Take This Chance to Shape Crypto Regulation
The Global Financial Innovation Network (GFIN), a new group of global regulators, are asking for feedback on the consultation questions, which could help develop regulations for fin-tech firms, including crypto projects.
The GFIN, put together following an initiative by the UK Financial Conduct Authority (FCA), has released its first “consultation document” on the issue of regulatory sandboxes for fin-tech firms.
Among other things, the document proposes that regulators in different countries should work together to “support responsible innovation” in areas such as distributed ledger technology and initial coin offerings (ICOs), as well as requirements pertaining to know-your-customer (KYC) and anti-money laundering (AML).
The GFIN is waiting for the feedback from interested parties across different jurisdictions until 14 October. “In the autumn, we will review feedback and agree on next steps,” according to the document, published on the website of the FCA.
The GFIN network has previously proposed setting up a “global sandbox” that will allow fin-tech and blockchain companies to test their technologies across national borders, serving both consumers and other businesses. The GFIN is currently made up of 12 regulatory bodies from a variety of countries and territories, ranging from East Asia, to the Middle East, Europe, and North America.
With regulations covering cryptocurrencies still being very murky, the proposed regulatory sandbox could potentially become an enormous benefit for companies working with blockchain technologies, both as a form of fundraising and otherwise.
However, not everyone shares this positive approach towards regulatory sandboxes. Earlier this week, the New York Department of Financial Services used unusually harsh language when it said that it is “strongly opposed” to a decision by the US Treasury to allow fin-tech companies to explore new technologies that may fall outside of the current regulatory framework.
“The idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous…Toddlers play in sandboxes. Adults play by the rules,” superintendent Maria T. Vullo said in a response published on the website of the New York Department of Financial Services.
As previously reported by Cryptonews.com, a research has shown that both governments and the fin-tech industry can benefit from the creation of regulatory sandboxes that offer a testing ground for new business models that are not covered by existing regulations.
In the past, South Korean politicians have also advocated for the establishment of a “sandbox testbed” in the country’s Jeju Science Park, offering a glimmer of hope for the legalization of ICOs in the country.