The Changing Face of Crypto
It is becoming more and more clear that further regulation is necessary to bring the crypto ecosystem the credibility it needs to thrive.
But how do we approach the development of a framework that allows us to take full advantage of digitalisation while protecting the user? It requires not only the expertise of those developing VASPs (virtual asset service providers), but that of the regulators, legislators and established industry to really be able to take each angle into consideration.
The recent FATF meeting in Osaka saw industry leaders gather to discuss how best to ensure that KYC compliance solutions are built into VASPs on a global scale. The borderless nature of virtual assets means that regulators will not only have to work at a local level but at a global level too. “Although no white smoke was seen at the end of two days,” writes Blockchain Live speaker Malcolm Wright, “the industry agreed in principle that a not-for-profit body was required to oversee the governance and deliver of a global solution.”
One organisation aiming to do just that is Global Digital Finance. An industry body for everyone from crypto assets issuers to custodians, GDF includes crypto leaders Coinbase, R3, and Circle among its members, and brings them together with lawyers and leaders of the traditional financial world, from Hogan Lovells to Barclays. With each expert’s view considered, GDF analyses where the traditional regulatory framework supports the developments in the digital finance world, and where it is found wanting.
It has begun publishing – and regularly updating – a Code of Conduct for members to follow, establishing best practice for issuers, trading platforms, wallets, custodians, asset managers and beyond.
“The GDF Code has been drafted by the crypto-assets community, for the community, with input from professional services providers, regulatory experts and financial services participants,” says Teana Baker-Taylor, Executive Director at GDF. “Our intention is to create holistic industry-led best practices to enable companies to consistently deliver high conduct standards and operating practices to their customers, market participants and regulators.”
In creating these standards, GDF hopes to change the image that crypto has had over the past few years – the idea that it is only used by terrorists and criminals to hide money. The credibility that they provide will see crypto brought into mainstream use – not just as a financial asset, but as a means for exchange too.
That members of the legal world and established financial world are part of the conversation is paramount. As Co-Chair and Guarantor of GDF, Lawrence Wintermeyer pointed out, these experts in their fields do this work in their own time. The result is the communing of passionate people looking to drive innovation in a meaningful and stable way.
Present at the last GDF mini summit was Vice-Chairman of Corporate Banking at Barclays, Jeremy Wilson, who commented on the significance of these meetings, the seniority of the people at the table. Though the mainstream conversation may no longer be focused on Bitcoin fever, this is a sign that it is no longer a question of if crypto will become the future of money, but when.
Download our white paper to find out more about the regulating cryptocurrencies, with exclusive insights from Malcolm Wright, Teana Baker-Taylor, and the BRI’s Hilary Carter.
Continue the conversation at Blockchain Live in London on 25th of September, where Insight Partners GDF will be joined on stage with R3’s Neepa Patel, the OECD’s Greg Medcraft, Barclay’s Nicole Sandler, and the European Banking Authority’s Elisabeth Noble.