A Middle-Ground for Cryptocurrency Regulation : Using Delaware’s Incentive-Driven Private-Ordering Model
Proposals for domestic regulation of cryptocurrency have been numerous. Should prudential agencies such as the Office of the Comptroller of the Currency (OCC) establish jurisdiction? Or should states adopt a uniform act, much like the Uniform Commercial Code (UCC)? Or else, have states' customized regulations that are already in effect, such as New York's BitLicenses, worked?This Note outlines the current regulatory landscape for the cryptocurrency space and recommends, based on a preferred structure of private ordering, the necessity for incentive-driven regulation. In filling the gaps where legislation has not empowered regulators, insiders are partial to a low regulatory ceiling; yet, classically, regulators err on the side of more stringent standards. The cryptocurrency space is no exception to the unnecessary “assumption that the [regulatory] choice . . . is between bottom-up solutions and top-down prescriptions, regulation versus deregulation, the administrative state versus the private market actor.” The 2008 crisis is a useful guide, and accordingly this Note will shed light on lessons to be learned from the obstructive incentive structures of the financial regulatory scheme pre-2008. The Financial Crisis Inquiry Commission has concluded that the “crisis was avoidable,” because insiders “ignored warnings and failed to question, understand, and manage evolving risks.” Therefore, a Delaware-inspired private ordering model would provide a sustainable and alternative system that incentivizes technologists to privately reinforce policy interests. Corporate law concepts applied to the cryptocurrency space could mitigate against the threat of insider positions to the detriment of the consumer. Private actors enforce policy goals, filling the regulatory gaps to aid in advancing innovation while also strengthening public confidence. This kind of “soft law” enables the government to facilitate correct incentives with a thoughtful regulatory architecture. Yet, the past is often a map to the future. Therefore, success in shaping an effective cryptocurrency regulation template depends on a clear perspective of the history of financial regulation
Year of publication: |
2020
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Authors: | Davidson, Elizabeth |
Publisher: |
[2020]: [S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (38 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | In: The Journal of Corporation Law, 2019 Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 21, 2019 erstellt |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012832035
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