Despite some hurdles in the cryptocurrency industry — namely the fall of crypto giants like FTX — the cryptocurrency market is continuing a trajectory of growth into 2024. The landscape is poised for some significant transformation in the coming year, with some highly anticipated regulatory changes taking place that are set to redefine the crypto space.
The crypto market is defined by opportunity and uncertainty, and these markers may necessitate a closer look at the evolving framework of the market if crypto is to have a bright future.
Shane Rodgers, co-founder and CEO of PDX Advisors, LLC., is prepared for regulatory shifts to impact his business operations as the new year dawns. To him, regulatory updates in the crypto market are a welcomed pivot. “Regulations are a considerable positive for our businesses,” he shares.
Specific Changes Coming in 2024
Although we are just a month into the new year, recent regulations for the crypto market are already coming fast and furious. On January 10, the Securities and Exchange Commission (SEC) approved 11 Spot Bitcoin Exchange-Traded Funds (ETFs), a move that many in the industry see as a beacon of hope for clearer regulations and guidelines in the market going forward.
While stablecoins are not a new innovation, emerging regulations on stablecoins could open up opportunities for payments and cross-border transactions in the near future. By mid-2024, new regulations for stablecoin issuers in the European Union (EU) will go into effect, with other regulations coming out of Hong Kong and the UK likely to follow. This brings the stablecoin under scrutiny, leading regulators to be more stringent on validating assets and protecting holders.
Amid the upheaval of early 2023, three cities emerged as examples of regulatory uprightness: Paris, Dubai, and Hong Kong. As we continue along into 2024, the world will be watching these three hubs for direction and clarity on regulatory creation and compliance.
Dubai has emerged as an early leader, bringing forth the world’s first crypto-specific supervisory body, the Virtual Assets Regulatory Authority (VARA). Hong Kong has long established itself as a leader in robust regulation with the establishment of highly regulated trading services. Lastly, Paris has been a destination for crypto firms seeking to operate under Markets in Crypto Assets Regulation (MiCA).
Although intense bipartisanship in the US could slow regulatory improvements here in the states, a number of bills are making their way through Congress that stand to strengthen the crypto market going forward, including Senator Elizabeth Warren’s Anti-Money Laundering bill.
Compliance Updates and PDX
Rodgers and his team at PDX are prepared to make necessary shifts within their business to roll with the regulatory changes emerging globally. “Throughout 2024 Q2, Q3, and Q4, we are applying for money transmitter licenses in all relevant US states concerning our Beam payments app,” he says.
The consideration of Hong Kong as a regulatory hub for crypto also influences PDX’s operations. “We are also applying for the appropriate money storage and transmittal licenses in Hong Kong, EU, and UK with respect to our payments business,” Rodgers adds.
Regarding overall compliance, Rodgers and his team are interested in strengthening PDX’s processes as much as possible. “Concurrently with our legal team, we are putting in place comprehensive policies and procedures manuals,” he says. “We are also strengthening our global Know Your Customer (KYC) procedures and Anti-Money Laundering (AML) procedures and compliance standards.”
With each regulatory change or advancement, PDX is set to adapt and make its operations even more efficient and compliant. “Being compliant is essential to function smoothly and legally and at the highest possible industry standards,” says Rodgers. “An extremely disciplined organization is essential in financial services.”
Rodgers and his team take a collaborative approach to regulatory compliance, working fully with regulators and their legal team to exceed their guidelines and expectations.
The story of cryptocurrency is an evolving narrative. Reflecting on the issues facing the crypto space in 2023 — some significant — we can look to the new year as a chance to strengthen the market and regulatory oversight of the space. The new crypto era will be defined by heightened attention to security, increased compliance, and less fraudulent activity, all of which combine to signal a maturing market ready to be taken seriously in the financial world.
As we chart the uncertain but exciting course ahead, it is imperative for participants in the crypto space, such as PDX, to remain vigilant. They must continue to constructively engage with regulatory bodies and meaningfully contribute to a new financial frontier that joins innovation with responsible oversight.
