A technology neutral approach in regulation or policy means that rules are formulated without favoring or discriminating against any specific technology. Instead, the focus is on the function, risks, and outcomes of an activity, regardless of the underlying technological means used. This principle aims to foster innovation and ensure that regulations remain relevant as technology evolves. It promotes fair competition and avoids stifling technological advancement.
Context
The application of a technology neutral approach is a frequently discussed principle in the regulation of digital assets and blockchain technology. Regulators aim to apply existing financial laws to new digital instruments based on their economic substance rather than their technological form. This helps prevent regulatory gaps or unnecessary restrictions on innovation. Future policy discussions will continue to assess how to apply this approach effectively to new digital asset classes and decentralized protocols while ensuring consumer protection and market stability.
The White House framework mandates a function-based asset taxonomy and regulatory coordination, ending the prior enforcement-only compliance uncertainty.
Inconsistent national adoption of global standards necessitates a strategic review of cross-jurisdictional operating models to mitigate regulatory arbitrage risk.
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