The cryptocurrency – the monetary alternative formerly avant -garde – goes the dominant current. The act of genius, recently signed in law and the law on clarity, pass In the House and pending a vote by the Senate, are at the heart of industry efforts to obtain regulatory clarity and to level the rules of the game with traditional finance (tradfi).
In its quest for legitimacy, however, the cryptographic industry was betrayed by the proposed legislation. These bills suggest abandoning factor X which made the crypto so powerful and attractive in the first place: decentralization without confidence. The new cryptography legislation would benefit from the expression in what makes this pioneer industry so attractive by adopting regulations as Technology itself.
Cryptocurrencies – digital currencies that use blockchain technology to allow secure and transparent transactions between peers – are decentralized. Their nature without confidencewhere no central authority is necessary to verify transactions, is essential to The adoption of cryptographywith a market capitalization of $ 3.78.
Until now, the industry has prospered without central supervision or in government regulations. The huge success of Crypto is the culmination of competition on the free market without restraint.
More than half of all cryptocurrencies have failed. However, thanks to this process of tests and errors, new and powerful technologies have emerged.
Blockchain technology is used by 81 of the 100 best public companies. The global market for smart contracts, self-executing contracts built on Blockchain technology, was estimated at $ 684.3 million in 2022 and should go to $ 73.7 billion by 2030. The volume of stablecoins transactions, cryptocurrencies fixed to an asset as a fiduciary currency, A exceeds The combined volume of visa and mastercard. And the RWA market, tokenist active assets, should reach a market capitalization of $ 50 billion At the end of this year.
Despite the successes and lessons learned from these technologies, new legislation in acts of engineering and clarity seeks to bring the crypto to the same centralized regulatory umbrella which controls the traditional financial markets. These bills pose a regulatory framework which alignment Opérimentation of stable states and federals.
The current legislative approach lacks an opportunity to draw from the potential of self -regulation, where private legal organizations compete to test and refine regulatory approaches. Thanks to experimentation, as the cryptographic industry has demonstrated it with money, registers and contracts, regulations can become a powerful technology.
Private regulations and competing regulatory regimes are not only theoretical concepts prepared during an Egghead Convention, they have a long history of success in various sectors.
Private regulation Was key to fields such as environmental protection, human rights, confidentiality, employee and customer safety, and animal welfare, companies establishing strict standards to attract customers.
The NYSE and NASDAQ scholarships, as self -regulating organization, establish their own rules For registration and trade, go beyond surveillance of the government to shape their respective regulatory environments.
Industry standards, such as those of International Organization for Standardization For quality and environmental management, reflect another form of private regulation, companies voluntarily adopting them to improve operations and meet market needs.
Other notable private regulatory systems include Financial Industry Regulatory Authority or finra, the American Arbitration Association Associationand the Effective settlement center for disputes.
These examples highlight the potential of private regulations to serve as a supplement and, in certain cases, to a substitute for government surveillance. If the cryptography industry was authorized to adopt this model, regulatory technology could evolve, private actors developing and testing regulatory frameworks that correspond to the unique needs of decentralized networks.
If acts of engineering and clarity authorized private regulators in the cryptography ecosystem, they would not only preserve the innovation that Crypto brings to the market but will also ensure that it remains flexible enough to adapt to a constantly evolving technological landscape. This would reflect the way in which many industries, from finance to technology, have evolved over time: through tests and errors, competition and constant refinement.
To release the full potential of cryptography, we must recognize that the regulations itself can be subject to market forces. The decentralized nature of crypto has already demonstrated its value, it is now time for the regulations to evolve with it.
Julia R. Cartwright, Phd., Is principal researcher at the American Institute for Economic Research and professor of economics and game theory.
