Business View Magazine | August 2022

16 BUSINESS VIEW MAGAZINE VOLUME 9, ISSUE 8 GUEST SUBMI SS ION Futures Trading Commission and recognizes the important role a self-regulatory organization can play for the industry. Moreover, in June 2022, the European Union announced that it had come to an agreement on a law, known as Markets in Crypto-Assets (MiCA), that will give the European Securities and Markets Authority the ability to inspect and regulate crypto platforms to ensure investors are protected. The EU law also speaks to environmental concerns that have been raised in relation to the mining of cryptocurrencies. How SROs are helping to shape the state of crypto The evolution of legislation such as the DCEA reveals the important role that self-regulatory organizations (SROs) can play in the ongoing development of the crypto market. The key to a healthy crypto market will be protection for consumers that does not interfere with market innovation. As the regulatory landscape develops, SROs can serve as a complement to formal government regulation. The concept of stewardship is central to the approach that Global DCA has taken to its engagement with the crypto sector. The concept focuses on the idea that a modern SRO should shape and guide the development of an emerging and globally significant industry to operate in harmony with the broader economy, society, and public interest. If regulations are crafted in such a way to make the industry stronger, those with a stewardship perspective will embrace them with the understanding that they will ultimately benefit all stakeholders. In addition to serving as a partner to regulators, SROs also assist those within the industry in understanding and meeting necessary standards. At Global DCA, we foster this through education and advocacy that is informed by data collection, research, and expert insights. When SROs are able to offer certification programs, they take a further step toward building human capacity by assuring that professionals entering the industry are competent and capable of meeting the needs of the market. A lack of clarity when it comes to best practices and regulatory responsibility has been one of the limiting issues in cryptocurrency growth. Congressman Darren Soto, who was among those responsible for introducing the DCEA, highlighted the need for increased clarity upon the introduction of the Act, saying, “Regulatory clarity is critical for digital commodity markets to promote innovation and consumer protection. Innovators are spending up to fifty percent of start-up costs on legal fees because of the current regulatory ambiguity between what is a security and what is a commodity.” Whereas regulations often look to constrain certain targeted behavior in an effort to increase stability and security in an industry, principles- based standards such as those promoted by SROs address the lack of clarity and best practices in emerging marketplaces like digital assets. When SROs step in to develop, promote, and celebrate industry standards, they foster development of businesses across the industry and outline the steps that are necessary for building resilient and globally competitive firms. – Gabriella Kusz is the CEO of the Global Digital Asset and Cryptocurrency Association, a global voluntary self-regulatory association for the digital asset and cryptocurrency industry. Global DCA was established to guide the evolution of digital assets, cryptocurrencies, and the underlying blockchain technology.