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Will crypto regulation stifle crypto innovation?

More regulation may be essential for crypto tokens to reach their potential, but a clunky approach risks strangling the industry. A smarter approach centered around potential market failures is the way forward.

In recent years, the rapid growth of blockchain technology and the increasing number of crypto tokens have transformed the world of finance, leading to a need to reconsider existing regulations. Crypto tokens, unique digital assets that are not controlled by a single central authority, can be used across borders and programmed to perform specific tasks, such as transferring value or executing smart contracts.

As regulators grapple with how to effectively oversee this new frontier of finance, it is essential to understand the underlying technology and its potential implications for the future of money and beyond.

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Author

  • Joshua Gans is Professor of Strategic Management and holder of the Jeffrey S. Skoll Chair of Technical Innovation and Entrepreneurship at the Rotman School of Management, the University of Toronto. He has authored a number of books, including “The Economics of Blockchain Consensus” (Palgrave, 2023) and “Entrepreneurship: Choice and Strategy” (Norton, 2024). He also serves as managing director of Core Economic Research and a co-founder of All Day TA.

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