The World Economic Forum (WEF) released the white paper titled “Pathways to Crypto-Asset Regulation: A Global Approach” in May 2023. Since then, the WEF has continuously updated its findings to keep pace with how various countries and economic regions address the challenges posed by the introduction of cryptocurrencies.

1. Why Does the WEF White Paper Advocate for a Global Framework for Cryptocurrency Regulation?

As data policy and blockchain expert Arushi Goel notes, “Regulating this ecosystem (crypto assets) is like walking a tightrope—balancing the prevention of harm, protecting users, and fostering innovation is a delicate act.”

In recent years, the cryptocurrency industry and the potentially transformative technology behind it have grown rapidly. As the borderless nature of crypto assets clashes with traditional economic and social order, the need for a unified regulatory framework has become apparent. However, this also presents numerous challenges.

2. Challenges Facing Global Cryptocurrency Regulation

• Different jurisdictions have inconsistent definitions, classifications, and tax treatments for crypto assets. This often confuses crypto traders due to misunderstandings of key concepts and systems, leading to an incomplete grasp of financial risks.
• Arbitrage involves buying cryptocurrency from one entity and almost immediately selling it to another. The goal is to profit from price differences between jurisdictions with different regulations and independently developed financial frameworks. This poses a headache for regulators in different jurisdictions, who must apply varying tax laws and legislative standards to such transactions. This further hinders the development of comprehensive regulation for the crypto ecosystem.
• Inadequate coordination among multiple enforcement agencies hampers oversight and management of the crypto industry, obstructing the establishment of a coherent and consistent regulatory framework.

3. Progress Since the Release of the WEF White Paper

In response to the aforementioned challenges, some countries and regions have attempted to develop regulatory frameworks for crypto assets, achieving varying degrees of success. See the details in the chart below.

4. Regions Making Strides in Cryptocurrency Regulation

The World Economic Forum highlights the following updates on cryptocurrency regulation across various countries and regions since the release of their white paper:

4.1 Developments in U.S. Cryptocurrency Regulation

While the WEF notes that U.S. cryptocurrency regulation has currently hit a standstill, there have been significant milestones:

• The Blockchain Regulatory Certainty Act was reviewed by the House Committee starting in July 2023 and was officially published in September 2023.
• The U.S. House of Representatives passed the Financial Innovation and Technology Act (FIT21) in May 2024.

4.2 Developments in EU Cryptocurrency Regulation

• In June 2023, the EU rolled out MiCA (Markets in Crypto-Assets Regulation), becoming the first region to implement a comprehensive cryptocurrency regulatory framework.
• The European Securities and Markets Authority (ESMA) completed a three-month public consultation on MiCA implementation by the end of April 2024.
• The EU plans to fully integrate MiCA into its regulatory framework by December 2024. Starting January 2026, all cryptocurrency trading service providers will be required to verify and disclose the identities of both the original sender and the recipient of every transaction, regardless of the amount.

4.3 Developments in UK Cryptocurrency Regulation

• Entities looking to engage in cryptocurrency transactions must register with the Financial Conduct Authority (FCA), while the Bank of England (BoE) has taken a strong stance on stablecoin regulation.
• The BoE believes these new regulations will enhance convenience for UK consumers and help prevent financial crime.

4.4 Developments in Cryptocurrency Regulation in Asia

Asian countries are taking diverse approaches to cryptocurrency regulation:

• Japan has recognized cryptocurrencies as legal tender and recently introduced identity verification rules for exchanges to combat money laundering.
• South Korea enacted the Virtual Asset User Protection Act, which aims to improve the safety of cryptocurrency transactions, effective from July 19, 2024.
• India lifted its ban on cryptocurrency trading in 2020, but regulatory progress has since slowed. Nevertheless, the Cryptocurrency and Official Digital Currency Regulation Bill shows promise.

In South America, Brazil implemented new cryptocurrency regulation measures in June 2023.

Disclaimer：

1. This article is reprinted from [Golden Finance]. All copyrights belong to the original author [TaxDAO]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.