Oct. 20, 2023
inconsistent digital asset regulations across different countries could lead to unfair treatment. Some potential issues: Fragmented compliance - Multinational custody providers may face conflicting localization requirements across jurisdictions. Unlevel playing field - Varying regulatory stringency could disproportionately burden providers in countries with stricter rules like the U.S. Arbitrage risks - Inconsistent regulations open loopholes for regulatory arbitrage, undermining policy aims. Stifled innovation - Companies may avoid jurisdictions with unclear or excessive regulation, concentrating innovation in less stringent regimes. Data conflicts - Cross-border data transfer and privacy rules may conflict, creating compliance challenges. Enforcement gaps - Activity may migrate to jurisdictions with limited enforcement capabilities. Investor confusion - Varying protections will make assessing risks across accounts and assets complex for investors. I agree regulatory consistency across major jurisdictions should be a priority as digital asset oversight matures. The SEC should coordinate with international bodies like IOSCO to harmonize core custody standards and reporting protocols. This would support a more uniform, efficient global regulatory system. But differences in local needs should also be accommodated.