How to Regulate the Future Now and How to Unchain Blockchains
Countries need to experiment, learn, make mistakes and collaborate if they want to succeed in the emerging world of blockchains and tokens.
This could be one way to summarize the content of talks delivered at a conference ‒ “Blockchain – The Game Changer of the 4th Industrial Revolution” ‒ held in Brussels this Thursday. Representatives of the European Commission, European Parliament, European Central Bank, as well as a few hundred attendees including industry regulators, startups, investors, entrepreneurs, and academics from Europe, North America, Australia and Asia were all present at the event.
“Blockchain has empowered a young girl in Zimbabwe not to save her money but to invest and change the lives of many people and hopefully one day get a good return on her investment,” enthused Antanas Guoga, MEP and host of the conference organized in cooperation with Blockchain Centre Vilnius and the diplomatic representations to the EU.
However, when the world is moving so fast, traditional ways of managing risk might not be enough if governments want to help ‘a girl in Zimbabwe’ use all the potential blockchain can offer.
“There is no way we can predict 10 years of innovation. Let's do it in a more collaborative way,” suggested David Siegel, CEO of The Pillar Project, a cryptocurrency and token wallet developer.
According to the speakers, the regulation of the crypto world is a very complicated task, while some participants even doubted that it could be regulated at all. One of the main problems is the lack of clear definitions, while the tokenization of assets, competition between countries, and different regulatory approaches makes this even more challenging.
“What are we going to regulate if we don’t have clear definitions?” Paulius Kunčinas, Chairman of the Board at Blockchain Centre Vilnius, asked rhetorically.
And it doesn’t seem that the problem will be solved anytime soon, in the EU, at least. For example, the definition of a security token in the EU might only be confirmed after the elections of the European Parliament to be held in May 2019.
But that's not the only challenge.
"How do we create a regulatory framework where 99% of all wealth in the near future will be in the form of a token, that's the real question!" stressed Greg Van den Bergh, CEO of Bankorus, a developer of a blockchain-based private wealth management platform, and partner at the event.
How to get into the front row
Meanwhile, Kristof Van de Reck, interim president of The NEM.io Foundation, which promotes the use of the NEM blockchain, stressed that regulation globally is challenging because industry players in different regions use their own rules.
For example, cryptocurrency exchanges in Russia and China are not interested in anti-money laundering measures, according to Van de Reck.
Therefore, Raymond Knops, Dutch State Secretary for Home Affairs and Kingdom Relations, suggested that a regulatory paradigm shift needs to be created, which is not an easy task due to the existing habits among governments.
“The message is: you must make mistakes in order to move forward,” said Knops, explaining that states must experiment if they want to be in the front row.
Meanwhile, Kazuyuki Shimamura, Director of the Financial System Stabilization Planning Office at the Financial Services Agency of Japan, added that due to local legislation, the Japanese yen now accounts for more than half of all traditional fiat currencies traded into Bitcoin. (The Japanese government last year amended its banking law and introduced the Virtual Currency Act.)
On the other hand, Moe Adham, co-founder of Bitaccess, a Canadian blockchain company, shared what happens when the crypto industry is not comfortable with local regulations.
“Ethereum was founded in Canada, but now it’s known as a Swiss project,” Adham explained, adding that crypto industry players are ‘very nomadic’ and countries are at risk of losing talents and might fail to win the investment race.
“The fast will eat the slow and no one wants to be eaten,” concluded Taavi Roivas, Member of the Estonian Parliament, and former Prime Minister of the country.
However, Vilius Šapoka, Finance Minister of Lithuania, reminded the attendees and participants that in either case, when experimenting with new technology and its regulations, countries should not fall for the illusion that there are no risks.
"From a government point of view, we have to put together policy, innovation and customer protection, which is of course a challenge, but I believe we are all facing these issues," added Gyu-Myoung Lee, adjunct professor of the Korea Advanced Institute of Science and Technology.
Disclosure: Cryptonews.com is backed by Antanas Guoga.