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There has been a whirlpool over the landscape of blockchain and crypto assets in the last few months, for good reason. Bankruptcy and scandals are buzzing with melodramatic regularity, following a breathtaking surge in prices of almost every crypto asset in the market where the new crypto winter has begun. Many investors have lost either large quantities, or have gone bankrupt to wait for this bear market to come out, and policy makers are constantly under pressure to take action and act swiftly. increase.
Investors, politicians, and the media frenzy over this cryptocurrency have driven action and repeatedly called for a global standard on how crypto assets should be treated.Following the recent (possibly temporary) failure of a bill containing a similar global policy Corporate taxHowever, it seems worthwhile to double-check what the global crypto asset policy really means. On the surface of the idea, globally consistent policies built on consensus and consensus by all involved countries have proven difficult (so far) to regulate at the nation-state level. Sounds like an almost utopian solution for governing your sector.
However, a closer look at such ideas reveals that there are some important considerations that need to be evaluated before proceeding.
Vested interests take precedence. A regulatory paradox that is often overlooked in mass media conversations, but what is clear when recognized is the fact that larger and more well-established organizations (incumbents) tend to look at regulations most aggressively. is. Larger and more established organizations, in any industry, tend to have the personnel, financial resources, and legal expertise to successfully navigate almost all of the regulatory changes and obligations imposed. However, SMEs, start-ups and entrepreneurs looking to enter the industry are not well prepared to cope with such changes.
The global regulatory framework being developed will always include a large amount of cooperation from the largest and most influential organizations in the field of financial services. These exact same companies are also the ones most likely to discourage startups and competition, and will probably lobby from the regulations that are most favorable to them.
This is neither evil nor unethical. And that’s what the fiduciary duty management team is trying to do. That said, it also opposes the development of existing global top-down influenced frameworks.
Inflexible.. Another negative implication of a global regulatory framework is that such a framework is inherently inflexible by its nature. This is due to two different, but related reasons. First, any kind of update or modification needed to respond to new market changes will almost certainly need to be approved by a majority or at least multiple initial signatories. Anyone who has a rough idea of decision-making, or even an awareness of policy-making in general, needs to understand that reaching such a consensus is a difficult, if not impossible, task.
The vulnerability will eventually lead to a set of workarounds, compromises, and half-hearted solutions that will have little benefit to the ecosystem, as always, and will be implemented ad hoc to encourage action instead. increase. In such a regulatory framework, exemptions, inconsistent enforcement, and explicit disregard of the rules will inevitably be subject to varying degrees.
Top-down solutions may seem simple at first, but over time they become more problematic due to the large number of buy-ins needed for future changes.
Deprive voters of their authority. The most worrisome thing about global regulation and regulatory frameworks is that it simply puts voters from different countries (election of civil servants to represent their interests) under the control of influential individuals and committees. It is a fact. Depriving the country as a whole in such a way is a dangerous way down, leading to dissatisfaction with what has been produced (of course), trying to undermine enforcement and campaigning anti-globalization. It may even empower a particular politician or political party to do. Global platform.
In addition, this also leads to the deprivation of regulatory authority in countries that fall under this regulatory structure. Under such circumstances, it would be reasonable to ask – what is the point of the national cryptographic regulator in the face of such a global framework? These exact questions were asked during the entire existence of the European Central Bank (ECB) and the role left in the central banks of member states (for example). Global cryptographic regulation system.
Global coordination and rulemaking are aspects of the global industry or economic sector, and the crypto industry is no exception to this rule. With dramatic changes in volatility and emotions, the demand for globally consistent and comparable rules is only increasing. Rules, and more importantly, consistent rules, are needed for every sector to grow, mature, and become more widely adopted. Cryptographic rules should be the result of nation-state cooperation that brings together regulators, investors and policy makers, rather than a top-down framework mandated without accountability and transparency. Others are inflexible and ineffective rule recipes that are detrimental to all market participants.
