This article examines the challenges and regulatory hurdles faced by Facebook’s Libra project, as discussed by Avtar Sehra and Jannah Patchay. Libra, a stablecoin initially proposed by Facebook (now Meta), aimed to create a global digital currency but quickly faced scrutiny over privacy, monetary sovereignty, and financial stability. Sehra and Patchay note that regulatory concerns largely stem from Libra's potential impact on national currencies and the stability of financial systems. They suggest that while Libra raised awareness of the need for digital money, its challenges underscore the importance of regulatory clarity, stable infrastructure, and a collaborative approach in developing global digital currencies.

Jannah Patchay explores how crypto-assets have gained traction, particularly in Europe, where 2019 marked a turning point as financial regulators and market infrastructures, such as Switzerland’s SIX Exchange and the London Stock Exchange, began embracing blockchain-based tokenisation. The article categorises crypto-assets into exchange, security, and utility tokens, with security tokens at the forefront due to their regulatory structure, appealing to institutional investors. Yet, challenges persist, notably regulatory hurdles in primary issuance and liquidity limitations for security tokens. Experts discuss the path forward, highlighting collaboration and innovation as critical to bridging traditional finance with the crypto landscape, setting the stage for a future of seamless digital finance.

Jannah Patchay of Markets Evolution argues that now is the time to address global crypto-asset regulation, particularly as MiFID III looms. While crypto-assets are often equated with Bitcoin, they encompass a diverse range of digital instruments beyond cryptocurrency. Regulators like the UK’s FCA and ESMA have classified these assets into exchange, security, and utility tokens, each with different regulatory implications. Yet, most exchange tokens, used heavily for investment, remain unregulated, raising concerns about market abuse and investor protection. Patchay highlights a need for tailored regulation, which may mean establishing a new framework specifically for exchange tokens to address their unique risks and characteristics in the financial system.

Brexit is on the horizon, and for the financial markets, the uncertainty is palpable. The UK's exit from the EU leaves firms with tough choices: set up EU subsidiaries, establish branches in member states, or navigate the complexities of cross-border services. While an equivalence agreement could smooth the transition, political obstacles loom large. With the clock ticking, many firms are already re-evaluating contracts and restructuring operations, bracing for the changes ahead.

MiFID II has arrived, stirring predictions of market turmoil and uncertainty. Now that it's in effect, the focus shifts to what’s next. Rumours suggest work on MiFID III may already be underway, likely involving targeted regulatory guidance rather than sweeping reforms. Key areas under scrutiny include the definition and identification of derivatives for trade transparency, as current implementation has faced significant challenges. The unexpected adoption of the Systematic Internaliser (SI) regime by many banks will also draw regulatory attention. The evolving political landscape, especially in light of Brexit, adds further complexity to future regulatory decisions.

As Brexit approaches, the future of financial markets hangs in uncertainty. While the UK's regulatory alignment with the EU suggests that an initial two-way equivalence determination could be straightforward, political realities and shifting EU priorities complicate the picture. Recent moves, such as proposed restrictions on MiFID equivalence, signal the EU’s desire for tighter control over financial services provided to EU clients. This evolving stance suggests that equivalence may not offer the smooth transition many had hoped for, leaving firms to navigate an uncertain regulatory landscape.