- They have analyzed different types of regulation
- And recommend a flexible approach
- The WEF considers Switzerland and Japan to be good examples
- The United States to be bad
The World Economic Forum has issued a technical paper designed to regulate cryptoassets.
The Digital Currency Management Consortium (a division of the WEF) was involved in its development.
The document begins by saying that crypto-assets need urgent regulation. In doing so, cooperation between different countries and institutions is key.
At the same time, the WEF does not share the idea of one common regulation.
They believe that cryptocurrencies cannot be equated with other financial assets and apply similar laws.
Such regulation is complicated by cryptobusinesses, anonymous wallets and decentralized exchanges.
In the meantime, the growing dependence between traditional and digital finance “increases the risks of contagion from the crypto industry.”
The WEF analyzed several types of regulation from different countries. And they suggest a flexible approach – following the example of Switzerland and Japan.
“A flexible, iterative approach means that policy and regulatory development is no longer limited to governments, but is increasingly a multilateral effort.”
A flexible approach to regulation means that not only government is involved in making laws. Industry, business and the public should act there.
The WEF cited the U.S. as a bad (inflexible) example of regulation.