Legal framework harmonization involves the process of aligning and coordinating laws, regulations, and legal principles across different jurisdictions. The goal is to reduce inconsistencies and create a more uniform legal environment for specific activities or industries. This coordination helps minimize regulatory arbitrage and fosters greater legal certainty for participants. It promotes cross-border collaboration and reduces compliance burdens.
Context
Legal framework harmonization is a major challenge and ongoing discussion within the global digital asset space. Different countries currently apply varying legal classifications and regulatory requirements to cryptocurrencies and blockchain activities. Efforts by international bodies and national regulators to establish common standards for virtual asset service providers, stablecoins, and decentralized finance are frequently reported. Achieving greater harmonization is viewed as essential for fostering global innovation while mitigating risks like money laundering and market instability.
EU CASPs must immediately integrate EBA guidelines into AML/CFT compliance architecture to ensure transaction tracing and meet the December 30, 2024, enforcement deadline.
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