Advancements in blockchain and distributed ledger technology have had a revolutionary impact across many sectors, particularly finance. With these technologies likely to play ever more prominent roles in our economies, this Model Law for Virtual Assets provides Commonwealth member countries with a regulatory framework that will give much-needed legislative clarity to financial markets and vital protection to customers.
The efficiency, transparency and security of distributed databases have revolutionised the way we transact and interact with people and systems. Like any technology, this has also resulted in concerns relating to financial security and market integrity, necessitating the creation of robust regulatory frameworks in financial, prudential and AML/CFT spheres across the globe.
Regulation of these technologies is particularly important for Commonwealth countries, among whom there has been a large upswing in the adoption of Virtual Assets in recent years: India, Pakistan, Nigeria, Canada, Bangladesh and the United Kingdom were all among the top 20 countries ranked in the recent Geography of Cryptocurrency report by Chainalysis.
This Model Law focuses on identifying and mitigating the risks associated with covered Virtual Asset activities: applying preventive measures; putting in place licensing and registration requirements; implementing effective supervision on a par with the supervision of related financial activities; and facilitating effective enforcement. Relevant Financial Action Task Force recommendations have been considered in the drafting of this Model Law. It is intended to assist member countries to adhere to these and other requirements relating to the implementation of the Virtual Asset and Virtual Asset Service Provider regimes in their respective jurisdictions, as they deem appropriate.
