The digital asset industry has expanded across the world, revolutionizing global finance options for millions. While the boundaries have expanded, the regulatory landscape remains fragmented. As well as evaluating economic incentives, companies now look at the regulatory and political sentiments when deciding on new business development opportunities.
THREE REGULATORY POWERS
If we talk regulation, the EU, the UK, and the U.S. are the three powers controlling the space. The EU has been the first mover with its Markets in Crypto Assets Regulation (MiCA). While already marked as the global standard setter, it is far from being one. The UK has taken a different approach with its consultation and call for evidence on the future financial services’ regulatory regime for crypto assets, a move that can be considered as setting up for competition with the EU. Among the three jurisdictions, the U.S. is currently a watcher. It is yet to pass any comprehensive piece of legislation on crypto assets, with the Securities and Exchange Commission (SEC) taking the lead by “regulating through enforcement.” The ongoing lack of regulatory clarity or roadmaps has made many in the industry and Congress skeptical of the U.S.’s position in the space, with some raising concerns about the industry offshoring.