Non-Binding Principles

Definition ∞ Non-Binding Principles are guidelines or recommendations issued by regulatory bodies or international organizations that do not carry the force of law. These principles serve to establish best practices, promote common understanding, and influence future regulatory developments. In the digital asset sector, they often precede formal legislation.
Context ∞ The state of non-binding principles in the digital asset regulatory landscape is one of preparatory guidance, aiming to provide direction before comprehensive laws are enacted. A key discussion involves their effectiveness in shaping industry behavior and preparing market participants for future regulations. Critical future developments include the potential for these principles to evolve into legally enforceable rules as jurisdictions gain greater clarity on digital asset governance.