A dual regulatory framework involves two separate sets of rules or authorities governing a specific area. This approach to supervision assigns oversight responsibilities to two distinct regulatory bodies, each focusing on different facets of an industry or market. For digital assets, one authority might regulate security tokens, while another addresses payment tokens or commodities. This structure aims to apply existing expertise from traditional finance to novel digital asset categories, though it can also lead to jurisdictional ambiguities.
Context
The application of a dual regulatory framework to crypto assets is a common approach in many jurisdictions, leading to ongoing debates about jurisdictional clarity and potential overlaps or gaps. A key discussion involves determining which specific digital assets fall under which regulatory purview, influencing their market treatment and compliance obligations. Future efforts seek to streamline this dual approach or move towards more unified regulatory structures for digital asset markets.
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