Forbes India | Shashank Bhardwaj | May 26, 2023
The World Economic Forum has released a study scrutinizing the different regulatory methods applied to the cryptocurrency sector, in addition to offering guidance to both governmental bodies and industry participants.
- Navigating Regulatory Challenges:
- The World Economic Forum (WEF), in collaboration with its Digital Currency Governance Consortium, released a comprehensive paper emphasizing the pressing need for global regulatory consistency in the cryptocurrency sector.
- This report emphasizes that the crypto industry’s unique characteristics and potential risks don’t always align with traditional financial regulatory models, thereby demanding novel, flexible approaches.
- Advocacy for Agile Regulation:
- The paper supports the implementation of “agile regulation,” which encompasses a responsive, iterative approach, with multi-stakeholder input, such as regulatory sandboxes, guidance, and no-objection letters.
- It indicates that such an approach, already in place in regions like Switzerland and Japan, is more effective than a regulation-by-enforcement strategy as employed by the United States.
- Urging Cross-Jurisdictional Collaboration:
- Stressing the necessity for international cooperation and knowledge sharing, the paper strongly recommends policymakers and industry stakeholders to work in tandem across jurisdictions. The authors argue that the inherent transparency of blockchain technologies could enable more efficient and effective regulatory tools to address cross-border concerns, thereby creating a more stable and predictable crypto asset ecosystem.
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