CDS Crypto News The World Economic Forum Publishes a White Paper on Crypto Asset Regulation Proposals
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The World Economic Forum Publishes a White Paper on Crypto Asset Regulation Proposals

A new white paper has arrived from The World Economic Forum.

The World Economic Forum Publishes a White Paper on Crypto Asset Regulation Proposals

In order to promote collaboration between international organizations, regulators, and the cryptocurrency industry, the World Economic Forum (WEF) examined several regulation options.

The World Economic Forum Publishes a White Paper on Crypto Asset Regulation Proposals

With the help of its Digital Currency Governance Consortium, the World Economic Forum has published a white paper on regulating crypto assets. Cooperation is essential, the report found, and regulation is urgently needed.

The study suggested that in order to avoid ambiguity, regulatory arbitration, and inconsistent enforcement, global coordination is required for crypto asset regulation. The authors cited several obstacles to regulating crypto assets, such as the notion that “same activity, same regulation,” saying:

Crypto-assets and their ecosystem do not always fit squarely into the existing activity-based, intermediary-focused approach of regulation, even where crypto-asset activities mirror those of the traditional financial sector.

What is Covered in the White Paper?

For purposes of comparison, the article generated several regulatory framework classifications. Both outcome-based regulation, which is defined as “same risk, same regulatory outcome,” and risk-based regulation, in which the degree of regulatory involvement depends on the level of risk associated with the activity, were taken into consideration.

As an example of a responsive regulator, the Financial Market Supervisory Authority of Switzerland was cited. Examples of self- and co-regulation were given for Switzerland and Japan. It was observed that regulation through enforcement originated in only the United States. The writers stated:

This approach is not recommended to build out a framework, as ‘regulation by enforcement’ precludes any meaningful discussion of what should and should not be regulated.

Recommendations in the White Paper

The paper offered three general recommendations to the crypto industry, regulatory agencies, and international organizations. First of all, it placed a focus on sharing and coordinating best practices. Secondly, to achieve uniformity and clarity, policymakers and industry stakeholders must work together across countries, according to the authors. Finally, it is feasible to envision even better regulatory instruments to handle cross-border problems because these new technologies begin from a position of transparency.

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Lectertodd is 25 years old. She graduated from Çankaya University, Department of Psychology, in 2021. She actively works as a writer, translator, and editor for various websites. Moreover, she loves reading, researching, and learning new things.

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