“Same activity, same risk” is a regulatory principle suggesting similar financial activities should have similar rules. This regulatory principle asserts that financial services or activities posing comparable risks should be subject to equivalent regulatory oversight, irrespective of the underlying technology or organizational structure. It aims to ensure a level playing field between traditional financial institutions and new entrants, such as crypto asset service providers. The application of this concept seeks to prevent regulatory arbitrage and maintain systemic stability.
Context
The “same activity, same risk” principle is a guiding tenet for many global regulators as they develop frameworks for crypto assets, seeking to apply existing financial rules where appropriate. Debates arise when determining whether a digital asset activity truly mirrors a traditional one in terms of risk profile. Future regulatory efforts will continue to refine the application of this principle to novel blockchain-based financial services.
The Financial Stability Board's peer review mandates G20 jurisdictions accelerate consistent implementation of Global Stablecoin and CASP regulations to mitigate systemic arbitrage risk.
Global regulators must urgently close compliance gaps in CDA frameworks, particularly concerning cross-border cooperation and emerging business models.
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