s investment objective:

“The Evolve Fund’s investment objective is to provide holders of Units with exposure to the daily price movements of the U.S. dollar price of bitcoin while experiencing minimal tracking error by utilizing the benefits of the creation and redemption processes.”

To achieve this goal, the Evolve fund will invest in long-term holdings of BTC purchased through Gemini NuSTAR LLC and other platforms. 

The prospectus was filed under a passport system, which allows the fund to be accessed in all of Canada’s 10 provinces and three territories. 

Sui Chung, CEO of CF Benchmarks, told Cointelegraph that the Evolve ETF has “developed a true first — giving investors an easy-to-understand product that is available through their existing brokers and advisors that gives ownership of Bitcoin.”

Chung continued:

“By using the regulated Bitcoin Reference Rate from CF Benchmarks, the ETF tracks the value of the Bitcoin and because its structure allows daily creation and redemption of ETF shares investors aren’t forced to pay soaring premiums in the secondary market.”

The Evolve fund is the second Bitcoin ETF to be approved by Canadian securities regulators this month. The Purpose Bitcoin ETF received approval last week, becoming the first physically settled North American ETF.

An ETF-style product from 3iQ was approved in Canada last year and is currently listed on the Toronto Stock Exchange. However, unlike the Evolve ETF, the EiQ fund doesn’t continually issue new shares.

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