Hogan Lovells support Global Digital Finance on the launch of their latest report
28 July 2022 – Global law firm Hogan Lovells is pleased to announce that the firm has supported GBBC Digital Finance ("GDF") on the co-creation, brainstorming and reviewing of the DeFi Report: Moving the Dialogue on Standards and Regulation Forward. The report is a call to action for industry and agencies to engage on and commit to the development of right-size, globally harmonized standards and regulation of the DeFi ecosystem, and proposes how GDF can act as a stewardship platform to enable this.
It outlines the key constituents of the DeFi ecosystem, summarizes the risks identified by regulatory and policy agencies, and proposes a two track approach to moving the industry-regulatory dialogue forward:
- In the absence of regulation specific to DeFi, the industry must coordinate to establish governance and consumer protection standards, and explore industry-led monitoring.
- Industry and regulators should engage in a co-regulatory risk identification process to analyze and develop right-size, globally harmonized regulation, and explore digitally-native, Web 3 ready solutions – including the design and operation of regulator nodes in a DAO.
The launch of the report builds on from Hogan Lovells strategic partnership with GDF which started in 2018 when the firm joined GDF as a Founding Member. Together, Hogan Lovells has supported GDF in developing an industry Code of Conduct to drive global industry standards in digital assets. Hogan Lovells are active members of GDF’s prominent industry Working Groups, including the Patron Board, Advisory Counsel, MiCA, Tax, Sanctions and DeFi.
Established in 2018, GDF is a not-for-profit industry body that promotes the adoption of best practices for crypto and digital assets, and digital finance technologies through the development of conduct standards, in a shared engagement forum with market participants, policymakers and regulators.
John Salmon, Partner at Hogan Lovells, commented: “The evolution of DeFi creates a significant challenge for policymakers and regulators around the world. Developing a proportionate and tailored regime will be difficult, particularly given the unique issues of identifying an entity that has sufficient control over the operation of the relevant service or provision of the DeFi product, which can be brought within the regulatory scope, as well as the jurisdictional issues of doing so. This shows the importance of GDF and the industry working together with regulators and policymakers to achieve the goal of developing a proportionate regulatory regime which works in this area.”
Click here to access the GDF DeFi report.