INTRODUCTION Contributed by: James Burnie, gunnercooke llp
The result of this lack of cohesion creates regula- tion arbitrage opportunities, as firms can structure to address those markets with the lowest barriers to entry – however not always to the benefit to con- sumer. It can also harm cross-border businesses, such as those providing cross-border stablecoin payments, by adding friction to processes, which drives up costs and undermines utility. We are seeing regulators take steps, through organisations such as FATF and IOSCO, to create a more uniform interna- tional approach, however this is not easy to achieve as there can be geopolitical tensions that challenge such efforts. For example, the recent proliferation of US denominated stablecoins is generally to the ben- efit of USA (as bringing money into US institutions), whereas other jurisdictions such as Korea and the EU will generally be less enthusiastic about developments that could encourage money moving outside of their jurisdictions.
Currently, therefore, the only real certainty is com- plexity, given the evolving patchwork of regulatory approaches we are seeing, making it intrinsically dif- ficult for firms to correctly position themselves. This guide seeks to alleviate some of the pain for firms in this respect, by giving a high-level overview of the dif- ferent approaches we are seeing in major jurisdictions.
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