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Country Assessment Methodology
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The Blockchain & Cryptocurrencies Regulation Index is designed to answer the question, which countries of the world offer the most enabling conditions for the implementation of business projects associated with blockchain and cryptocurrencies. An enabling environment for the implementation of business projects related to blockchain consists in several dimensions: political environment, legal environment, and infrastructure environment.
1. Political environment (1-10)
Doing business requires confidence in the overall stability of the political environment in a country. This implies the existence of a clear playing field, which evolve as a result of a consensus of the main stakeholders. In the Index, the political environment is analyzed by the attitude of the main institutional political actors, such as: (1) Head of state (president, prime minister), (2) Parliament, (3) Central Bank, (4) Government, (5) Courts, (6) Leading banks, (7) Associations uniting business and blockchain enthusiasts. The Index includes measurements of the level of consensus of these stakeholders (the level of mutual agreement between the actors) and the content of this consensus (positive or negative attitude) in a specific country with respect to the development of blockchain technologies. Depending on the highlights, the opinions of political entities are arranged within the SWOT-analysis paradigm.
2. Legal environment (1-10)
As part of the Index, the assessment of general legal environment is based on the degree to which the regulatory environment is enabling for the development of activities associated with blockchain and cryptocurrencies.
Legal environment combines four main criteria: (1) Regulatory convergence (the consistency of norms in various areas of law, approaches by various regulatory bodies, law enforcement and judicial practice with respect to the regulation of blockchain and cryptocurrencies); (2) The definiteness of legal regulation (the existence of special legislation that comprehensively regulates all aspects of activities associated with blockchain and cryptocurrencies); (3) Stability of legal regulation (the assessment of the established rules stability in the medium term (3 to 5 years); (4) Adequacy of legal regulation (the assessment of legislation and enforcement practice adequacy for blockchain and cryptocurrencies projects development).
Since the conditions of legal regulation are affected by the degree of the implementation of the rule of law in a particular country, it is necessary to weigh the impact of the indicator comparing the situation in different countries with respect to the general compliance with the rule of law. To this end, the Index relies on data from The World Justice Project's Rule of Law Index.
3. Infrastructure environment (1-10)
The infrastructure environment includes a set of conditions that ensure the possibility for the implementation of projects based on distributed ledger technology. These include the development of technological infrastructure (Internet penetration, broadband access, mobile and telephone communications), degree of digitalization of individual segments of society, general literacy of the population, as well as the conditions for doing business in a particular country.
The indexing of a country's infrastructure environment is based on the indicators borrowed from established indices (normalized indexes values): the UN's E-Government Development Index and the World Bank's Doing Business.
General formula of the Blockchain & Cryptocurrencies Regulation Index (BСRI) combines assessments of political environment, legal environment and infrastructure environment:
The assessments of the Blockchain & Cryptocurrencies Regulation Index for the development of business projects associated with blockchain and cryptocurrencies is placed on an ordinal scale from a more enabling to a less enabling environment:
Rather not enabling;2.1–4.0