2024年数字资产监管-41正式版

DigitalAssetsRegulation:InsightsfromJurisdictionalApproachesINSIGHTREPORTOCTOBER2024Images:GettyImagesContentsPreface34ExecutivesummaryIntroduction51Regulatoryapproaches,outcomesandunintendedconsequences1.1EuropeanUnion1.2Gibraltar79111214161820222326271.3HongKongSAR,China1.4Japan1.5Singapore1.6Switzerland1.7UnitedArabEmirates1.8UnitedKingdom1.9UnitedStatesofAmerica2Recommendations2.1Anti-moneylaundering(AML)andknowyourcustomer(KYC)recommendations2.2Regulatoryandtechnicalsandboxrecommendations2829303132352.3Decentralizedfinance(DeFi)recommendations2.4PrivacyandsecuritypolicyrecommendationsConclusionContributorsEndnotesDisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.©2024WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.DigitalAssetsRegulation:InsightsfromJurisdictionalApproaches2October2024DigitalAssetsRegulation:InsightsfromJurisdictionalApproachesPrefaceAstheadoptionofdigitalassetscontinues,2024marksapivotalmomentforthegloballandscapeofdigitalassetregulation.AsofearlySeptember2024,thetotalmarketcapitalizationofcryptocurrencies,onetypeofdigitalasset,wasvaluedat$2.01trillionandstablecoinscomprised8.5%ofthismarket,Althoughtherehasbeenrecentprogressindigitalassetregulation,countriesaretakingdivergentapproachesandhaveestablisheddifferenttimelinesforcreationandimplementation.Eachjurisdictionisdevelopingregulationsbasedonuniquegoalsandobjectives,whichrisksalackofcoordinationglobally.amountingto$171billion.Whenitcomestothe1statusofregulationglobally,accordingtoarecentBankforInternationalSettlements(BIS)survey,two-thirdsofthe86jurisdictionssurveyedwereorwillWiththesevaryingapproaches,itisimperativethatstakeholderscollaboratetoforgeasecureandequitableregulatoryenvironment.Thisnecessitatesthesharingoflearningsfromglobalregulatoryexperiments,identifyingbothsuccessfulpoliciesandshortcomings.Theanalysiscontainedinthisreportaimstohighlightthesecriticalregulatoryinsights,enablingpolicy-makersandregulatorstocrafteffectiveandharmonizedframeworksthatpromoteinnovationwhilesafeguardingstakeholders.Astheglobaleconomynavigatesthecomplexitiesofdigitalassets,thereportendeavourstocontributeaclearandimpartialperspectiveontheevolvingregulatorylandscape.soonberegulatingdigitalassets.Themaingoalsof2implementingregulationaretoprotectinvestorsandconsumersandmaintainfinancialstability.Asregulatorydevelopmentscontinue,countriessuchasAustralia,theUnitedKingdom,BrazilandSouthKoreahavethisyearcommittedtounveilingnewregulatoryframeworks.Inaddition,thefullrolloutoftheEuropeanUnion’sMarketsinCrypto-Assets(MiCA)regulationispoisedtosetaprecedentforcomprehensivedigitalassetoversight.DigitalAssetsRegulation:InsightsfromJurisdictionalApproaches3ExecutivesummaryThisreportanalysesdigitalassetregulationinseveraljurisdictionstoidentifyuniqueapproachesandprovideinsightstopolicy-makersandprivate-sectorparticipants.Thereisaneedforclearguidelinesinthefast-evolvingdigitalassetsindustry.Thisreportprovidesacloseanalysisoftheregulatoryframeworksinninejurisdictionsandtheiruniqueapproachestopolicycreationandimplementation.TheworkbuildsonpreviousresearchundertakenbytheWorldEconomicForumondigitalassetregulation,whichestablishedafoundationtofurtherexplorethejurisdiction-specificapproachesdetailedinthisnewreport.laundering(AML)andknowyourcustomer(KYC);regulatoryandtechnicalsandboxes;decentralizedfinance(DeFi);andprivacyandsecurity.Thesesubjectssurfacedasthemostpressingduringtheassessment,standingoutastheindustry’smostprominentissuesatthistime.Drawingonthisjurisdictionalandtopic-specificanalysis,thereportoffersasetofrecommendationsforbothpublic-andprivate-sectorstakeholders,categorizedbyissueassummarizedbelow.Byexaminingninejurisdictions,thereportdrawskeylessonsfromeachapproachandrevealstheunintendedconsequencesthatmayresultfromdifferentregulatoryframeworks.Theninejurisdictionsareleadingeconomiesfordigitalassetactivityandregulationimplementation–theEuropeanUnion;Gibraltar;HongKongSAR,China(HongKong);Japan;Singapore;Switzerland;theUnitedArabEmirates;theUnitedKingdom;andtheUnitedStates.Theanalysisenablesleaderstotakeajurisdictionalviewofboththepotentialadvantagesandthedisadvantagesofimplementingcertainpolicies.–AMLandKYC:BuildingonexistingAML/KYCfoundations,focusingontheadoptionoftechnology-enhancedsolutions,globalcooperation,andtrainingandcomplianceprogrammes,tohelpcreateamoresecuredigitalassetslandscapeinthefuture.––Regulatoryandtechnicalsandboxes:Implementingclearsandboxobjectivesandsupportmechanismsandenablingthecollaborativeparticipationofdiverseandbroadnetworksinsandboxenvironments.Thisinvestigationofeachjurisdictionnotonlyenhancestheunderstandingofthedirecteffectsofregulatorymethodologiesbutalsoprovidescontextforpredictingupcomingtrendsandpreparingforpotentialchallengesintheevolvingdigitalassetslandscape.Throughsuchanalysis,policy-makersandregulatorscananticipatetheimpactsoftheirdecisions,betterenablingthemtobuildandimplementregulationsthatareinlinewiththeirintendedgoals.DeFi:PrioritizingtheneedforriskmitigationandtransparencyaswellastailoredlicensingmodelsandcleardefinitionstorefinetheseregulationsinacontrolledsettingwithoutcompromisingtheuniquenatureofDeFianditstechnologicaladvancements.–Privacyandsecurity:Underscoringtheneedforstrongdataprotectionpoliciesthatprioritizetheconsumerandincluderegularsecurityauditsandcompliancecheckstosafeguardpersonalandfinancialinformation.Acrosstheseninejurisdictions,thereportexaminesfourkeyindustrytopics:anti-moneyDigitalAssetsRegulation:InsightsfromJurisdictionalApproaches4IntroductionTheglobalregulatorylandscapefordigitalassetsisevolving,withdifferencesinregulatoryapproachesbetweenjurisdictions.Digitalassetscontinuetohaveastrongpresenceintheglobaleconomy,asevidencedbyasignificantMostarebringingforwardbespokeregulation(48%)becausetheirexistingregulatoryframeworksdonotcoverdigitalassets.JurisdictionsthathaveestablishedoraredevelopingatailoredregulatoryframeworkforstablecoinsincludetheUnitedKingdom,HongKongandSingapore,whiletheEuropeanUnionisdevelopingaframeworkfordigitalassetsmoregenerally.Injust9%ofjurisdictions,digitalassetsaresubjecttoexistingfinancialregulation.Todate,around33%ofjurisdictionslackaregulatoryframeworkandarenotcurrentlyworkingonone.marketcapitalization.However,thelegalstatus3ofcryptocurrenciesvariessignificantlybycountry.AccordingtoananalysisbytheAtlanticCouncil,cryptocurrenciesarelegalin33countries,partiallybannedin17andgenerallyprohibitedin10.4Inanassessmentofthestatusofdigitalassetregulationglobally,theBankforInternationalSettlements(BIS)notedthatmorethan60%ofrespondingjurisdictionspossessorarecreatingaregulatoryframeworkfordigitalassets(Figureꢀ1).5FIGURE1CentralbankresponsestodigitalassetregulationsurveyRegulatoryframeworkforstablecoinsandothercryptoassetsAsapercentageofrespondents,2023PresenceinthejurisdictionsRegulatoryobjectivesYesInvestor/consumerprotectionCurrentlyunderdevelopmentProtectingfinancialstabilityCounteringillicitfinanceNoUncertainNoanswerFair,efficientandtransparentmarkets,innovationand/orcompetitionSafetyandsoundnessofregulatedinstitutions/infrastructures0%10%20%30%40%0%20%40%60%No80%BespokeregulationGeneralfinancialregulationUncertainBespokeregulationNoanswerGeneralfinancialregulationSource:BankforInternationalSettlements.(2024).AnnualeconomicreportNo.147:Embracingdiversity,advancingtogether–resultsofthe2023BISsurveyoncentralbankcurrenciesandcrypto./publ/bppdf/bispap147.pdfDigitalAssetsRegulation:InsightsfromJurisdictionalApproaches5ThisreportpromotesaGlobally,digitalassetpoliciesandregulationsdiffertoalignwiththeneedsofeachjurisdiction,basedonvariationsingoalsandriskappetites.Inaddition,notalldigitalassetsarecreatedequal,andtheirclassificationprofoundlyinfluencestheiruse,valuationandregulatorytreatment.Thisreportpromotesanuancedapproachtoregulationratherthana“one-size-fits-all”method,asentimentechoedinthediverseregulatoryregimesexploredinthereport.MethodologyInsightshavebeengatheredfromoursteeringcommitteeandexpertworkinggroupthrough:nuancedapproachtoregulationratherthana‘one-size-fits-all’method,asentimentechoedinthediverseregulatoryregimesexploredinthereport.–––DeskresearchWorkshopsInterviewsAudienceAstheworldgrappleswiththeopportunitiesandchallengespresentedinthedigitalassetssector,theWorldEconomicForum’sCentreforFinancialandMonetarySystemsseekstoprovideanimpartialunderstandingoftheregulatorylandscapethroughtheDigitalAssetsRegulatory(DAR)initiative.TheForumhasconductedpreviousrelatedworkonthistopicincludingtheDigitalCurrencyGovernanceConsortiumwhitepaperseriesandmostrecentlythePathwaystoCrypto-AssetRegulationpaper.Thisearlierworklaidthefoundationforfurtherexplorationofꢀjurisdiction-specificconsiderationsforshapingnewpoliciesandregulations.Thereportaudienceincludesglobalpolicy-makersandregulators,alongwithexecutivesofprivate-sectorcompanies,whoallhaveresponsibilitiesconnectedtodigitalassets.TaxonomyGiventhediverseactorsandrolesthatcomprisethedigitalassetsecosystem,ageneraltaxonomyisessentialforconsistentregulationandcanassistwithclarityandorganization,aswellasconsistentbenchmarkingacrossvariousjurisdictions.ThelackofacommontaxonomyhasbeenmentionedinthedigitalassetspaceandwasreferencedinthePathwaystoCrypto-AssetRegulationreportasanimportantrisk.However,therearestillmanyperspectivesandalackofconsensuspersistsondefinitionsamongecosystemparticipants.Bearinginmindthesecomplexities,theterm“digitalasset”willbeusedthroughoutthisreportasanall-encompassingcategory.Withineachjurisdictionalcontext,theterminologyisusedinlinewitheachrespectivejurisdiction’susage.TheDARinitiativeengagedmorethan80seniorleadersfromthepublicandprivatesectorsandacademiatoexaminethecurrentstateofdigitalassetregulationaroundtheglobe,andtoanalyseoutcomesfromregulatoryimplementationstodateinseveraladvancedjurisdictions.Thisreportsynthesizesthefindingsfromtheseexplorations.DigitalAssetsRegulation:InsightsfromJurisdictionalApproaches6Regulatoryapproaches,outcomesandunintendedconsequences1Thissectionexaminesninejurisdictions’digitalassetregulatoryapproaches,highlightingimportantindustryissues,initialpolicyoutcomesandunintendedconsequences.DigitalAssetsRegulation:InsightsfromJurisdictionalApproaches7ThejurisdictionschosenforToexaminelessonslearnedinthedigitalassetsregulatorylandscape,acomprehensiveviewofcurrentapproachesisneeded.Thejurisdictionschosenforexaminationhaveregulationsatanadvancedstageofdevelopment,allowingfortheimpactsoftheirimplementationtobeobserved.Theseare:theEuropeanUnion,Gibraltar,HongKong,Japan,Singapore,Switzerland,theUnitedArabEmirates,theUnitedKingdomandtheUnitedStatesofAmerica(Figure2).––AMLandKYC:EffectiveAMLandKYCmeasuresaremission-criticaltotheintegrityofthedigitalassetsecosystemastheyhelppromoteatransparentandsafeenvironment.examinationhaveregulationsatanadvancedstageofdevelopment,allowingfortheimpactsoftheirimplementationtoꢀbeobserved.Regulatoryandtechnicalsandboxes:Sandboxesplayapivotalrolebyallowingcompaniestotestproductsunderoversight,promotingresponsibleinnovationwhileensuringcompliancewithexistingandupcomingstandards.Foreachjurisdiction,therearefoursubsections:“generalapproach”,“approachbytopic”,“outcomes”and“unintendedconsequences”,eachdesignedtoexploredifferentelementsoftheregulatorylandscape.––DeFi:DeFi’sgoalofalteringtheexistingparadigmofcentralizationhassignificantimplicationsforhowusersinteractwithtechnologyapplicationsandintroducesnovelregulatorychallengesinthefuture.“Generalapproach”describestheoverarchingregulatorymethodologyofagivenregion.Within“approachbytopic”,thereportanalysesfouroftheindustry’smostpressingissues:anti-moneylaundering(AML)andknowyourcustomer(KYC);regulatoryandtechnicalsandboxes;decentralizedfinance(DeFi);andprivacyandsecurity.Whileevaluatingtheselectedjurisdictions,thesetopicsemergedasthemostprominent,witheachregionadoptingauniqueregulatoryapproachtoaddressthem.Theadditionalrationalefortheirinclusionisdiscussedbelow:Privacyandsecurity:Robustmeasuresprotectconsumers’assetsanddatafromthreatsandbuildasecuredigitalassetslandscapeandincreaseconsumertrust.Inthe“outcomes”and“unintendedconsequences”segments,thereportanalysestheresultsofdigitalassetspoliciesthathavebeenevidenttodate,aswellasanyunexpectedresultsstemmingfromtheregulatoryframeworksinplace.FIGURE2NinejurisdictionsassessedUnitedKingdomSwitzerlandUnitedStatesofAmericaJapanEuropeanUnionUnitedArabEmiratesGibraltarHongKongSAR,ChinaSingaporeDigitalAssetsRegulation:InsightsfromJurisdictionalApproaches81.1EuropeanUnionGeneralapproachApproachbytopicTheEuropeanUnionisoneofthelargestmarketswithadvanceddigitalassetregulation.In2023,theEUfinalizedthecomprehensiveMarketsinCrypto-Assets(MiCA)regulation,animportantpieceoftheEU’sdigitalfinancestrategy,providinglegalclarityonprivacy,securityandtransparencyfordigitalassets,whichdoesnotincludenon-fungibleAnti-moneylaundering(AML)andknowyourcustomer(KYC)In2021,theEUpresentedseveralproposalsforstrengtheningAMLprotections,includingestablishinganewentitycalledtheAnti-MoneyLaunderingandCounteringtheFinancingofTerrorismAuthority(AMLA).11Manyoftheseproposalsarecurrentlyindevelopmentand,subjecttodiscussions,workingtowardsagreements.12,13tokens(NFTs)anddecentralizeddigitalassets.6MiCArequiresallissuerstocreateawhitepaperforassets,subjecttoapprovalandlicensing,withnon-complianceleadingtofines.Theregulation,7effectivefrom30June2024forstablecoinsandfullyeffectivebytheendof2024,aimstoharmonizeregulationsamongmemberstates,replacingexistingdomesticlaws,whiletheimplementationisdelegatedtorespectivejurisdictionalauthoritiesforAsamemberoftheFinancialActionTaskForce(FATF),theEUalignswithTravelRuleregulations.14TherevisedTransferofFundsRegulation(TFR)mandatescapturingalltransactioninformation,regardlessofsize,withathresholdof€1,000forself-hostedwallets.enforcement.MiCAfocusesoninvestorprotection8andmarketintegrity,primarilyaddressingcrypto-assetserviceproviders(CASPs)andcertaintypesoftokens.Italsoincludesrulesforstablecoins,mandatinggovernanceandreservemanagement,MiCArequiresCASPstocomplywithKYCandAMLrules,performingenhancedduediligenceforcustomersfromhigh-riskcountries.andcompliancewithrelevantexistinglegislation.9ItisimportanttoclarifyherethattheseAMLprotectionsarenotcrypto-specific,andthattheTFRappliesexclusivelytoserviceproviders,andthereforeexplicitlyexcludesobligationsforprovidersofhardwareandsoftwareorprovidersofself-custodywalletsthatdonothavecontroloverthecrypto-assets.Assuch,AMLandKYCremainkeyelementsoftheupcomingregulations.Itisimportanttodistinguishbetweencrypto-assetsthatfallunderMiCAandfinancialinstrumentsindigitalformthatfallundertheexistingsecuritiesregulations(e.g.MarketsinFinancialInstrumentsDirective[MiFID]).TheEU’sDigitalOperationalResilienceAct(DORA)andtheDLTPilotRegimeprovidethelegalframeworkfortradingandsettlementofotherdigitalassetsunderMiFIDII(effectivesince2018),facilitatingcross-borderexpansionandmitigatingregulatoryarbitrage.10Withtheseadvances,theEUwillbetheworld’slargestmarketwithlegalandregulatoryclarityfordigitalassets.TheEuropeanUnionisoneofthelargestmarketswithadvanceddigitalassetRegulatoryandtechnicalsandboxesMiCAisgenerallysupportiveofregulatoryandtechnicalsandboxes.In2023,theEUlaunchedtheEuropeanBlockchainRegulatorySandbox,whichwillrunforthreeyears,withcohortsof20regulation.DigitalAssetsRegulation:InsightsfromJurisdictionalApproaches9blockchainusecases.15Whenitcomestodigitalsecurities,thelaunchoftheDLTPilotRegimeisdedicatedtoallowingcompaniestoexperimentwithdistributedledgertechnology(DLT).16Portugal,anEUmembercountry,alsohasauniqueTechnologicalFreeZoneregulatorysandboxforencouragingthedevelopmentandexperimentationofnewtechnologyapplications.17,18thelawisbindinganddirectlyapplicableinallEUmemberstates.Proponentsarguethatitavoidsregulatoryfragmentation,safeguardsconsumerprotectionsandfacilitatescross-borderexpansionforCASPs,whichwillmitigateregulatoryarbitrage.TheEuropeanBlockchainRegulatorySandboxhasledtomixedopinions.Somestakeholdershavegivenpositivefeedbackabouttheabilitytoruninnovativeexperiments,establishbestpracticesalongsideregulatorsandcollaboratewithauthoritieseffectively.However,thesandboxhasalsobeencriticizedbyindustryparticipantsforitsnarrowscopeofpermittedusecases,whichhasresultedinarelativelylimitedpoolofapplicants.Decentralizedfinance(DeFi)MiCAexplicitlycarvesoutDeFifromtheupcomingregulation,asperrecital22:“Wherecrypto-assetservicesareprovidedinafullydecentralisedmannerwithoutanyintermediary,theyshouldnotfallwithinthescopeofthisRegulation.”19However,theregulationcallsforseveralstudiesofcomponentsoftheDeFiecosystem,decentralizedprotocolsandapplications.EuropeanauthoritieshavebeenabletoinstilincreasingconfidenceonthetopicofKYCandAMLwiththetakedownofcryptocurrencymixerssuchasChipMixerandBitzlato,whichenabledmoneylaundering.23,24TheEuropeanSecuritiesandMarketsAuthority(ESMA)recentlypublishedareport,DecentralisedFinanceintheEU:DevelopmentsandRisks,toinformthefutureofMiCA.20Additionally,theEuropeanCommissionisexpectedtoprepareareportbyDecember2024thatexaminestheDeFimarket.OtheroutcomesincludethegrowthofinwardinvestmentintotheEUbyinternationaldigitalassetfirms,whichareearlysignsofincreasedmarketdevelopment.PrivacyandsecurityUnintendedconsequencesMiCAwillrequireidentityverificationofassetholders,andmandatesthattradingplatformsmustnotallowuserstotradeassetswithfullanonymization.Additionally,theTravelRule’sidentityrequirements,towhichtheEUsubscribes,willincludesupervisionoffinancialtransactions.21Someaspectsofdigitalassetshavebeenexcludedfromregulation,whileothersarebeingseenasoverlyprescriptive.MiCAhasbeencriticizedforexcludingtechnologyapplicationssuchascentralbankdigitalcurrencies(CBDCs),utilitytokens,DeFiandNFTs,leadingtopotentialunintendedconsequences.TheEUhasalsoenactedtheGeneralDataProtectionRegulation(GDPR),whichisseenasoneofthemostcomprehensiveprivacyandsecuritylawsintheworld.AuthoritiesareevaluatinghowGDPRandMiCAwillworktogether.22OtheraspectsofMiCAcanbeseenasbeingtoostrict,suchasstablecoinreserverequirements.Also,themandatedtransparencyconflictswithdigitalassetanonymity,raisingprivacyconcerns.IndustryplayersareurgingtheEUtoconsideralternativecompliancemethodsthatbetterprotectprivacy.Lastly,theDataAct’sprovisionsforinterruptingorterminatingsmartcontractshavefacedbacklashfromblockchainadvocacygroups,whoviewthesecontrolsasoverreaching.OutcomesTheintentionoftheMiCAregulationisforregulationtobeharmonizedacrossEurope,asDigitalAssetsRegulation:InsightsfromJurisdictionalApproaches101.2GibraltarGeneralapproachallowingDeFiprojectstotesttheirproductsandservicesinacontrolledenvironment.Gibraltarhasestablisheditselfasaprominentcentreforblockchainanddigitalassets.InJanuary2018,theterritorypioneeredlegislationforDLT,thefirstjurisdictiontodosoworldwide,emphasizingregulation,reputationandquickmarketimplementation.Itiswidelyrecognizedforitseffortsinadvancingblockchaintechnologyandensuringsustainabilityandsecuritywithintheindustry.Furthermore,theGFSCcollaboratescloselywithindustrystakeholderstostayupdatedontechnologicaladvancesandemergingtrendsinDeFi,ensuringthatregulationsremainrelevantandeffective.PrivacyandsecurityTheGFSCmandatesstringentdataprotectionandcybersecuritymeasuresforblockchainbusinesses,ensuringcompliancewithinternationalstandardssuchasGDPR.Additionally,theProceedsofCrimeActprovidesthoroughguidelinesonsecurityandprivacy,facilitatingastablecommercialsettingforbusinesses.29Moreover,itprovidesclearguidelinesonriskmanagementandthesafeguardingofcustomerassetstopreventdatabreachesandunauthorizedaccess.ThisproactiveregulatorystancehelpsbuildtrustandcreatesasecureenvironmentfordigitalassettransactionsinGibraltar.30TooperateinGibraltar,cryptocurrencycompaniesmustobtainalicencefromtheGibraltarFinancialServicesCommission(GFSC)undertheFinancialServicesActof2019.TheGFSCreviewsapplicationsandmaygrantalicenceifcertaincriteriaaremet.GibraltarhasclearregulatoryframeworkssuchastheFinancialServicesRegulationsof2020,whichregulatefirmssuchascryptocurrencyexchangesandwalletproviders.TaxationundertheGibraltarCompaniesActof2014exemptsdividends,capitalgainsandincomegeneratedfromdigitalassettransactionsiftheyoccuroutsideGibraltar.25Thistaxframeworkisattractiveforcompaniesandinvestorsfocusedonblockchain-relatedactivities,significantlyreducingthetaxburdenoncross-borderdigitalassettransactions.OutcomesTherehasbeenaninfluxofcompaniestoGibraltar’sdigitalassetsecosystemonaccountofitsfavourableregulatoryenvironment.Thepresenceofdigitalassetfirmsinthecountryisexpanding,withmoreentitiesestablishingoperationsthere.ApproachbytopicAnti-moneylaundering(AML)andknowyourcustomer(KYC)Additionally,Gibraltar’sregulatoryframeworkhasattractedinternationalbusinesses,bolsteringeconomicgrowthandpositioningtheterritoryasacompetitivehubfordigitalassets.Movingforward,thecountryaimstocontinueenhancingitsregulatorylandscapetosustaingrowthandattractmoreblockchaininnovators.TheGFSCsetsKYCandAMLprinciples,requiringfirmstomaintainrecords,monitorsystemsandreportsuspiciousactivitieswhileallowingadaptationtoevolvingchallenges.Thisregulatoryframeworkaimstobalanceeffectiveoversightwiththeneedforinnovationandgrowthinthefinancialsector.26UnintendedconsequencesRegulatoryandtechnicalsandboxesGibraltar’sregulatorysandboxesallowcompaniestotestnewproductsinacontrolledenvironment,ensuringcomplianceandreducingrisksbeforemarketlaunch.TheGFSCoverseestheseinitiatives,ensuringthattheproductsaretestedwithinstrictregulatoryparameterstosafeguardconsumerinterestsandmaintainmarketstability.27Gibraltar’sstraightforwardregulatorycomplianceprocesseshavethepotentialtoattractfirmsseekingregulatoryarbitrageopportunities.Specifically,theeaseofacquiringDLTproviderlicencesandloweroperationalcostsinGibraltarhavesignificantlyreducedthebarrierstoentry.Thiscouldattractlessdesirablemarketplayersandintensifyregulatoryarbitragepractices,ascompanieslooktobenefitfromGibraltar’smoreaccommodatingregulatoryenvironment.TherehasbeenalackofharmonizationofGibraltar’sregulatorypracticeswithotherGibraltar’staxframeworkisattractiveforcompaniesandinvestorsfocusedonblockchain-relatedactivities,significantlyreducingthetaxburdenoncross-borderdigitalassettransactions.Decentralizedfinance(DeFi)Gibraltar’sproactiveDeFiregulationbytheGFSCensuresflexibility,transparency,securityandconsumerprotectionwhileavoidingoverlyprescriptiverules.28TheGFSC’sregulatorysandboxplaysasignificantroleinthisapproach,economiesintheregion.Thepossibilityofregulatoryarbitrageexistsinthesegapsbetweenjurisdictionsandthereneedstobeagreaterfocusoncross-bordercooperationontheseregulatoryrequirements.DigitalAssetsRegulation:InsightsfromJurisdictionalApproaches11AddressingthesechallengeswillbekeytoGibraltarsustainingitsreputationasatrustworthyandinnovativehubfordigitalassets.Inthefuture,Gibraltarwillwishtostrikeabalancebetweenitsappealingregulatoryframeworkandstrongenforcementmeasurestocurbpotentialabuses.1.3HongKongSAR,ChinaGeneralapproachplaysapivotalroleinsettingclearmandatesan