The lack of standard, globally accepted terminology for cryptographic assets is a major obstacle to the adoption of clear regulatory policies in the industry, according to a study by the Cambridge Center for Alternative Finance (CCAF), published on April 16.
According to the report, many major terms in the cryptocurrency industry are often used interchangeably and without a clear definition, which makes it difficult to create global regulations.
Conducted with the support of the Nomura Research Institute (NRI), the study provides a detailed analysis of the regulatory environment for cryptocurrencies in 23 jurisdictions. Data from the survey were collected mainly as part of online surveys in the period from November 2018 to early February 2019.
What is a cryptocurrency?
According to the study, the term “crypto-assets” does not have a specific definition and is commonly used as a collective term referring to digital tokens that are issued and transmitted via distributed accounting (DLT) technology – in particular blockchain. Research shows that the terms “crypto-active” and token have different meanings depending on the context.
Therefore, the report describes various contexts for the definition of cryptographic assets. In a broad sense, this term includes all types of digital token issued and distributed on blockchain. In a narrow sense, this term applies only to digital tokens in open DLT systems that play an “important role in the functioning” of such a system.
Researchers also described the main challenges faced by global regulators of the new market. Before adopting clearly defined, standardized terminology, regulatory jurisdictions should first understand the nuances of the different terms and determine the terminology that best suits their regulatory purposes.
How to regulate?
In addition, CCAF research says that 82% of the analyzed jurisdictions have outstanding cryptographic resources. As a result, activities related to cryptographic assets that are considered securities are automatically implemented in accordance with local securities laws.
Recently, the media reported that the French government is planning to convince other EU Member States to adopt common rules. regarding cryptocurrencies. These regulations would be modeled on the provisions that were made by French officials.