Do Web3 Businesses Dream Of Electric Offices?

• Published date: 10 August 2022
• Subject Matter: Finance and Banking, Technology, Financial Services, Fin Tech
• Law Firm: PANDA Law
• Author: Mr Dhrupad Das, Nishchal Anand and Pranay Agrawala

Do Web3 businesses dream of electric offices?

Introduction

The emergence of Web 3 technologies such as blockchain has the potential to cause a paradigm shift in the way businesses are conducted globally. The positive impact of Web 3 technologies is not limited to existing businesses but also individual artists and creators.

While some applications of Web 3 technologies, especially financial services, may currently pose unique challenges to regulators and businesses, many other use cases, including record keeping, new mediums of access to content and services such as through metaverse platforms and non-fungible tokens are creating unprecedented experiences for users and novel opportunities for businesses. In this article, we discuss both, regulation of and opportunities in the Web 3 space.

Law today

As with laws and regulations surrounding technology and finance across the globe, most nation states adopt their own understanding of blockchain and blockchain enabled technology into laws and regulations. This leads to a discordant regulatory landscape, across jurisdictions, for business to navigate. Adding to this uncertainty, international standards or treaty laws surrounding common objects often take years, if not decades, to materialize and be implemented.

Presently, we see very few economically powerful nations entering into the realm of regulating cryptocurrency in a business forward manner. The United States of America, for example, has taken a broad approach and recently introduced a bipartisan bill titled the Lummis-Gillibrand Responsible Financial Innovation Act. This bill seeks to regulate all things web3 by creating a regulatory framework for digital assets; pioneer legal reform and regulation across various regulatory entities; and update current laws with language regarding digital assets. We should expect similar legislation in many major developed jurisdictions.

Juxtaposed to this approach, in a bid to attract investment, several developing nations have created legislation targeted at enhancing the ease of doing business for web3/crypto businesses. The creation of bespoke legal entities such as 'Foundations' in the BVI that espouse the philosophies of new age web3 governance models such as DAOs have allowed newly minted web3 platforms to find a home and have a juristic person representing it.

Business today

Blockchain is a protocol that can and will be implemented in various ways on the internet and in ITES. There are, of course, new business...