The top challenge facing the global crypto and digital asset industry in 2022 is the lack of regulatory clarity, highlighting its need for greater cross-border coordination of policy and regulation, according to a recent report.
Already in 2022, the industry has witnessed an increased focus on policy and regulation with banking, securities and tax laws as they apply to stablecoins, decentralized finance, non-fungible tokens and cryptocurrencies, including the on-going requirements for adherence to know-your-customer, anti-money laundering, and combating the financing of terrorism regimes, notes the report, conducted by Global Digital Finance (GDF), an industry membership body.
The priority, according to GDF, is greater than it has ever been for a measured approach to global policy and regulations, with the body calling on policymakers and agencies to further engage with the industry through its co-regulation model.
During the 2017 initial coin offering run, GDF says it convened the global crypto and digital assets sector in the development of taxonomies and codes of conduct. Since 2018, 10 GDF codes have been developed by global industry practitioners and have been held to account through a rigorous process of peer review, open to global public consultation, and in the full purview of agencies and regulators.
“For the third year running, our annual members survey cites ‘lack of regulatory clarity’ as a top challenge for the industry,” says Lawrence Wintermeyer, executive co-chair of GDF. “Against a heightened increase for crypto policy and regulation, we call on policymakers and agencies to further engage with the industry through the GDF co-regulation model.”
Beyond codes and standards, GDF notes that it has established a governance node for FinP2P, an open source decentralized private market digital securities network, following a pilot that engaged many of the world’s top financial institutions.
“We need an enabling environment that harvests the opportunities and mitigates the risks of crypto and digital assets,” says Greg Medcraft, a GDF board member, and the former director of the Organization for Economic Cooperation and Development and chair of the International Organization of Securities Commissions. “Innovation will depend on whether a jurisdiction’s environment creates barriers or opportunities and encourages engagement through the use of regulatory tools such as sandboxes and safe harbours. GDF’s co-regulatory approach will be more important than ever in the year ahead in terms of advocacy, standard-setting and education.”
