A technology neutral framework is a regulatory approach that applies rules based on the function or risk of an activity, rather than the specific technology used. This framework aims to ensure that similar activities are regulated consistently, regardless of whether they employ traditional methods or new innovations like blockchain. It prevents regulatory arbitrage and fosters innovation by not singling out specific technologies for either undue favor or restriction. Such an approach provides greater flexibility and longevity for regulations in rapidly evolving sectors.
Context
The concept of a technology neutral framework is a central plea from the digital asset industry to regulators, frequently appearing in crypto news and policy discussions. Proponents argue it allows existing laws to apply effectively to novel digital assets without stifling innovation. Debates often arise regarding how to apply functionally similar regulations to vastly different technological implementations, particularly concerning investor protection and market integrity.
The Executive Branch mandates a technology-neutral framework, compelling the SEC to abandon enforcement-first tactics for definitive, clear-path rulemaking.
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