A map for the new world of Blockchain

A collaborative project led by the Global Blockchain Business Council represents an unprecedented effort to analyze the technical and regulatory blockchain landscape.

On October 14, 2020, the Global Blockchain Business Council (GBBC) and the World Economic Forum released the 2020 Global Standards Mapping Initiative (GSMI), the first comprehensive effort to evaluate and map global blockchain standards. The GSMI summarizes key blockchain data and trends and provides action-oriented guidance for public and private sector stakeholders. Latham & Watkins provided legal and regulatory review for the project.

The GSMI comprises two component reports (Technical Overview and Legal and Regulatory Overview) and an interactive world map of legislation, regulation and guidance on blockchain and digital assets. The survey includes aggregated data from 185 jurisdictions, 379 industry groups and more than 30 technical standard setting bodies. The blockchain and digital asset landscape is mapped into three distinct areas: (i) technical standards; (ii) legislation and leadership of sovereign and international bodies; and (iii) industry best practices and standards.

The regulatory findings in the 185 jurisdictions surveyed are organized into the following 10 themes:

1. Consumer protection: Warnings issued to consumers, investors and businesses regarding digital assets.
2. Financial surveillance (anti-money laundering and terrorist financing): Laws, guidelines and regulations established by sovereign bodies to ensure the legality of transactions conducted with digital assets.
3. Digital Asset Regulation (including securities and commodities regulation and initial coin offerings (ICO) regulation): Regulatory and legislative tools used by governments to respond to the emergence of blockchains, digital assets and ICOs.
4. Taxation: Tax issues related to the use of digital assets, including trading and mining.
5. Central Bank Digital Currency (CBDC): Digital currencies issued by central banks.
6. Banking: Regulations on banks interacting with digital assets and digital asset businesses, as well as pilot projects in the banking sector.
7. Ban on cryptocurrencies: Jurisdictions that have taken steps to ban cryptocurrencies.
8. Sovereign strategies: Strategies implemented by jurisdictions to develop and implement blockchain technology at the national or regional level.
9. Regulatory sandboxes: Frameworks implemented by regulators that allow financial technology companies and other companies to conduct live experiments in a controlled environment and under the supervision of a regulator.
10. Government projects: Uses of blockchain for internal government use or the provision of government services.

Key regulatory aspects

Among the many insights that can be found in the reports and interactive world map, some key information related to regulation and standards setting includes:

• The fragmentation of regulatory approaches to blockchain technology and the need to bridge traditionally isolated information organizations, sectors and geographic barriers to promote functional frameworks
• The apparent overlaps, gaps and conflicts in standard setting and where these gaps can benefit from greater collaborations between entities than where such standard setting activities can be premature (and stifling to innovation)
• The lack of dynamic or principle-based guidance from regulators for new uses of blockchain technology (rather than guidance issued specifically for digital assets)
• The critical need for regulators to understand the attributes of blockchain technology and the important role regulators will play in shaping the future of technology through the creation of relevant standards
• The need for regulators to promote and leverage regulatory sandboxes and innovation hubs to create more effective regulation