We are often asked how the Global DCA is able to bring together and achieve agreement amongst such a broad-based and diverse membership base when crafting standards, designing educational offerings and – in particular – when developing policy positions. The answer is that we start from a point of ‘Guiding Principles’ which help bring diverse viewpoints around the table to synthesize an organizational perspective. Our five ‘Guiding Principles’ are outlined below:
The Global DCA believes strongly in the concept of balanced regulation – regulation which balances the need for innovation in the industry with the need to protect consumers, stakeholders and the general public.
We believe that blockchain and digital assets are a transformative technology that will fundamentally shift the global financial sector. Digital assets are not just another fintech or technology that we can view through the narrow scope of financial sector regulation. But given their transformative nature and the evolution of this space must be viewed through the following four lenses:
Economic Growth / Job Creation
Financial Sector Evolution / Global Positioning in the Digital Era
Sustainability – Environmental as well as financial inclusion, access to finance and other social outcomes
By taking a holistic approach to understanding digital assets, we believe national jurisdictions may most appropriately devise policies, structure legal and regulatory frameworks and properly position themselves in the global digital economy.
So what is the correct legal and regulatory approach to digital assets? This will vary by jurisdiction, but generally, the Global DCA believes in a right-sized approach to government regulation complemented by a credible and robust system of self-regulation. This combination of regulation + self-regulation will allow greater overall regulatory coverage for the industry and individual jurisdictions and will help to strike the balance between the need for innovation and consumer protection.
This industry, more than any in recent memory is best suited to self-regulation as:
- RAPID EVOLUTION – We are dealing with a rapidly evolving industry which requires a swift and nimble approach to the regulation.
HIGHLY TECHNICAL – This industry is highly technical and requires significant expertise that is even difficult to find / maintain / retain in the private sector – let alone the public sector.
NEED FOR PROXIMITY – Further, the combination of rapid evolution and required expertise to effectively regulate necessitates a high degree of proximity – such as that found in self-regulatory regimes – to the digital asset industry. Given the swiftness with which innovation is being undertaken in this space – an expert removed from the industry’s knowledge could easily become obsolete in a short period of time.
GLOBAL – Finally, the construct of the digital asset industry very naturally transcends borders. It is truly borderless and global. Given the need for cross-border, global harmonization and engagement to regulate – there is a need for a self-regulatory entity which can more easily follow the flow of transactions.
As such, a self-regulatory approach makes the most sense in terms of providing effective and efficient regulatory coverage for this industry.
Global DCA Policy Positions
Leveraging our ‘Guiding Principles,’ the Global DCA undertakes member and partner association roundtable seminars, engages with stakeholders and considers the public interest in crafting its policy positions. Global DCA policy positions, comment letters, statements and responses are provided below:
Global DCA Response – SEC Release: Further Definition of “As a Part of a Regular Business” in the Definition of Dealer and Government Securities DealerRenata Szkoda
Global DCA writes to comment upon the Proposing Release because of its significance to the digital asset industry and the public. In the Proposing Release, the Securities and Exchange Commission (the “Commission”) proposes to redefine the term “dealer” in Exchange Act Section 3(a)(5) by the addition of proposed new Exchange Act Rule 3a5-4. The main focus of our letter is on the application of the expanded definition of “dealer” to entities that trade digital assets that are within the meaning of the term “securities.” In our view, the application of the dealer registration requirement to such entities is unworkable, and the Commission has completely underestimated the costs of such registration. In fact, the Commission has ignored the reality that its own conduct has made dealer registration impossible for entities that trade digital assets. While we will focus on the implications of mandatory registration for traders in digital assets, we observe, as a starting matter, that we believe that the Commission’s proposed expansion of the term “dealer” is inconsistent with the historical understanding of the term as used in the statute. (more…)
Global DCA Response – Response to “Money and Payments: The U.S. Dollar in the Age of Digital Transformation”Renata Szkoda
Global DCA writes to highlight our significant views and considerations about certain key aspects of the CBDC proposal given its possible influence on the digital asset industry, financial markets, and the general public. The GDCA welcomes the new exploration and public discussion of a CBDC by the Board. The GDCA strongly supports the Board’s continued study and exploration of CBDCs. We think that a successful implementation of a U.S. CBDC could have a huge consequence on the various aspects of our society, from strengthening the Fed’s ability to implement policy, to increasing access to financial services, to speeding and modernizing financial transactions. In the long term, a U.S. CBDC, or appropriate support of private digital currency development, is essential to maintaining U.S. dollar dominance and to preserving America’s role on the global stage. (more…)
GDCA writes to highlight the significant public policy benefits that could result from the approval of FTX’s proposal to amend its DCO registration order to permit it to offer non-intermediated clearing of crypto derivatives directly for participants. We believe that approving FTX’s request would signal U.S. global leadership in regulating the digital assets industry, would bring conduct that is currently happening offshore and in unregulated exchanges onshore and into the regulatory ambit, and would lead to broader market access and inclusion, among other benefits. (more…)
Global DCA Response – Response to OECD Crypto-Assets Reporting Framework and Amendments to the Common Reporting StandardRenata Szkoda
Through this response to the OECD Crypto Asset Reporting Framework (CARF), the Global DCA presented the following arguments: The Need for Secure Sharing of Data by Reporting Crypto-Asset Service Providers The Need to Support Decentralized Identity The Opportunity to Explore and Support Decentralized Tax The proposal then goes into provision of various recommendations noting that the Global DCA stands ready to collaborate with the OECD and its members to implement recommendations provided utilizing the Global DCA's broad member support to achieve tax reporting compliance while taking advantage of modern technologies to ensure vision of the right tax at the right time is realized. Please CLICK below to read the full response! CLICK HERE for the Full Response
Global DCA Response – US SEC Proposed Rule “Amendments to Exchange Act Rule 3b-16 Regarding Definition of an “Exchange”Renata Szkoda
Through this response to the US SEC "Global DCA Response - US SEC Proposed Rule "Amendments to Exchange Act Rule 3b-16 Regarding Definition of an "Exchange", the Global DCA presented the following arguments... (more…)