A collaborative project led by the Global Blockchain Business Council represents an unprecedented effort to analyze the technical and regulatory blockchain landscape.
On October 14, 2020, the Global Blockchain Business Council (GBBC) and the World Economic Forum released the 2020 Global Standards Mapping Initiative (GSMI), the first comprehensive effort to assess and map global blockchain standards. The GSMI synthesizes key blockchain data and trends, and provides action-oriented guidance for public- and private-sector stakeholders. Latham & Watkins provided legal and regulatory review for the project.
The GSMI comprises two component reports (Technical Overview and Legal & Regulatory Overview) and an interactive world map of blockchain and digital asset legislation, regulation, and guidance. The survey encompasses data aggregated from 185 jurisdictions, 379 industry groups, and more than 30 technical standard-setting entities. The blockchain and digital asset landscape is mapped across three distinct areas: (i) technical standards; (ii) legislation and guidance by sovereign and international bodies; and (iii) industry best practices and standards.
Regulatory findings across the 185 jurisdictions surveyed are organized into the following 10 themes:
- Consumer protection: Warnings issued to consumers, investors, and businesses concerning digital assets.
- Financial surveillance (anti-money laundering and counter-terrorism financing): Laws, guidance, and regulations established by sovereign bodies to ensure the legality of transactions conducted with digital assets.
- Regulation of digital assets (including securities and commodities regulation, and regulation of initial coin offerings (ICOs)): Regulatory and legislative tools used by governments to respond to the emergence of blockchain, digital assets, and ICOs.
- Taxation: Tax issues related to the use of digital assets, including trading and mining.
- Central Bank Digital Currency (CBDC): Digital currencies issued by central banks.
- Banking: Regulations on banks interacting with digital assets and digital asset businesses, as well as pilot projects in the banking sector.
- Ban on cryptocurrencies: Jurisdictions that have taken measures to ban cryptocurrencies.
- Sovereign strategies: Strategies implemented by jurisdictions to develop and implement blockchain technology nationally or regionally.
- Regulatory sandboxes: Frameworks implemented by regulators that allow financial technology firms and other businesses to conduct live experiments in a controlled environment and under a regulator’s supervision.
- Government projects: Uses of blockchain either for internal government use or government service delivery.
Key Regulatory Takeaways
Among the many insights to be found across the reports and interactive world map, some key insights related to regulation and standard-setting include:
- The fragmentation of regulatory approaches to blockchain technology, and the need to bridge traditionally siloed bodies of information, industries, and geographic barriers to promote functional frameworks
- The apparent overlaps, gaps, and conflicts in standard-setting, and where these gaps can benefit from increased cross-entity collaborations versus where such standard-setting activities may be premature (and stifling to innovation)
- The lack of dynamic or principles-based guidance by regulators for new uses of blockchain technology (rather than guidance issued specifically for digital assets)
- The critical need for regulators to understand the attributes of blockchain technology, and the important role regulators will play in shaping the future of the technology through crafting relevant standards
- The need for regulators to foster and take advantage of regulatory sandboxes and innovation hubs to create more effective regulations