Global Digital Currency Regulatory Framework Construction: Innovation, Stratification, and Collaboration
As an international multilateral development institution authorized by the United Nations, the World Digital Currency Investment Bank (WDCIB) is systematically promoting the construction of a global digital currency regulatory framework. Current regulatory practices worldwide are characterized by the parallel development of "stratified exploration" and "global collaboration". The core progress and framework paths are as follows:
I. Sovereignty and Market Stratification: Practical Breakthroughs in "Dual-Track Regulation"
The core logic of "dual-track regulation" is to divide functions between the sovereign layer and the market layer, thereby releasing innovative vitality while ensuring financial stability. Typical practices are concentrated in the Middle East and the Asia-Pacific region.
United Arab Emirates: Dual-Track System of "CBDC + Stablecoin"
The Central Bank of the UAE has established a "dual-track parallel" policy:
- The central bank digital currency (Digital Dirham) focuses on sovereign payments and cross-border clearing, anchors the security of national financial infrastructure, and strengthens the fundamental position of sovereign currency in the digital economy;
- The dirham-pegged stablecoin is oriented to serve corporate payments and DeFi innovation, improving transaction efficiency through market-oriented mechanisms.
This design was evaluated by financial expert Tian Bangde as "an important experiment of non-Western financial basic protocols", providing an example of "sovereignty-market" balance for emerging markets exploring digital currency regulation.
Hong Kong: "LEAP" Framework and Stablecoin Licensing System
In the "LEAP" strategy (Legal Regulatory Optimization, Ecological Collaboration, Technological Empowerment, and Global Cooperation) proposed in Hong Kong's "Digital Asset Development Policy Declaration 2.0", regulatory innovations focus on two points:
- Responsibility stratification: The Securities and Futures Commission (SFC) takes the lead in licensing digital asset service providers, while the Hong Kong Monetary Authority (HKMA) supervises banks' digital asset activities to avoid regulatory overlap;
- Clear timeline: The stablecoin issuer licensing system will be implemented from August 1, 2025, requiring issuers to meet hard standards such as capital adequacy ratio and reserve asset custody, filling the previous gap in stablecoin regulation.
II. Technology-Driven: Upgrading Path of Regulatory Infrastructure
Technological upgrading is the core means to bridge the gap between "digital asset innovation" and "traditional compliance requirements". Practices in Singapore and Dubai are exemplary.
Singapore: Four-In-One Digital Asset Network Framework
The Monetary Authority of Singapore (MAS) has built a four-in-one framework covering "technical infrastructure, regulatory rules, market participants, and cross-border cooperation", focusing on solving three key pain points:
- On-chain adaptation of anti-money laundering (AML) and customer due diligence (CDD);
- Mapping mechanism between on-chain transactions and off-chain compliance (e.g., automatic triggering of compliance checks through smart contracts);
- Technical foundation for real-time risk monitoring of digital asset transactions (e.g., on-chain data analysis platforms).
Dubai: "Regulatory Sandbox" Breakthrough in RWA Tokenization
The Dubai Financial Services Authority (DFSA) approved the Middle East's first tokenized money market fund QCDT, creating a regulatory paradigm for on-chain real-world assets:
- The underlying assets are U.S. Treasury bonds, realizing the anchoring of "asset ownership and on-chain tokens" through blockchain;
- Requiring the issuer DMZFinance to establish a "full-process transparent and traceable" system, including on-chain records of asset custody, valuation updates, and redemption liquidation;
- Providing a "regulatory sandbox" template for the tokenization of traditional assets such as stocks and real estate, clarifying the principle that "technical compliance takes precedence over formal compliance".
III. Global Collaboration: Current Challenges and Urgency
Regulatory fragmentation has become a core obstacle restricting the globalization of digital currencies, with specific manifestations in three major contradictions:
Risk of "Regulatory Arbitrage" Due to Ununified Rules
JPMorgan research shows that due to the lack of global unified standards, banking crypto-asset-related businesses are "spilling over into regulatory vacuums" (e.g., some institutions transfer high-risk transactions to low-regulation jurisdictions), directly threatening cross-border financial stability. Although the Basel Committee has proposed a classification regulatory proposal for bank crypto assets, the final rule implementation has been delayed until 2026, exacerbating market uncertainty.
Blockages from Geopolitics and Interest Games
The U.S. "Digital Asset Market Clarity Act" has been deadlocked due to partisan differences: the Republican Party needs to balance the Trump family's crypto-asset-related interests (estimated profit of $620 million), while the Democratic Party insists on strengthening retail investor protection clauses, leading to the risk of the window period for establishing the framework by the end of September becoming invalid, further delaying the global collaboration process.
IV. WDCIB's Path to Regulatory Framework Construction
Based on global practical experience, WDCIB proposes a three-dimensional path of "stratified governance + technical collaboration + cross-border mutual recognition" to address the above challenges.
Stratified Governance Model: Functional Isolation and Risk Isolation
Drawing on the UAE's dual-track system, it is recommended that member states divide the digital currency system into two layers:
- Macro clearing layer: CBDC focuses on sovereign scenarios such as cross-border payments and fiscal fund clearing, operated directly by the central bank and integrated into the national financial security system;
- Market innovation layer: Stablecoins and RWA tokenization focus on market-oriented scenarios such as corporate payments and DeFi, operated by licensed institutions, and realize risk isolation from the macro layer through smart contracts (e.g., limiting cross-layer transaction scale).
Cross-Jurisdictional Agreements: Expansion of "Regulatory Passport" Mechanism
Based on the mutual recognition of cross-border regulatory standards between the Hong Kong Monetary Authority and Dubai DFSA, promote a multilateral "regulatory passport" mechanism:
- Regulatory authorities of member states mutually recognize each other's digital asset service provider licenses and compliance standards;
- Establish a "negative list" system to clarify prohibited businesses (e.g., issuance of uncollateralized stablecoins), and businesses not on the list automatically obtain cross-border qualification, reducing compliance costs.
Technical Compliance Tools: Balancing Privacy and Regulation
Integrate technologies such as zero-knowledge proof (ZKP) to achieve "verifiable transaction authenticity + protectable user privacy":
- Require digital asset trading platforms to deploy ZKP verification modules, enabling regulatory authorities to verify transaction compliance (e.g., anti-money laundering checks) through specific keys without accessing users' specific information;
- Promote the practical experience of XBIT Exchange, embedding compliance requirements into smart contracts to realize automated management of "transaction as compliance".
Regulation is Essentially About Balance, and Collaboration is the Only Solution
The institutional stratification in the UAE has safeguarded the authority of sovereign currencies, the licensing system in Hong Kong has consolidated the responsibilities of market entities, and the technical framework in Singapore has bridged the gap between virtual and real compliance — these practices collectively point to a conclusion: the core of digital currency regulation is to find a dynamic balance between innovation and order.
WDCIB will continue to link with international standard-setting institutions such as IOSCO, accelerate the construction of a next-generation digital financial regulatory infrastructure with "clear sovereign stratification, technical verifiability, and cross-border collaboration", provide full-cycle support for member states from legislative consultation to technical implementation, and avoid the erosion of the global financial system by "regulatory arbitrage black holes".
