Activities conducted during this VMG had as a main goal to treat the topic of risk mitigation in digital assets, by exploring the transformative impact of cryptocurrencies, tokenized securities, stablecoins, NFTs, and CBDCs on financial markets. This, because the emergence of digital assets has initiated a significant transformation in the global financial ecosystem. Technological drivers – key technologies like blockchain, distributed ledger technology (DLT), and smart contracts are at the forefront of this change. We address the following aspects:
1. Digital Assets – Evolution, Types, and Impact. For this, we analyzes the journey of digital assets from novel concepts to essential elements in modern finance, explore various digital assets, focusing on their distinct characteristics and use cases, examine the role of blockchain, DeFi, and NFTs in shaping the development of digital assets.
2. Regulatory Landscape and Challenges. The paper addresses the current state of adoption and regulation by investigating the adoption trends and regulatory status of digital assets globally,
highlighting different regulatory approaches and frameworks across jurisdictions, and discussing the difficulties in creating effective regulatory environments for digital assets.
3. Mitigation Strategies and Recommendations: (1) balancing Innovation and Risk: Proposes regulatory measures that protect consumers and investors while supporting innovation; (2) Global Regulatory Coordination: Advocates for harmonized regulations to minimize regulatory arbitrage and foster international cooperation; (3) Leveraging Regulatory Sandboxes: Suggests the use of sandboxes and innovation hubs for nurturing digital asset businesses and facilitating adaptive learning.
Conclusion and Future Outlook:
– Regulatory Approach: Emphasizes the importance of a flexible and forward-looking regulatory stance.
– Stakeholder Engagement: Recommends continuous dialogue between regulators, market participants, and stakeholders.
– Vision: Aims to realize the potential benefits of digital assets while effectively mitigating associated risks.