Launchy Regulatory Roundup #65 - IMF Warns USD Stablecoins Threaten Weak Currencies

📢 Sponsor | 💡 Telegram | 📰 Past Editions

Good Morning.

Welcome to our 65th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

In Today's Edition:

• Headline: IMF Warns USD Stablecoins Threaten Weak Currencies 👀 

• Global Legal Roundup

• Case Study: TradFi vs Crypto Split on Tokenization 🔎 

You read and share. We listen and improve. Send us feedback at [email protected].

HEADLINE

IMF Warns USD Stablecoins Threaten Weak Currencies

State of play: The IMF warns that dollar-backed stablecoins could speed up currency substitution in countries with weak monetary systems. The easy cross border use may push USD stablecoins favoritism over local currencies, reducing central bank control.

• The report notes that USDT and USDC have tripled to $260B since 2023, with Asia leading global usage and the highest relative adoption seen in Africa, the Middle East and Latin America.

Stablecoins can widen financial access, but the IMF highlights major risks.

• These include runs on issuers, reserve asset volatility, weakened capital controls, and difficulties tracking cross border flows.

• Regulation remains fragmented across major markets.

• The IMF says stablecoins are here to stay, but global coordination is needed to prevent instability and unchecked currency substitution.

What’s Next: Expect tighter global rules on stablecoins and more moves from emerging markets to protect their local currencies.

Why it Matters: Dollar stablecoins are becoming the escape hatch in weak economies. If that keeps growing, central banks lose control fast.

Our Take: People choose stablecoins because their own money fails them. Fix the currency first and the substitution problem fades.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Citadel asks SEC to regulate DeFi protocols as exchanges.

• 🇺🇲 US prosecutors push for 12-year prison sentence for Do Kwon.

• 🇺🇲 CFTC's Pham announces regulated crypto spot trading has arrived.

• 🇺🇲 SEC sends warning letters to ETF issuers targeting untamed leverage.

• 🇺🇲 US FDIC to propose GENIUS Act implementation framework this month.

Europe:

• 🇬🇧 UK considers ban on crypto donations to political parties.

• 🇬🇧 UK passes law officially recognizing crypto as third kind of property.

• 🇮🇹 Italy warns crypto firms to meet year-end MiCA deadline or shut down.

• 🇵🇱 Poland is now the EU’s sole MiCA holdout after its crypto bill veto stayed.

• 🇪🇺 International operation busts crypto fraud network that laundered $815M+.

APAC:

• 🇹🇼 Taiwan eyes 2026 stablecoin launch as crypto legislation advances.

• 🇰🇷 South Korea to impose bank-level liability on crypto exchanges.

• 🇰🇷 South Korea pushes for draft stablecoin bill by Dec. 10 deadline.

• 🇰🇷 South Korea's ruling party issues ultimatum on stalled stablecoin bill.

• 🇯🇵 Japan government backs 20% tax on crypto profits, on par with stocks.

CASE STUDY

TradFi vs Crypto Split on Tokenization

State of play: At an SEC Investor Advisory Committee meeting, major players from Citadel Securities, Coinbase, Galaxy and BlackRock debated how tokenization should be regulated.

• The discussion highlighted a clear split between traditional finance and crypto.

• TradFi firms urged the SEC to treat decentralized protocols as intermediaries in tokenized equity markets and avoid giving DeFi broad exemptions.

• Crypto leaders pushed back, arguing that decentralized systems cannot comply with broker style obligations without undermining their core design.

• BlackRock noted that the range of perspectives shows there is no single solution.

• Paul Atkins signaled support for creating compliant pathways for innovation.

Our Take: Trying to treat DeFi like a broker won’t work. The answer isn’t squeezing it into old rules. It’s building a framework that actually fits how decentralized systems operate.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Omid Malekan’s read on Stop Being A Simp to the Suits.

• Jake Chervinsky’s read on Market Structure Bill Update.

• Solana Policy Institute’s read on Tokenization of US Equities.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.