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WEF Proposes Cooperative Approach for Effective Crypto Regulation Amidst US Regulatory Debate

wef proposes cooperative approach for effective crypto regulation amidst us regulatory debate 2

Amidst the ongoing debate surrounding crypto regulation in the United States the World Economic Forum (WEF) has put forward a series of recommendations in partnership with its digital asset governance consortium . The WEF’s recently released document emphasizes the need for jurisdictions worldwide and the emerging crypto industry to work together in order to regulate crypto-assets effectively . This collaborative approach aims to prevent regulatory arbitrage, eliminate ambiguity and establish consistency and clarity in the evolving crypto landscape .

Challenges Highlighted in Crypto Regulation

The WEF identifies several challenges associated with regulating cryptocurrencies . One key challenge is the notion of “same activity, same regulations .” The organization highlights that crypto-assets and their ecosystem do not always neatly align with existing activity-based and intermediary-centric regulatory approaches even when their functions mirror those of the traditional financial sector . The authors of the document propose that the transparency inherent in these new technologies opens up opportunities for the development of improved regulatory tools to address cross-border concerns .

wef proposes cooperative approach for effective crypto regulation amidst us regulatory debate

Examining Existing Regulatory Frameworks for Cryptocurrencies

The WEF outlines various existing regulatory frameworks for cryptocurrencies across the globe . These include outcome-based regulation which follows the principle of “same risk, same regulatory outcome .” Additionally risk-based regulation, agile regulation and regulation through enforcement are discussed . The Swiss Financial Market Supervisory Authority is noted for adopting agile regulations while the United States stands out for its enforcement-based approach . Switzerland and Japan on the other hand favor self-regulation and co-regulation methods .

Concerns Over US Approach to Crypto Regulation

The WEF expresses reservations about the regulatory approach taken by the United States particularly its heavy reliance on regulation through law enforcement . The organization argues that such an approach is not conducive to developing a comprehensive regulatory framework as it hinders serious discussions about what should and should not be regulated . It is worth noting that the US Chamber of Commerce has previously criticized the Securities and Exchange Commission (SEC) for its crypto regulatory policy .

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