The article further reports that over 80 governments around the world are exploring developing their own digital currency. It is reported that five countries have now launched Central Bank Digital Currencies (“CBDC”s)
Gherson’s White-Collar Crime team in a series of blogs have recently explored CBDCs, their implementation, their differences from other cryptocurrencies and, finally, their effect on financial regulation. Here, we look back over blogs in this series:
What is a CBDC?
During a time of much discussion about the introduction of CBDCs, the first blog posed the question: CBDCs – what are they, and how could they bring improved financial regulation and compliance but reduced financial privacy and increased surveillance?
In this initial blog Gherson’s White-Collar Crime team answered popular questions at the time such as: what exactly is a CBDC, does any country have a CBDC, and how does a CBDC differ from a cryptocurrency?
Finally, Gherson’s White-Collar Crime team explored how it is in fact through characteristics shared with cryptocurrencies that CBDCs will arguably bring the greatest benefits to financial regulation and compliance (specifically Know Your Customer and Anti-Money Laundering) but also concerns over privacy and surveillance.
Does the introduction of CBDCs mean increased crypto regulation?
Gherson’s White-Collar Crime team wrote the second blog following a “crackdown” on cryptocurrencies at a time of reports that China is leading the global pack in terms of developing a CBDC. Indeed, Thomas Cattee of Gherson’s White-Collar Crime team had recently provided comment about the introduction of CBDCs, including China’s stance, for a FSTech article “What would a digital pound mean for UK financial services”.
This second blog posed the question of whether there is a connection between the rise of CBDCs and increased crypto regulation. For example, the Financial Times had observed in a recent article entitled “Bitcoin gyrates on fears of regulatory crackdown” that
[t]he development reflected China’s campaign to limit institutional activity in cryptocurrencies as it prepares to launch its own digital currency.
Move over Bitcoin, here comes Britcoin?
For those whose developing understanding of Bitcoin was disrupted by talk of the emergence of Britcoin, the third blog in the series usefully compared Bitcoin and Britcoin.
To further complicate developments, this third blog was written at the time El Salvador become the first country to classify Bitcoin as legal tender.
As such, this blog considered two overlapping issues: primarily, what is Britcoin, how does it differ from Bitcoin and is there any chance it could replace Bitcoin? Secondarily, what effects could the increasing classification of Bitcoin as legal tender have (spoiler: potentially more crypto regulation!)?
Gherson’s White-Collar Crime team are able to advise in relation to the regulation of bitcoin, digital currencies, and related cryptoassets. Please do not hesitate to contact us, send us an e-mail, or alternatively, follow us on Twitter, Facebook, or LinkedIn to stay-up-to-date.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2021