When announcing his executive order on the regulation of crypto, US president Joe Biden used the phrase, ‘same business, same risks, same rules’.
Late last year, FundsTech held a webinar about the future of crypto featuring a mix of traditional asset managers, digital disruptors and the service providers found somewhere in between.
Unsurprisingly, the most contentious issue involved regulation. One of the panellists stated that the current state of competition between traditional players and crypto newcomers was “not fair at this point”.
But if the crypto world has to operate by the same rules for a traditional mutual fund, would it still work? Can regulators find a way to level the playing field without demolishing the crypto market?
You can tell this will be a complex task when the likes of Luxembourg and Dublin, jurisdictions that are typically the first out of the blocks when it to developing frameworks for new asset classes, are perfectly content to sit back and let the likes of Switzerland or Liechtenstein take the lead on cryptocurrencies.
Only when an effective and fair regulatory framework is created will we be able to see whether some of these firms are genuinely innovative or just playing by another set of rules.
Nicholas Pratt, Technology & Operations Editor
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