Exploring the Future of Digital Asset Regulation
BDAP hosts the 11th Reg@Tech Roundtable
Full report of the workshop will be coming soon.
The 11th Reg@Tech Roundtable
The Wharton Blockchain and Digital Asset Project hosted the 11th Reg@Tech Roundtable at the Wharton School, University of Pennsylvania, on October 4–5, 2024. This two-day event convened prominent leaders from the digital asset industry, regulatory agencies, and academic institutions to engage in meaningful discussions on critical regulatory prospects and challenges. The roundtable served as a platform to promote dialogue and collaboration, striving to develop solutions that harmonize technological advancements with the evolving digital asset regulatory landscape.
Key Agenda Items
Divergent Regulatory Approaches
Participants highlighted the fragmented regulatory landscape across jurisdictions, emphasizing the need for harmonization to reduce compliance burdens and facilitate market entry.
Regulation of Non-Custodial Wallets and DeFi
Discussions focused on the ambiguous regulatory stance towards non-custodial wallets and DeFi protocols, underscoring the importance of clear liability frameworks to protect users while encouraging innovation.
Evolving Regulatory Framework of Stablecoins and Tokenization
The roundtable addressed the challenges in defining and categorizing stablecoins, stressing the impact of these issues on regulation and market adoption.
Working Groups Insights
Smart Contract Governance – With the rise of smart contracts in digital finance, the group discusses whether these contracts should be upgradeable to address security flaws and who should bear responsibility in the case of failures. The discussion also considers whether such accountability should be viewed as a product liability or regulatory compliance issue.
Off-chain Considerations in Prediction Market—Typically, a technology or service stack includes both on-chain and off-chain components. Group B concentrated on identifying these components within the prediction market ecosystem. They analyzed different scenarios and mapped the associated risks. Based on the potential impact of each scenario, the risks were categorized as high (very high), medium, or low (very low).
Bridging TradFi and DeFi – To bridge the gap, the recommendations included the development of tools for managing transaction approvals, encouraging innovation by learning from DeFi, ensuring clarity in regulations, and enhancing risk disclosures. Additionally, it is important to support governance standards to make services more accessible, while acknowledging that TradFi and DeFi may ultimately operate as separate but complementary systems.
Beyond KYC and Privacy Concerns – Traditional Know Your Customer (KYC) requirements are ill-suited to decentralized systems. The group explores decentralized identity (ID) as a solution, leveraging blockchain to enable secure, user-controlled verification. Social graphs and decentralized IDs offer a promising path, though challenges related to privacy and implementation persist. Privacy concerns vary by region, and the report emphasizes the need for KYC systems to incorporate flexible privacy controls.
The list of attendees.
Meet the Organizers
Kevin Werbach
Director & Founder, BDAP
Daniel Resas
Senior Fellow, BDAP
Dimitrios Psarrakis
Senior Fellow, BDAP
Sangita Gazi
Postdoctoral Research Fellow, BDAP