The report found that a lack of standard terminology across regulators and jurisdictions is hampering a coordinated global regulatory response.
The “Global Cryptoasset Regulatory Landscape Study” was conducted by the Cambridge Centre for Alternative Finance with the support of Japan’s Nomura Research Institute (NRI). The report, based on an in-depth analysis of 23 jurisdictions, aims to provide a practical and analytical tool for regulators, market participants, and other stakeholders in the cryptoasset ecosystem.
“Our hope is that this global comparative analysis of cryptoasset regulation will highlight coverage gaps in regulatory frameworks and enable individual regulators to benchmark their own regulatory approach in the context of the global cryptoasset regulatory landscape,” wrote Dr Robert Wardrop, Director Cambridge Centre for Alternative Finance, in his introduction to the report.
The 23 jurisdictions covered in the report, selected for their prominence in the global cryptoasset sector, include: Abu Dhabi, Australia, Bermuda, Canada, China, the European Union, Estonia, France, Germany, Gibraltar, Hong Kong, India, Israel, Japan, Malta, Mexico, Russia, Singapore, South Korea, Switzerland, Thailand, the United Kingdom, and the United States of America.
Key Findings and Highlights
• The lack of standard terminology for cryptoassets across regulators and jurisdictions hampers a coordinated global regulatory response.
• The most sophisticated regulatory frameworks are found in countries with a less rigid attitude towards financial regulation and a low level of domestic cryptoasset activity. In contrast, 47 percent of jurisdictions with a high level of domestic cryptoasset activity have adopted a “retrofitting” approach to regulation – amending existing laws and regulations in order to bring cryptoasset activities under the scope of existing laws.
• The vast majority of examined jurisdictions (82 percent) have distinguished cryptoassets that exhibit characteristics of a security from other types of cryptoassets. Consequently, activities dealing with cryptoassets that qualify as a security are automatically brought under the ambit of securities law.
• Regulators have primarily focused their attention on initial coin offerings (ICOs) and exchange trading – functions that resemble well-understood activities in traditional financial markets. Consequently, other key activities specific to cryptoassets, such as alternative token distribution mechanisms (e.g. airdrop, fork) and the creation of cryptoassets through mining, have been overlooked. This may have significant impact depending on how the cryptoasset market develops.
The Stakes Are High
“Stakeholders operating in financial markets are beginning to realise that the adoption of cryptoassets in volume is likely to have profound implications for both financial market infrastructure and the relationships between market participants. The stakes are high for both market participants and regulators,” added Dr Wardrop.