Page 8 - NIBAF-Training Matters January-March 2021

consumer protection. He further added that Providers (VASPs), which is significantly challenging.
instructions were issued to banks that they should not Creating a system for the digital transactions is
themselves deal in crypto-assets due to safety more about the transparency of knowing people
concerns. behind the transaction – if this protocol was
accepted, VA might be recognized globally but a
Ms. Serene Liaw, talked about the history of universal approach to regulation is crucial. It’s a
digitalization which started with Fintech, when the process of global working together to come up with
technology collapsed the business processes to standardized regulations.
enhance efficiency, she added that if ‘Defi’,
democratization and create a new way of financial During the Q&A session the speakers addressed
intermediation that does not rely on intermediaries queries relating to how regulating crypto assets can
but on block chains, was to be globally acceptable improve the security, using crypto currencies as a
and become the future in digital space than it is medium of exchange, which Central Banks are
more about trust and credibility of the system. She looking into regulating, tax treatment for gains
broadly categorized the crypto assets as payment losses, effect on monetary policy and national
tokens (used as means of payment and exchange), currency if crypto becomes widely used, conversion
Utility tokens (granting access and use of digital and use of crypto assets in multi jurisdiction
resource), and security token (representing an environment, etc.
investment purpose similar to traditional securities.
Some central banks have started to experiment with Dr. Inayat Hussain concluded the webinar stating
their own digital currencies to some extent e.g. that crypto – assets have immense potential and for
China. She mentioned that the G20 Ministers of developing economies like Pakistan, it can be a
Finance and Central Banks Governors did not game changer in terms of financial inclusion. The
consider crypto-assets as a material risk to financial way forward would be more dialogue and
stability but did recognize it as posing concerns collaboration of market players with regulators for
regarding consumer and investor protection, tax the growth of this eco system. Mr. Petri Basson,
evasion, money laundering and terrorist financing. added that there is need for collaboration among
FATF 2018 Regulations require exchange of the various players for developing this eco system.
Ms. Serene Liaw stated that as the size of crypto
information on originator and beneficiary i.e., assets grows, better regulations will be in the
Virtual assets (VA) and Virtual Assets Service
interest of both investors and consumers.

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