Model Law on Virtual Assets Law Ministers’ Meeting

Transcript:Model Law on Virtual Assets Law Ministers’ Meeting:
Model Law on Virtual Assets Law Ministers’ Meeting March 2024 Presentation for the Commonwealth of Nations Advancements in blockchain and distributed ledger technology have had a revolutionary impact across sectors, of which finance is the most notable. The efficiency, transparency and security of distributed databases has metamorphosed the way we transact and interact with people and systems. Like any technology, this technology has also resulted in concerns relating to financial security and market integrity. This has necessitated the creation of robust regulatory frameworks in financial, prudential and anti-money laundering and countering the financing of terrorism (AML/CFT) spheres across the globe. Regulation of these technologies is particularly important for Commonwealth countries because there has been a large upswing in the adoption of Virtual Assets. Some of the Commonwealth countries in the top 20 ranked countries in the recent “Geography of Cryptocurrency” report by Chainalysis were India, Pakistan, Nigeria, Canada, Bangladesh and the United Kingdom. International bodies, such as the Financial Stability Board, the Financial Action Task Force (FATF), and the International Organization of Securities Commissions (IOSCO) have all called for the regulation of Virtual Assets and Virtual Asset Service Providers (VASP). INTRODUCTION This Model Law shall be based on the following guiding principles: Principle-Based Protection-Focused Balanced and Proportionate Comprehensive Flexible and Adaptable PRINCIPLES PART I OF THE LAW: OBJECTS AND INTERPRETATION A crucial step of this legislative journey - before full customisation and implementation of the Model Law by each Commonwealth member country - is having Commonwealth member countries agree on the purpose and scope of the Model Law. It will then be important to align definitions of key terms to ensure the industry has legal certainty and clarity. Definition of Virtual Assets, Virtual Asset Service Providers and the delineation of the scope of the Model Law is of prime importance. Commonwealth member countries will be able to trust that the governing rules across the Commonwealth will be uniform, and of the highest standard. In this regard, the scope and purpose of this Model Law, as well as the way forward and the exclusions in the Model Law will be fundamental. Commonwealth member countries may decide which regulatory authority in their respective jurisdictions is best suited to take on the roles envisaged in the Model Law SCOPE AND DEFINITIONS Virtual Asset Service Providers or VASP means a Legal Person that, as a business, conducts one or more of the following activities