The World Economic Forum advocates international regulation of cryptos

The World Economic Forum (WEF) has released a white paper for governments and the crypto industry. The document contains recommendations on the regulation of cryptos. He stresses the need for cooperation to regulate the crypto sector as soon as possible. Discover the essential content of the WEF white paper.

WEF recommendations to better regulate the crypto sector

At a time when crypto regulation in the United States is raging, the WEF offers a series of recommendations in collaboration with its consortium for the governance of digital assets. The new document was designed after careful analysis of existing regulatory approaches. It indicates that jurisdictions around the world and the new industry must cooperate to regulate crypto-assets. This coordination will avoid regulatory arbitrage and ambiguity, while ensuring consistency and clarity.

The WEF cited several challenges in crypto regulation. Among these is the presumption of “same activity, same rules“. The organization explained:Crypto-assets and their ecosystem do not always fit neatly into the existing activity-based and intermediary-centric approach to regulation, even when crypto-asset activities mirror those of the traditional financial sector“.

The authors of the document added:As these new technologies start from a position of transparency, it is possible to imagine even better regulatory tools to address cross-border concerns.“.

The WEF highlights several types of regulatory frameworks

The WEF has identified several types of existing regulatory frameworks for cryptos around the world. He cited outcome-based regulation, which follows the principle of “same risk, same regulatory outcome“. Then he talked about risk-based regulation, agile regulation, and regulation through enforcement.

The WEF highlighted that the Swiss Financial Market Supervisory Authority adopt agile regulations. Meanwhile, the United States is unique in having implemented regulation through law enforcement. At the same time, Switzerland and Japan favor self-regulation and co-regulation.

The WEF clarified that the United States is not taking the right approach to regulating cryptos. He stated: “This approach is not recommended for developing a framework, as “regulation by enforcement” precludes any serious discussion of what should be regulated and what should not.“. Recall that the US Chamber of Commerce previously denounced the SEC’s crypto regulatory policy.