For cryptos to head towards mainstream adoption, investors seem to believe that a crypto-based public policy can be the benefactor in need. It is believed that a crypto-based public policy can ensure regulatory certainity and create financial inclusion from a socio-economic perspective.
According to PricewaterhouseCoopers, a professional service-based organisation, in October, 2022, Financial Stability Board (FSB) unveiled a set of potential guidelines for the creation of a global regulatory framework around crypto assets and stablecoins. The FSB is expected to table the final recommendations by July, 2023, and will review the operational growth around its recommendations by 2025. “From financial inclusion to addressing financial stability concerns, I believe a crypto-based public policy is mandatory to ensure that the benefits of the crypto industry are maximised while the risks are appropriately managed,” Punit Agarwal, founder, KoinX, a cryptocurrency taxation platform, told FE Blockchain.
Market research has shown that 2023 will lead to the creation of crypto-based regulations in many countries. Experts suggest that a crypto-based public policy can help avoid financial fraudulent practices, and guarantee mainstream crypto adoption. As stated by Oliver Wyman, a management consulting firm, crypto-based public policymakers can make the inclusion of Anti-Money Laundering (AML) and Know Your Customer (KYC) standards to enhance surveillance of crypto transactions. Also, policymakers may need to procure information to track developments around a new market activity and its relation with the financial system, with inclusion of trade-offs.
“I think it’s critical to have public policy around cryptocurrencies in 2023, as cryptocurrencies continue to gain mainstream acceptance and adoption and the market continues to evolve. A well-crafted public policy can provide clarity and certainty around the use of cryptocurrencies, increase consumer protection, and facilitate innovation in the crypto space,” Sathvik Vishwanath, co-founder and CEO, Unocoin, a cryptocurrency exchange, mentioned.
Reportedly, global financial authorities such as US Federal Reserve, Securities and Exchange Commission (SEC), International Monetary Fund (IMF), among others, have become active in creation of crypto-based public policies.
Moreover, future predictions indicate that crypto-based public policies will emphasise on the development of decentralised finance (DeFi) platforms. Insights from World Economic Forum (WEF), an international non-profit organisation, stated that the release of Markets in Crypto-Assets (MiCA) provisional agreement and Framework for International Engagement on Digital Assets express the desire for futuristic global crypto-based regulatory commitments. “With a lot of companies working towards progressive regulations, the future of crypto public policies could drive more technological innovations, and acceptance to a great extent,” Edul Patel, co-founder and CEO, Mudrex, a global crypto-investing platform, concluded.