The digital asset sector finds itself at an exciting and decisive crossroad. For years, the industry has been grappling with scattered approaches to rules and regulations. However, we are now at a point where defining clear regulatory parameters has become not just necessary but also feasible. The Blockchain Association has presented consensus-based market structure principles, devised from the insights of leading industry players, providing a roadmap for the future.
These principles have sprung from a collective effort and signify the industry’s evolution and the concentrated effort needed to establish substantial legislation and intelligent regulation. The principles address twelve vital areas, fundamentally acknowledging that customer protection and innovation are harmonious objectives rather than conflicting ones.
We advocate for uniform disclosures and solid protective measures, while ensuring that businesses have the freedom to innovate without unnecessary hindrances. This balanced stance extends to asset custody, where we favor protecting individuals’ rights to self-custody their assets and formulating lucid frameworks for institutional custody solutions.
A key component of our proposed framework is the differentiation between financial activities and other diverse applications of blockchain technology. Intelligent regulation should focus on actual financial risks without inhibiting innovation in non-financial applications of blockchain technology. This includes the treatment of non-custodial software, services, and smart contracts, which should not face the same regulatory demands as traditional financial intermediaries when they don’t hold user assets.
Our principles also address the urgent task of token classification. It is crucial to have transparent frameworks that differentiate between securities, commodities, and other digital assets. This clarity is vital for compliance and growth, especially as the market evolves and new token types appear.
Our framework acknowledges the worldwide reach of digital assets while enhancing U.S. competitiveness. We encourage easing cross-border transactions while keeping the U.S. markets appealing for investment and innovation. This includes the establishment of a single secondary trading market to improve liquidity and price discovery.
Developer protections form another essential aspect of the Blockchain Association’s principles. Open-source software developers should not face liability when their code is misused by independent actors. This protection is vital for preserving the innovation that propels our industry forward. Similarly, we underline the importance of network participation – safeguarding the ability of individuals and institutions to participate in activities like staking, voting, and peer-to-peer transactions on permissionless networks.
The consensus on these principles is significant as it sends a clear message to Congress and regulators that the industry is prepared for judicious regulation. We’re not seeking special privileges or regulatory exceptions. Instead, we’re suggesting unambiguous guidelines that safeguard consumers, promote innovation, and ensure U.S. competitiveness in a rapidly changing global market.
However, this window of opportunity won’t last forever. Market developments, election cycles, and global competition necessitate immediate action. The industry has proven its readiness to engage constructively with policymakers. We’ve demonstrated that we can find common ground on intricate issues and that we’re devoted to responsible innovation.
For our Congressional allies, regulators in Washington D.C., and those newly engaging with these issues, these principles prove that the industry is prepared for serious policy discussion. For industry participants, they represent a shared vision of responsible market structure. For everyone involved, they offer a path forward at a pivotal moment for the future of digital assets in the United States.
The task of implementing intelligent regulations and drafting and passing legislation remains. But with clear principles, industry alignment, and increasing policy sophistication on both sides, we have an unparalleled opportunity to get this right. We have a limited time to accomplish this, so let’s seize this moment.
