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Crypto Candidates Quit, Trump Vows No CBDC: Law Decoded

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Crypto Candidates Quit, Trump Vows No CBDC: Law Decoded

In recent months, two presidential candidates in the United States who were friendly towards cryptocurrency have dropped out of the race. Vivek Ramaswamy, the only candidate with a crypto framework in his program, has acknowledged his defeat and thrown his support behind former President Donald Trump, stating the need for an “America first” candidate. Despite starting as a relative unknown, Ramaswamy gained a following in the crypto community for his policy proposals on Bitcoin and digital assets. Ron DeSantis, the governor of Florida and opponent of central bank digital currency (CBDC), has also withdrawn from the race after losing to Trump in the Iowa caucuses. During his campaign, DeSantis promised to ban a potential version of the digital dollar if he was elected.

Trump, who seems likely to win the Republican primaries, has picked up on some crypto-related issues from his defeated opponents. In a campaign speech in New Hampshire, he declared that he would never allow the U.S. Federal Reserve to create a CBDC, citing concerns about government control over people’s money. However, as president, Trump previously expressed disapproval of cryptocurrencies and Bitcoin, calling their value “thin air.”

In several U.S. states, bills have been introduced to prevent the recognition of a CBDC as money. These bills, filed in Utah, South Carolina, South Dakota, and Tennessee, could pose significant obstacles to the establishment of a CBDC in the country. Similar legislation has already been enacted in Florida, which not only banned the use of CBDCs issued by foreign governments but also encouraged other states to implement similar prohibitions using their commercial codes.

The European Banking Authority (EBA) has extended its Anti-Money Laundering and Counter-Terrorist Financing guidelines to include European crypto companies. The aim of these amended guidelines is to help crypto asset service providers assess their exposure to financial crimes based on their customers, products, delivery channels, and geographical locations. The guidelines also provide recommendations on how crypto firms should adapt their anti-financial crime measures, including the use of blockchain analytics tools. Additionally, the EBA emphasizes the importance of conducting risk assessments related to anonymity-enhancing features, self-hosted wallets, decentralized platforms, and products that facilitate transfers between the company and such services.

In Canada, proposed changes to regulations governing public investment funds and their treatment of crypto assets have been released by the Canadian Securities Administrators. These amendments would limit the activities of public investment funds in relation to crypto assets and establish standards for custodianship. Only alternative and non-redeemable investment funds would be permitted to directly buy, sell, or hold crypto assets, while other mutual funds could only invest in these funds to gain exposure to cryptocurrencies. The assets would need to be listed on a securities regulatory authority-recognized exchange in Canada and would have to be fungible.

Overall, these developments highlight the increasing importance of cryptocurrencies and digital assets in the political and regulatory landscape, both in the United States and abroad.

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