G20 Summit: Achieving PM’s vision of comprehensive global framework for crypto regulation
regulatory framework for virtual digital assets (‘VDAs’). Under his leadership, India has embraced technology to an unprecedented degree and has been able to convince other nations in setting global standards for development of digital public infrastructure. It is thus no surprise that he recognises the transformative potential of Web3 technologies and has urged the global community to focus on adoption, democratization and developing a unified approach which benefits all.
VDAs are a key element of Web3 technologies. They are fundamental to the functioning of public blockchains as they create incentives and disincentives for network participants to engage with the blockchain, productively and honestly. In order to facilitate the adoption and democratization of Web3 technologies, it is imperative to focus on VDAs.
To achieve this objective of adoption, democratization and developing a unified approach for Web3, with its intrinsically global nature, there is an immediate need for countries to come together and build a common regulatory approach. This approach has to be guided by the following principles
Standard taxonomy
As a first step, it is imperative to map nuances of the VDA ecosystem, identify all players involved, and develop a common global taxonomy for it. This would help in eliminating confusion and streamline communication among regulators, industry participants, and investors, leading to a more coherent global policy environment. Currently, the vocabulary being used in various jurisdictions differ, creating confusion which may lead to regulatory disparities.
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