Introduction
This first brief evaluates the current state of play in the digital finance world, where crypto assets enable a wide range of financial transactions and services executed on public blockchains.
Activity is growing rapidly and largely outside the regulatory perimeter, in part because many regulators across the globe have been slow to engage and respond. In the US, the recent executive order by President Biden recognized that the status quo was unacceptable: too few steps were being taken in the public sector to support these innovations and enable them to operate safely within the regulatory perimeter.
The collective goal must be to:
- Put in place a legal and regulatory regime that promotes safety and resilience while allowing the new technologies and business models to develop and experiment, succeed, or fail.
- Coordinate with international standard-setting bodies to minimize the inefficiencies that comes with regulatory fragmentation and to limit the opportunities for regulatory arbitrage.
