The digital asset ecosystem is no longer the wild west it once was. It becomes more mature, safer, and can bring more benefits as it becomes more regulated. This is the same process that many technologies go through when they become “part of the inventory.” Using these networks will become second nature as many people won’t think twice before using the Global Positioning System (GPS) to navigate a city they’ve never been to before.
A range that can no longer be ignored
In November 2021, the digital asset ecosystem hit record highs with market capitalization in excess of $ 3 trillion. The benefits of this new technology – such as increased speed, accessibility and transparency – are too great to be ignored. At the same time, the potential threats are well known – especially those related to cybersecurity and criminal activity.
The first big announcement came from the United States of America (USA). In March, the Biden administration announced an implementing regulation for responsible development of digital content. It is a well-worded policy document that clearly identifies the potential benefits and risks of digital content. It will then commission various federal agencies to study and make recommendations on how the United States can continue to “play a global leadership role in the growing development and adoption of digital assets and related innovation” and “defend some of the key threats that justify the evolution and adaptation of the approach. “Required by the US government for digital content.”
In order not to be left behind, the UK Treasury has announced its intention to make Britain a ‘global crypto hub’. While details are few, early initiatives include “financial markets infrastructure sandbox legislation to help companies innovate”, a two-day “CryptoSprint” event chaired by the Financial Conduct Authority (FCA) in May 2022, in partnership with the Royal Mint on Non Fungible Token (NFT) and a group committed to working more closely with the industry. ”
Finally, the Crypto Asset Markets (MiCA) proposal goes through various working groups in the European Parliament. While the actual wording of this proposal is constantly updated, as it progresses, it will eventually be reviewed by Parliament, the European Commission and the Council of Europe to provide the EU with a unified framework for regulating digital assets.
Governments treat new technologies differently
Each government will take a slightly different approach depending on its own political structure, the level of development of the digital asset industry in their country, and other political imperatives. This approach may take some time to develop and evolve over time. This is no different from previous waves of technological change. In the 1840s, the railways of Great Britain took a series of legislative measures to raise safety standards for carriages and railroads. Vehicle safety also improved in the United States, thanks in part to the work of Ralph Nader in the 1960s.
The latest great wave of technology, the internet, continues to evolve. One aspect of internet governance – data protection and privacy – is handled very differently in the United States. In the absence of federal digital privacy laws, to the European Union and its General Data Protection Regulation and Directive (GDPR). It didn’t happen overnight – it took two decades to develop and implement the GDPR. Another example is the way freedom of speech is regulated on the Internet. Section 230 of the US Communications Decency Act provides online service providers with a safe haven from liability related to the behavior of their users on their platform. This principle was introduced in the 1990s and is one of the reasons why many social media companies are based in the US. In turn, the EU’s Digital Services Act is a relatively new initiative that will not leave the EU apparatus until 2024, approximately 30 years after the launch of the commercial internet.
The digital asset industry can be many
For years, a recurring question about digital content has been, “What happens when” the government “bans it?” It turns out that there are many governments – but none decides how new technology is used around the world. This is especially true of open source software in an internet-connected world. Many governments, far from banning digital content, are trying to be “home” to companies using this technology. Governments that manage to find the right balance between politicians will be home to a new wave of technological change – and related jobs, tax revenues and prosperity.
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