Since the introduction of blockchain a decade ago, the pace of development, experimentation and application has continued to accelerate. In 2018, the market cap of all existing crypto-assets reached a record high in January, only to tumble by well over 70 percent by year-end. While initial coin offerings (“ICOs”) are still occurring, the earlier frenzy has largely dissipated. Even so, the estimated number of owners of cryptoassets increased globally, and more centralized exchanges and trading platforms came onto the scene, with a substantial increase in estimated trading volume. On the business front, the enterprise application of blockchain technology continued to rise, with more financial institutions and other commercial companies experimenting with the incorporation of blockchain into their existing business. In 2018, many enterprise use cases moved from the proof-of-concept stage to experimentation and beyond. International and national regulators continued to struggle to catch up with the fast developing technology and its application beyond the sphere of virtual currency.
National regulators are drawing on both rule-making and enforcement action to protect customers and ensure market integrity. In so doing, many national and international regulators have acknowledged the inadequacy of the existing regulatory framework in addressing changes brought on by the technology, leading to surveys, consultation projects and proposed new rules.
In this update, we have reviewed key regulatory and other developments that took place in 2018 in a number of jurisdictions. As the following shows, regulatory responses to the relentlessly fast-developing technology vary significantly from nation to nation and even within a single nation like the United States. Indeed, it is possible that the global regulatory landscape for blockchain will become highly fractured in the near future. That would not be ideal for blockchain technology, which was created to transcend geographical and political borders.
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