The crypto industry has been under the scrutiny of regulators who have sought stronger laws for crypto transactions. But crypto community members have repeatedly said that government regulators do not understand the concept and benefits of crypto and that is why they are pushing for stronger regulations. The resolution by many is that cryptos should be studied in-depth.
Among the many powerful institutions that are taking a deeper look into digital currencies is the World Economic Forum (WEF). The WEF, through the Digital Currency Governance Consortium (DCGC) White Paper Series, has taken a further step by publishing a resource suite that provides information regarding central bank digital currencies (CBDCs) and digital tokens for private sector lawmakers and investors.
The WEF publication covered topics about regulations and their impacts on stablecoins and CBDCs. The publication, which has eight separate white papers, also contains information about the risks and benefits of digital assets and what alternatives are there for the readers. The information and data were gathered from 40 countries.
Details of the Report
In the white paper compiled by 85 organizations from the WEF countries, the topics discussed include the potential deployment of CBDCs and digital tokens as financial assets to facilitate a cross-border economy. The white paper also addressed issues with regulations for digital tokens and how financial institutions can be impacted by them.
According to the CEO of Fidelity International Anne Richards, it is important for cryptocurrencies and stablecoins that their investors and consumers are protected from fraud and abuse. Richards said that the protection of digital assets and stablecoins investors is the major topic of the DCGC. Fidelity International is one of the contributing financial institutions.
In one of the white papers, the WEF noted that there are regulatory gaps that must be filled before the protection of digital asset consumers can be achieved. The WEF also talked about the potential benefits that governments around the world can benefit by collaborating to prevent the use of digital assets for fraud and facilitating payments for criminal activities.
Cybersecurity and Other Issues in The WEF White Paper
The WEF white paper also mentioned a lack of cybersecurity that can provide all-round protection for crypto platforms and members. The WEF said that this could be disastrous in the event that a malicious bug compromises crypto platforms and exposes consumers to exploitation.
Going further the WEF proposed a security framework for governments and financial institutions to follow. The framework involves the creation of a task force of senior leaders from every regulatory agency involved in CBDCs and stablecoins. They would lay a foundation for sustainable policies, merge regulations, and facilitate international collaborations.
The WEF is known for releasing white papers that focus on the consumption and deployment of new technologies that can impact the economy. In June, the WEF released a white paper that addressed the benefits, risks, and possible regulations of decentralized finance, DeFi. NFTs, DeFi, and other digital assets have become an important part of the modern digital world.