Abstract:
How should legislators and regulators cope with technological innovation in the field of financial services? Move quickly, top-down, to provide legal certainty - or let things develop bottom-up, with decentralised legislators and agency initiatives preparing the ground? Over the last years, stablecoins, i.e., crypto assets that are framed as payment instruments and promise stability through a peg to underlying reserves,2 have been a paradigm example for regulatory strategies and cultural differences between the U.S. and the EU. The U.S. has been inclined to take a bottom-up engagement, coupled with a distrust of government intervention, while the EU was more disposed towards quickly moving forward with comprehensive regulation, aimed at insulating financial consumers from anticipated harm.
