- A policy paper from INATBA, which was co-authored by an expert from the IOTA Foundation, criticizes the outdated financial rules on Web3.
- The report argues for a shift to a proportionate, risk-based framework that classifies digital tokens based on their actual function.
Die International Association for Trusted Blockchain Applications (INATBA) hat ein Policy paper publishedin which she advocates a change in the regulation of Web3 and Distributed Ledger Technology (DLT). The interest group opposes regulators’ attempts to apply outdated and therefore inappropriate financial regulations to blockchain technology.
One of the paper’s lead authors is Giannis Rousopoulos of the IOTA Foundation, who along with four other experts lament and question the “regulatory mix” that characterizes today’s digital economy.
Titled “A Critique of Regulatory Mixture in the Digital Economy,” it claims that regulators do not understand how decentralized systems actually work and therefore fail by imposing traditional financial rules on them. Experts from the IOTA Foundation and INATBA contributed to the analysis and warn that applying traditional financial models to these systems “causes friction and undermines the fundamental principles of decentralization.”
The report fundamentally rejects the “same activity – same regulation” approach. By treating every digital asset like a security or requiring decentralized autonomous protocols (DAOs) to operate like centralized financial institutions, regulators risk crippling innovation and pushing development offshore.
The authors advise:
“Regulation should introduce a functional classification test to clearly separate tokens that represent financial instruments from those that represent ownership, claims, access rights or governance rights.”
This will prevent double regulation, which poses the risk of double taxation. Furthermore, the technical limitations of directly applying rules such as the right to erasure – from the GDPR – to immutable public ledgers should be recognized.
In addition, INATBA policy advocates a risk-based, tiered regulatory approach. This structure would scale compliance obligations based on an actor’s size, structure, and actual extent of control over a network.
“The path to true transparency requires frameworks that are technically sound, risk-appropriate and proportionate.”
IOTA is changing hands for at the time of going to press 0,1059 $after the price in the last 24 hours 3,03 % has increased. The token’s market capitalization is $443.25 million.
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