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Key Talks: Interview with Ji Kim

The emerging legal trends in digital assets, the importance of clear regulatory frameworks and the future integration of digital asset technologies

Mark Galkevich
September 1, 2023
Key Talks
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Ji Kim, General Counsel & Head of Global Policy, Digital Assets

What emerging legal trends do you see shaping the market in the coming years? How are regulators and policymakers responding to the rapid growth of digital assets?

Crypto is emerging as a mainstream, time-tested asset class and innovation that is gaining mainstream adoption. We are seeing dedicated policy making efforts across the globe as jurisdictions look to foster market-enhancing innovation, safeguard consumers, and attract the best minds, operators, and innovators. For example, we are seeing the EU and UK embracing digital asset innovation and recognizing the need for clarity by way of regulatory frameworks. In the U.S., we are seeing the most credible, bipartisan legislative effort to date as lawmakers recognize the importance of and need for thoughtful and clear regulation of digital assets, including for stablecoins (e.g,. FIT for 21st Century Act and The Clarity for Payment Stablecoins Act). A critical item of importance with respect to any of these emerging legal regimes is clarity – clarity with respect to asset definitions, treatment under the law, compliance requirements, and so much more. With clear rules of the road, digital assets can continue on its now decades-long march to positively transform financial services and other industries.

Your work in global policy for digital assets must present complex challenges, especially across different jurisdictions. Can you share insights into the key challenges you face in harmonizing regulations and policies?

I actually view our work across jurisdictions as a benefit rather than a hardship – because crypto is truly global, it is important to learn about how this innovation is benefitting people and economies in different markets and cultures, and ensuring that any domestic policymaking efforts are informed by such learnings. For example, we have seen first hand how digital assets have played a critical role in helping get emergency funds to those in need during crisis situations, including to Ukraine early in the war or to Turkey and Syria after horrific earthquakes – our learnings regarding the cross-border and humanitarian benefits of digital assets help inform our overall policy recommendations. Additionally, we get to see what some leading first-mover jurisdictions are doing with respect to legal frameworks and can then share what has worked well and maybe not so well. Overall, the more knowledge and information-sharing we can bring to this new global asset class and area of innovation, the more likely we can advance harmonized regulatory frameworks.

With your background in both traditional law firms and crypto-focused companies, you've witnessed the intersection of regulation and innovation. What opportunities do you see for fostering innovation within the regulatory framework?

There is this misconception that innovators don’t want regulation – this is not the case at all; the biggest impediment to innovation and ongoing investment is a lack of clarity. Clear regulations allow innovators to bring to market the products that customers want in a safe and secure manner. This is good for the economy, innovation, and customer/investor protection. For this reason, I am seeing how important it is to have clear guardrails that protect against bad actors, but that allow space for innovation – some jurisdictions are moving quickly to create this environment; those that do not risk losing out in this critical area of development.

Ethics and corporate responsibility are vital in the financial world. How do you see these principles translating into the digital asset space?

Trust is what underpins financial services (and all industries), systems, and potential. And trust is built with end-users through ethical and responsible business practices. We have seen very unfortunate situations where this trust has been broken by unethical (i.e., fraudulent) behavior – and this should not be accepted morally and as a matter of law. I hope that the takeaway from such breaches of trust is that both industry and government have important roles: industry must take its responsibility seriously and invest in compliance and transparency, while the government must fulfill its responsibility of crafting clear and certain guardrails that allow good and responsible actors to flourish.

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