This opinion piece on digital asset regulation is from Max Heinzle, CEO of 21X, the EU regulated digital asset exchange

The US is sending a powerful signal to the world: digital assets are here to stay. This growing enthusiasm, spearheaded by the new administration, is certainly a welcome development. However, as we celebrate this embrace of innovation, I believe we must also recognize the crucial role of regulation in safeguarding investors and ensuring the long-term health of this growing industry.

The winds of change are blowing through Washington. With it comes a wave of crypto zeal, spearheaded by nominating Paul Atkins at the SEC and appointing David Sacks as the White House Crypto Czar. An executive order signalling support for the industry by the new US president, Donald Trump – now a true advocate of the opportunities afforded by crypto – further cements the impression that the US is set to embrace it with open arms. At the same time, all the signs are there that as the US embraces crypto, it will also shift towards a more relaxed regulatory environment.

It is important to remember that while cryptocurrencies dominate mainstream media headlines and dinner party conversations, they actually represent just one piece of the rapidly expanding digital asset universe. The true revolution lies in the tokenization of traditional assets like stocks, bonds, real estate, and even intellectual property. This represents a paradigm shift in finance, with the potential to unlock trillions of dollars in value and democratize access to investment opportunities. Even Larry Fink, CEO of Blackrock, the world’s largest asset manager, recognizes this potential, stating that tokenization could “democratize investing in ways we can’t imagine.”

So, while the transformative potential of crypto and – more importantly – digital assets, is established, its full potential can only be realized within a secure and regulated environment. Institutional investors – the key to unlocking this future – require confidence and clarity. They need assurance that their investments are protected and that the market operates with integrity. This is where Europe’s regulatory framework, spearheaded by the European Securities and Markets Authority (ESMA), shines.

ESMA has been instrumental in developing a robust regulatory framework for digital assets, including the groundbreaking Distributed Ledger Technology Pilot Regime (DLT Pilot Regime). This regime allows for the testing and development of DLT-based market infrastructures within a controlled environment, fostering innovation while ensuring compliance with existing financial regulations. 21X has worked tirelessly to meet the stringent requirements of the DLT Pilot Regime, and in doing so become the first company to receive a license from the EU to operate a fully regulated digital asset exchange. When we launch our 21X exchange in the spring, this landmark achievement will demonstrate the effectiveness of a regulatory approach that fosters innovation while ensuring investor protection and market integrity.

The further EU regulations of MiCA (Markets in Crypto-Assets), which build upon the foundation laid by the DLT Pilot Regime, provide a comprehensive framework for the entire digital asset ecosystem, not just cryptocurrencies. By establishing clear rules for issuance, trading, and custody of digital assets, MiCA fosters trust and transparency, attracting institutional capital and paving the way for mass adoption. This aligns with Fink’s call for the SEC to “rapidly approve the tokenization of bonds and stocks,” recognizing the need for regulatory clarity to propel this innovation forward.

Regulation is crucial for addressing any perceived systemic risks associated with digital assets. The interconnectedness of the digital assets market with traditional finance is growing rapidly. Unregulated markets could potentially pose a threat to financial stability. Europe’s proactive approach to regulation mitigates these risks by promoting responsible innovation and ensuring that crypto activities are subject to appropriate oversight.  

Of course, finding the right balance is critical. Overly burdensome regulation could indeed stifle innovation and drive businesses away. However, the European approach is not about stifling growth; it’s about creating a sustainable ecosystem. By providing clear rules and guidelines, regulators are giving businesses the confidence to invest and innovate, knowing they are operating within a clear legal framework.  

The argument that a “light touch” approach will attract more investment is shortsighted. While it may lead to a temporary surge in speculative activity, it ultimately undermines the long-term health of the industry. A lack of regulation breeds uncertainty and risk, which will deter institutional investors and hinder the wider adoption of digital assets.  

The recent licensing of 21X is testament to the viability of this approach. It demonstrates that regulation and innovation can co-exist, and that compliance can be a competitive advantage. By embracing regulation, Europe is positioning itself as a global leader in the digital asset space, attracting responsible players and fostering a sustainable ecosystem for the future.  

While the US may be embracing crypto with enthusiasm, Europe’s focus on comprehensive regulation, led by ESMA, is the more prudent and farsighted approach. By establishing a clear and secure framework for the entire digital asset ecosystem, Europe is not only protecting investors but also laying the groundwork for a future where tokenized assets revolutionize the world of finance. This commitment to responsible innovation, echoing the sentiments of industry leaders like Larry Fink, will ultimately drive greater adoption and unlock vast economic potential.

The US is showing signs that it may be charting its own course, Meanwhile, Europe’s commitment to a regulated digital assets and crypto market is the right path forward. Regulation is not the enemy of innovation; it is the foundation for sustainable growth and mainstream adoption.

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Here’s what you might be missing out on:

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So how do you get started?

👉 First, grab a supported wallet like Keplr Wallet or Leap Wallet and make sure your XPRT is on the Persistence Core-1 chain. You can follow the tutorial HERE. 

👉 Then, pick a validator of your choice through the 'Staking Page'. Choosing the right validator is crucial. Consider commission rates, voting power, and uptime. Avoid those with very high voting power, inactive status, or high commission rates.

Ready to stake XPRT?

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a) Blog: https://blog.persistence.one/2024/12/02/a-step-by-step-guide-to-staking-xprt-on-persistence-one/…

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Where to get XPRT?

1) Centralized Exchanges

2) Decentralized Exchanges

Want to learn more about Persistence One?

Check out their blog, there is a lot of great information there including other guides.

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The Stellar Development Foundation (SDF) is thrilled to announce a two-year partnership with OpenZeppelin, a leader in blockchain security and smart contract development. This collaboration brings OpenZeppelin's expertise in smart contract standards and security to Soroban, the native Stellar smart contract platform.

OpenZeppelin has earned its sterling reputation by establishing standards and security frameworks in the Ethereum ecosystem. Their work has been instrumental in shaping how developers build secure, standardized smart contract applications. Now, they're bringing this same level of expertise to Stellar through the development of the Stellar Library.

The long-term partnership, spanning from January 2025 through December 2026, will deliver a comprehensive suite of tools and resources for Stellar developers. At its core is the Stellar Library, which will provide foundational smart contracts, advanced token standards, and cryptographic utilities. These building blocks will enable Stellar developers to create sophisticated applications while leveraging audited code and maintaining the highest security standards.

Security is paramount in this collaboration. The partnership includes dedicated security audits, with 40 Auditor Weeks allocated over the two-year period. Additionally, OpenZeppelin will establish and operate a bug bounty program for the Stellar Library, demonstrating our shared commitment to maintaining top-notch security measures.

Beyond the library itself, OpenZeppelin will develop a suite of open-source tools aimed at streamlining development, deployment, and security processes for Stellar smart contract builders. These tools, encompassing open-source versions of Defender tools such as Code Inspector, Relayers, Monitors, and more, will be freely available through OpenZeppelin's public GitHub repository, fostering an open and collaborative development environment.

The integration of Stellar smart contracts into OpenZeppelin's Contracts Wizard will further simplify the development process. Stellar developers will soon be able to generate smart contracts in seconds for widely used standards like ERC20, ERC721, ERC1155, and Governor. This powerful tool allows builders to leverage proven patterns and standards with ease, further reducing time-to-market and increasing reliability.

By joining forces with OpenZeppelin, SDF is bringing the best-in-class smart contract development standards to the Stellar ecosystem. We're excited to work with the OpenZeppelin team to create the foundation for the next generation of applications built on Stellar.

Stay tuned for updates as we begin rolling out these new tools and resources for the Stellar developer community.

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