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The Digital Asset Industry at a Crossroads
The digital asset industry has reached a critical juncture, marked by a growing need for clarity and a shared understanding of the path forward. After years of fragmented approaches to regulation and legislation, the Blockchain Association has developed consensus-driven market structure principles that represent the perspective of leading companies in the industry.
A Balanced Approach to Regulation
The market structure principles tackle twelve key areas, with a recognition at their core that consumer protection and innovation are complementary, not competing, priorities. The principles advocate for standardized disclosures and robust safeguards, while ensuring businesses can innovate without undue burden. This balanced approach extends to custody, where the right to self-custody of assets is protected, while clear frameworks for institutional custody solutions are established.
Distinguishing Financial Activities from Non-Financial Uses
A crucial element of our framework is the distinction between financial activities and non-financial applications of blockchain technology. Smart regulation must focus on genuine financial risks without stifling innovation in non-financial uses of this technology. This extends to the treatment of non-custodial software, services, and smart contracts, which should not face the same regulatory requirements as traditional financial intermediaries when they do not custody user assets.
Token Classification
The principles also address one of the industry’s most pressing challenges: token classification. Clear frameworks for distinguishing between securities, commodities, and other digital assets are essential for compliance and growth, particularly as the market matures and new types of tokens emerge.
Global Nature and U.S. Competitiveness
Our framework recognizes the global nature of digital assets while emphasizing and strengthening U.S. competitiveness. We advocate for reducing friction in cross-border transactions while ensuring U.S. markets remain attractive for investment and innovation. This includes establishing a single secondary trading market to enhance liquidity and price discovery.
Developer Protections
Developer protections form another crucial pillar of the Blockchain Association’s principles. Open-source software developers should not face liability when independent actors misuse their code. This protection is essential for maintaining the innovation that drives our industry forward. Similarly, we emphasize the importance of network participation, protecting the ability of individuals and institutions to engage in activities like staking, voting, and peer-to-peer transactions on permissionless networks.
Conclusion
The consensus we have achieved on these principles matters because it signals to Congress and regulators that the industry is ready for common-sense regulation. We are not asking for special treatment or regulatory carve-outs. Instead, we are proposing clear rules of the road that protect consumers, foster innovation, and ensure U.S. competitiveness in a rapidly evolving global market.
FAQs
Q: What are the Blockchain Association’s market structure principles?
A: The principles are a set of guidelines that advocate for a balanced approach to regulation, emphasizing consumer protection and innovation.
Q: What are the key areas covered by the principles?
A: The principles address twelve key areas, including token classification, custody, and developer protections.
Q: How do the principles balance consumer protection and innovation?
A: The principles recognize that consumer protection and innovation are complementary, not competing, priorities, and advocate for standardized disclosures and robust safeguards while ensuring businesses can innovate without undue burden.
Q: How do the principles address the global nature of digital assets?
A: The principles recognize the global nature of digital assets and emphasize the importance of reducing friction in cross-border transactions while ensuring U.S. markets remain attractive for investment and innovation.
