The report explores how regulations are taking shape in the EU, Gibraltar, Hong Kong, Japan, Singapore, Switzerland, the UAE, the UK and the US.

It focuses on four key regulatory topics that have emerged as critical issues: Anti-Money Laundering and Know Your Customer (KYC); regulatory and technical sandboxes; DeFi; and privacy and security.

Each of these areas is examined in-depth in the report, revealing both the successes and challenges of current policies.

The report emphasises that although full global coordination for crypto regulation would be ideal, "varying ecosystem maturity in different jurisdictions, evolving use cases, capacity of regulators and other factors make it difficult to achieve".

Regulators and industry players should therefore explore "alternative regulatory pathways to collaborate and regulate the cryptoasset ecosystem" through a "principle-based, agile approach" that takes local context into consideration. Along with the existing efforts on global coordination, "these additional regulatory solutions can be leveraged to attain the desired outcome."

Report recommendations:

Regulation: Although global coordination is "ideal", it is "difficult to achieve". However, "regulatory pathways already exist that international organisations, regional bodies and industry players can implement."

International organisations: International organisations should "promote harmonised understanding of taxonomy and classification of cryptoassets and related activities," setting out baseline regulatory standards, as well as encourage "passportability and data-sharing that enable interoperability."

These measures can "foster convergence in different jurisdictions, provide clarity for business, protect users and discourage illicit activities."

Regional and national authorities: These authorities play a key role in providing certainty for innovators and empowering consumers. As such, the report suggests they should "focus on coordinating among domestic departments to address cross-sector risks, develop guidelines and best practice frameworks to proportionately regulate the ecosystem." They should also "leverage technology and analytics services for automated regulatory compliance/reporting, real-time risk alerts and tracking regulatory change."

These bodies can also implement learnings from regulations in other sectors for best practices. Data-sharing regulations in the crypto industry could leverage learnings from, for example, supervisory colleges that oversee information sharing in the broader financial sector.

Industry leaders: Industry leaders should "continue work on interoperable technical standards and focus on establishing and disseminating best practices." They should also engage with policy-makers and regulators in an effort to "innovate responsibly and align on educational efforts."

The report says crypto industry players have a key role to "ensure the ecosystem evolves in a responsible manner and can learn from more mature industries to fulfil this role." For example, "the crypto ecosystem can look years of experience in evolving data security standards for credit cards or global principles of good practice in the foreign exchange market to ensure consumer interests are protected."

Ultimately, international organisations, regional and national regulators and industry leaders "will need to collaborate to ensure consistency and clarity."

CISA is designed to "harmonise, enhance, and advance crypto-enabled ESG efforts across the globe."

According to the press release announcing the launch, the social, governance, and environmental impact of cryptocurrency encompasses both new opportunities and challenges. CISA will aim to bring together a "vibrant ecosystem around a uniform set of ESG goals through projects across three pillars that advance learning and enable leadership focused on diverse geographies."

These include a digital ethnography of crypto-enabled financial inclusion efforts, the development of a toolkit on decentralised autonomous organisations, and the management of a workshop series focused on the intersection of crypto and net-zero efforts.

CISA has been launched in collaboration with CoinDesk.

The resource suite aims to help leaders better understand and action new policies and regulations around the rapidly evolving topics of central bank digital currency and stablecoins.

Created by the World Economic Forum’s Digital Currency Governance Consortium, the new tool was created following 18 months of research and analysis with more than 85 member organisations across the public and private sector and civil society. The nearly 200 members of the consortium are from over 30 countries.

The toolkit:

• provides an overview of the DeFi space, and the major classes of DeFi protocols, with tools to help understand the implications of new services;
• explores the potential benefits of the DeFi approach, along with the challenges that DeFi businesses will face;
• offers a detailed breakdown of the risks that DeFi may pose. Many are familiar concerns (although sometimes manifested differently), while others are unique to the decentralized, programmable and composable structure of DeFi; 
• maps out potential legal and regulatory responses to DeFi.

•  The appendices provide a series of worksheets and other tools to assist with the evaluation of DeFi activities: 
  • Appendix 1 provides background assessment for policymakers and regulators looking to understand whether DeFi may be relevant to their entity.
  • Appendix 2 provides a stakeholder mapping tool for DeFi services.
  • Appendix 3 outlines the decentralization spectrum.
  • Appendix 4 provides a DeFi policymaker canvas.

The toolkit has been designed as “a starting point for policymakers looking to understand the risks and opportunities posed by DeFi businesses and services and to devise the best policy responses.”

Representatives from governments around the world contributed to creating  the toolkit, including those developing Europe's Markets in Cryptoassets (MiCA) framework and major U.S. financial regulators.