Digital Assets

Overview:

AIMA serves as the global voice of the alternative investment management industry in the digital assets space. AIMA’s work in digital assets is overseen by our global Digital Assets Working Group (DAWG).  The DAWG is a cross-section of senior industry experts including fund managers, allocators, custodians, exchanges, lawyers, consultants and other service providers. This group is tasked with driving AIMA’s regulatory engagement, thought-leadership initiatives and operational guidance in the area of digital assets. It encourages thought-leadership across the alternative investment and digital asset industries and shares innovations with market participants and regulators to create a feedback loop that encourages the institutionalisation of digital assets. 

From the development of the proposed EU regulation on markets in cryptoassets to growing discussions around the appropriate classification and taxation of various digital assets by international standard-setting bodies and jurisdictions across the globe, regulatory scrutiny and investment interest in digital assets has never been greater.

AIMA members are increasingly looking at how digital assets may be incorporated into existing and new strategies. Members and the broader investment management industry are also looking closely at the potential opportunities and economic cases for incorporating various distributed ledger technologies (DLT) into their operational processes and how it may be used by markets, post-trade institutions, administrators, custodians and other service providers to create cost-efficiencies, enhance transparency and reduce risk.

Current work: 

In the European Union, the European Commission has proposed a new regulation on markets in cryptoassets (MiCA), designed to provide a comprehensive regulatory framework for digital assets in the EU.  The proposed MiCA regulation establishes harmonised requirements for issuers that seek to offer their cryptoassets across the EU and cryptoasset service providers wishing to apply for an authorisation to provide their services in the EU. The Commission has also proposed a pilot regime for market infrastructures that trade and settle transactions in financial instruments in cryptoasset form. The pilot regime, which allows for derogations from existing rules, will allow regulators to gain experience on the use of distributed ledger technology (DLT) in market infrastructures and for companies to test out solutions utilising DLT.

In the United Kingdom, the government has published a consultation on the UK’s approach to cryptoasset regulation, with a focus on stablecoins; and call for evidence on investment and wholesale uses. This represents the first stage in the government’s consultative process with industry and stakeholders on the broader regulatory approach to cryptoassets and stablecoins. It seeks views on how the UK can ensure its regulatory framework is equipped to harness the benefits of new technologies, supporting innovation and competition, while mitigating risks to consumers and stability. Additionally, the consultation document includes a call for evidence on investment and wholesale uses of cryptoassets, and the broader use of DLT in financial markets. Meanwhile, the Financial Conduct Authority has extended the end date of the Temporary Registrations Regime (TRR) for existing cryptoasset businesses to 31 March 2022. The TRR was established last year to allow existing cryptoasset firms that applied for registration before 16 December 2020, and whose applications are still being assessed, to continue trading.

In the United States, the Treasury's Financial Crimes Enforcement Network (FinCEN) has published a Notice of Proposed Rulemaking (NPRM) in the Federal Register proposing regulatory requirements on convertible virtual currencies (CVCs) and digital assets. If finalised, the NPRM would impose reporting and recordkeeping requirements on banks and money services businesses, including many virtual asset service providers, that facilitate transactions in CVCs and legal tender digital assets with self-hosted wallets and hosted wallets held in jurisdictions that are identified by FinCEN as primary money laundering concerns.

(Last updated: 29 June 2021)