Understanding Cryptocurrency Basics

I'm pleased to share my academic paper, which explores a question increasingly relevant for central banks and policymakers: Does retail cryptocurrency adoption influence how quickly countries advance their CBDC initiatives? Retail cryptocurrency adoption is not just a trend; it is a policy signal. Key insights: - Higher crypto adoption is linked to faster CBDC development - A new DAU-based metric captures real user behavior - Results remain robust across multiple econometric approaches (IV, CMP, matching) - Regulation and tax disincentives weaken the response - Strong auditing and reporting frameworks strengthen it Takeaway: CBDCs are increasingly emerging as a strategic response to private digital money, a “competitive public option” dynamic. Read the full paper: https://lnkd.in/d5SmcdXA #CBDC #Cryptocurrency #CentralBanking #FinTech #DigitalCurrency #Research #Policy #Centralbanks

After many years working in the virtual asset sector, I tend not to be fazed by day-to-day developments. But I must admit that the recent proliferation of memecoins has given me pause. How do we, as regulators, prepare for the inevitable ripple effects of high-profile token launches and maintain fair and transparent markets? In my opinion, there are likely to be broader implications for the virtual asset landscape, particularly in terms of capital formation, market integrity, and, of course, consumer protection. Debates will no doubt rage, but the broader takeaway from recent events is undeniable: the token economy is entering a new phase. For years, businesses have hesitated to embrace token-based funding due to regulatory uncertainty. Now, the actions of prominent figures may open doors for innovators who see tokens not as speculative instruments, but as legitimate financial tools. With the advent of artificial intelligence, the ability to do this has become even more straightforward. AI tools can assist in aspects of virtual asset creation, from coding smart contracts to designing marketing strategies. With various platforms now enabling users to create and trade memecoins with ease, there is potential for tokenised assets to democratise access to capital and empower individuals. Models are emerging that might reward the brightest ideas and talent with the resources they need. Yet with opportunity comes risk. The same qualities that make token markets dynamic – speed, accessibility, and global reach – also invite opportunistic behaviour. The rush to capitalise on the latest trends could lead to speculative bubbles and exploitation. In an economy where the newest token can gain momentum overnight, investors must remain cautious. Not every token will present the same risk profile. As for us regulators, we must strive not to stifle innovation but to ensure it operates within a framework that protects investors, promotes market integrity, and upholds public confidence. The events of the past week underscore the importance of balancing innovation with accountability. High-profile token launches, especially those tied to influential figures, amplify the need for clear guidelines and consistent oversight. At the same time, we must recognise the human element in this technological shift. Tokenisation is not only a technological trend; it encompasses fundamental human desires to create, exchange, and assign value. History is being written in real-time. As we navigate this new landscape, regulators must remain agile, thoughtful, and open-minded. The token economy, with all its complexities and contradictions, represents an opportunity to reshape financial systems for the better. But realising its potential will require collaboration, vigilance, and an unwavering commitment to the principles of fairness and trust. What are your thoughts on memecoins and the associated risks and opportunities?

Stop trying to get rich quick. My top 15 learnings from investing in the crypto markets: 1. Never invest in something because someone told you to. Do your own research. Develop your own conviction. And then ask others questions about your thesis. Analyze their answers to figure out if you know more than they do. Do this enough and you’ll develop conviction in your view vs the market view. 2. Write. The thoughts in your head aren’t real until you write them out. 3. Study onchain data. Artemis 4. Observe the market. If you aren’t observing the market, you are the market. Write out notes on a monthly basis about what you are seeing in the market. Observe the fear and greed of your friends and associates. The market is always telling you something. 5. Price moves first. This is extremely unique in crypto. Price. Moves. First. Fundamentals come later. Study Solana over the last year if you don’t believe me. 6. The name of the game is survival. Only invest what you are comfortable losing. If you are up at night worried about your investments, you’ve already lost the game. 7. Always leave some cash on the sideline. I keep a higher portion of my portfolio in cash than most (+10%). It keeps me calm. And I always feel like I can go on offense when an opportunity presents itself. 8. Never chase an opportunity out of FOMO. The next opportunity is right around the corner. Be patient. 9. Meditate daily. Meditation is the practice of observing your thoughts. Practice being mindful of that voice in your head. Do this enough and you’ll get better at observing your emotions and not let them get the best of you. This is a superpower not just for investing but for life. 10. Don’t forget to take profit. The market doesn’t owe you anything. Your price target isn’t real. Always re-assess and take profit or get out of a trade as information changes. 11. Never, ever, attach your identify to an investment. This is probably the biggest mistake I see in crypto, which is known for online communities, which function like cults. Everyone knows what happens to cults when everyone drinks the kool-aide. 12. Stay humble. Just when you start to think you’re a genius is when the market will hand you some L’s. 13. Pattern recognition is real. Why? Human behavior. 14. If you don’t understand macro, you don’t understand crypto. 15. Stop trying to get rich quick. Name of the game is *time in the market.* _______ The most obvious thing I see in the market right now? SOL will outperform ETH. Solana infra will outperform Ethereum infra (e.g. Pyth > Chainlink) Solana DeFi will outperform ETH DeFi (e.g. Jupiter > Uniswap) Solana memes will outperform ETH memes (e.g. Giga > Pepe) [none of this diminishes ETHs significance long-term. just the reality of the market today] SUI and TIA look like the alt L1 plays this cycle. What would you add? Data: Solana vs Ethereum Daily Fees powered by @artemis

I thought I was done with prudential policy after my time at ISDA - but clearly, I was wrong! The global financial system is changing, and fast. Tokenised government bonds, regulated crypto ETFs, and fully-backed stablecoins are no longer experiments, they’re part of financial markets today. However, as a new letter and report published by Global Blockchain Business Council (GBBC), Global Digital Finance, GFMA, ISDA and other leading trade associations argues, banks - the very institutions best placed to bring oversight, governance, and scale to these innovations - are being held back by the current Basel Committee on Banking Supervision (BCBS) Cryptoasset Standard. The problem? 1️⃣ 𝐏𝐮𝐧𝐢𝐭𝐢𝐯𝐞 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬 - a 1250% risk weight for many crypto exposures treats them as if they were toxic, regardless of actual risk profile. 2️⃣ 𝐎𝐧𝐞-𝐬𝐢𝐳𝐞-𝐟𝐢𝐭𝐬-𝐚𝐥𝐥 𝐭𝐫𝐞𝐚𝐭𝐦𝐞𝐧𝐭 - permissionless blockchains vary widely in governance and security, yet the rules don’t recognise these nuances. 3️⃣ 𝐌𝐢𝐬𝐬𝐞𝐝 𝐨𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐟𝐨𝐫 𝐬𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧𝐬 - ignoring real-world prudential improvements, evolving stablecoin models, and regulatory advances.  We believe the BCBS framework can, and should, evolve. By adopting a risk-sensitive, technology-neutral approach guided by the principle of 𝘴𝘢𝘮𝘦 𝘢𝘤𝘵𝘪𝘷𝘪𝘵𝘺, 𝘴𝘢𝘮𝘦 𝘳𝘪𝘴𝘬, 𝘴𝘢𝘮𝘦 𝘳𝘦𝘨𝘶𝘭𝘢𝘵𝘪𝘰𝘯 we can achieve the following: ⚖️ Keep innovation inside the regulatory perimeter; 🌐 Support a level playing field across markets; and 💱 Ensure that banks can play their role in connecting traditional and digital finance safely. Updating the BCBS framework doesn’t mean lowering standards - it means building ones that are fit for purpose in a digital era. 📖 Read more in my op-ed with Matthew Osborne in The Banker: https://lnkd.in/gr-MX3Bu

A few months ago, I was charged a hefty interest on my credit card even after paying the bill on time. Even after raising multiple requests with the issuing bank asking how the interest was calculated, I received no clear answer. After weeks of back-and-forth through the bank’s escalation matrix, I finally reported the matter to the RBI Ombudsman. Within a month, the bank refunded the entire interest amount to me. It is reassuring to know that there's a proper redressal mechanism when a regulated entity fails to act responsibly. Personally, this is one of the reasons I wish to have regulations in place for crypto service providers in India. Contrary to what most people believe, regulation won’t solve all the banking challenges or remove the security threats that exist for crypto assets. What it will do is create a safer environment for investors — one with transparency, defined operating frameworks, and a system of recourse when guidelines are not followed. Today, if someone’s withdrawal is stuck or a support ticket is closed without a proper resolution, there is no formal channel for help. Reporting to a local police station often leads to being dismissed as “greedy” or “involved in something illegal.” Regulation won’t make life easier for service providers, but it will make things safer for investors — and that’s what truly matters for the long-term trust in this industry.

I4C’s new SOP on freezing and liquidating stolen crypto assets is a quiet but important step forward. For a long time, in the absence of standardised procedures, cybercrime responses, despite good intent, sometimes resulted in broader account freezes, impacting genuine users and platform’s operations. The I4C’s newly notified SOP brings something the ecosystem has been asking for: process clarity. By clearly defining when and how stolen crypto or equivalent value must be frozen, liquidated, or transferred to interim custody, the SOP introduces predictability and accountability, for law enforcement, banks, and crypto service providers alike. This is important for three reasons: First, it protects victims while ensuring actions are targeted and proportionate, rather than blanket in nature. Second, it allows exchanges to comply with law enforcement requests with clear legal backing, reducing operational disruption and post-facto uncertainty. Third, it signals that crypto platforms are now being treated as formal financial intermediaries, an essential step for a maturing digital asset ecosystem. No framework is perfect on day one, and implementation will matter. But regulation through clear procedures, rather than ad-hoc actions, builds trust for users, institutions, and regulators alike. India’s digital asset ecosystem will benefit most when consumer protection, enforcement efficiency, and business continuity move forward together. This SOP is a step in that direction.

#FinTech | #Regulation - 🚨 Big move from the Financial Conduct Authority on #Cryptoasset Regulation 🚨 The UK Financial Conduct Authority (FCA) has just published its long-awaited Consultation Paper (CP25/25) on how the FCA Handbook will apply to regulated cryptoasset activities. This is a major milestone in bringing crypto firmly inside the UK’s regulatory perimeter. So, what’s changing? 🔹 Scope of Regulation Expands For the first time, activities like #stablecoin issuance, #custody, trading platforms, intermediation, and staking will all fall under the FCA’s remit. Firms must seek authorisation under FSMA before carrying out these activities in the UK. 🔹 “Same Risk, Same Regulatory Outcome” Crypto firms will now face requirements already familiar to traditional finance firms, including: Senior Managers & Certification Regime (SM&CR) – personal accountability at leadership level. Operational Resilience standards – stress-testing for outages, hacks, or validator failures. Financial Crime rules – AML/CTF, the Travel Rule, and stronger systems against fraud and scams. High Level Standards (PRIN, COND, GEN) – conduct, governance, and treating customers fairly. 🔹 Consumer Protection is Front & Centre The FCA is clear: crypto harms are real. Their research shows: 26% of UK crypto users have been targeted by scams, with 10% losing money Many consumers wrongly believe they have financial protections when buying crypto. The proposed rules aim to reduce risks like mis-selling, poor disclosures, hacks, and the infamous “single point of failure” (think Quadriga or FTX collapses). 🔹 Economic Impact The FCA’s cost-benefit analysis estimates: £130m in reduced losses from scams over 10 years. £92m in compliance costs for firms (IT, governance, reporting) In short: stronger markets, fewer consumer losses, but firms must invest heavily in compliance. 🔹 A Global Signal The FCA isn’t acting in isolation. With the EU’s MiCA, US debates around stablecoin laws, and Asia tightening rules, this consultation shows the UK wants to position itself as a safe but competitive hub for digital assets. This is not the end of “wild west crypto” in the UK—it’s the start of a maturing market where innovation can scale within clear guardrails. Firms that can adapt will benefit from higher trust and access to institutional adoption. Those that can’t may struggle to survive.

I’ve seen many crypto investors say they’re “just helping” a friend or family member trade crypto by using their own account. The assumption is: “It’s not my money, so I’m not responsible for the gains or losses.” Unfortunately, that’s not how the IRS sees it. The Reality: If the account is in your name and tied to your wallet or exchange account, then all activity is considered yours for tax purposes. It doesn’t matter whose money was used or who benefited from the trades, you are legally responsible for reporting the gains, losses, and income on your tax return. This can create serious issues: • You may owe taxes on gains that aren’t yours. • You may be audited if the IRS sees discrepancies. • Crypto someone sends you to trade on their behalf is usually treated as a gift (or a loan if there’s a written loan agreement). Either way, you need to know the sender’s original purchase date and cost basis. • Once you mix their crypto with your own in the same account, it becomes almost impossible to separately calculate their gain/loss for future reporting. ✅ Practical Advice: If you want to help friends or family invest in crypto, avoid using your personal account. Instead: • Encourage them to open and use their own exchange/wallet accounts. • If they need guidance, share educational resources or recommend they consult a licensed professional. • Avoid trading on their behalf, even informally, since that can create both unwanted tax consequences for you and potential licensing or regulatory issues. Helping loved ones get into crypto is great, but make sure it doesn’t create a surprise tax bill (or compliance problem) for you. #CryptoTax #CryptoInvesting #TaxTips #IRS #FamilyFinance #ChainwiseCPA

Very grateful to the Harvard Law School Bankruptcy Roundtable for featuring our article on the treatment of digital assets in insolvency! 😊 The collapse of crypto-exchanges and the growing use of digital assets in many corporate transactions have sparked numerous discussions about their treatment in insolvency. While much of the academic literature in this area has focused on whether cryptocurrencies constitute property of the estate, in this piece, whose summary has been published on the Oxford Business Law Blog, Aurelio Gurrea-Martínez, Daniel Liu and I seek to provide a comprehensive analysis of the treatment of digital assets in insolvency, analyzing questions such as: 📌 The classification of cryptoassets from different angles, including law (particularly through the lens of property law and securities regulation), finance, and accounting, and how different jurisdictions around the world have dealt with similar legal questions, such as whether cryptoassets can be classified as ‘property’ or a ‘security’. 📌 Whether crypto-represented debt should count for the purpose of assessing whether debtors and creditors can initiate insolvency proceedings. 📌 The role and rights of the holders of digital assets in insolvency proceedings, and how the answer to this question may affect key aspects of the procedure, including the fate of the insolvent firm. 📌 Valuation of cryptoassets in insolvency proceedings, distinguishing situations in which the debtor has cryptoassets that represent an asset, a liability, or both. 📌 The custody, recovery and realisation of digital assets. 📌 How cryptocurrencies can be used to engineer creative restructuring solutions, as shown by certain cases in the United States and Singapore. The summary of our paper can be found here 👇 https://lnkd.in/dRexkWpA   And here (for an extended summary published on the Oxford Business Law Blog) 👇   https://lnkd.in/dzdA5gyZ For those potentially interested, our full paper can be found here 👇 https://lnkd.in/dmZ_tb_a Our sincere gratitude to the editorial team of the Harvard Law School Bankruptcy Roundtable for the opportunity to share our research and receive comments and feedback from anyone interested in this fascinating area at the intersection of law, finance and technology! https://lnkd.in/dRexkWpA Singapore Management University SMU Yong Pung How School of Law SMU Centre for Commercial Law in Asia (CCLA) SMU Centre for Digital Law WongPartnership LLP #law #finance #technology #crypto #insolvency #valuation #innovation #entrepreneurship #bankruptcy #fintech