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 the blockchains and tokens.
This could be the summary of talks 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 from regulators of the industry, startups, investors, entrepreneurs, and academics from Europe, North America, Australia and Asia were present at the event.
“Blockchain empowers a young girl in Zimbabwe not to save her money but to invest and change lives of many people and hopefully one day get a good return on her investment,” said Antanas Guoga, MEP and host of the conference, organised 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 risks might not be enough if governments want to help ‘a girl in Zimbabwe’ to 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,” said David Siegel, CEO of Pillar Project, a cryptocurrency and token wallet developer.
According to the speakers, regulation of the crypto world is a very complicated task, while some of the participants even doubted that it could be regulated at all. One of the main problems is lack of clear definitions, while 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 could be solved anytime soon, in the EU, at least. For example, definition of a security token in the EU might be confirmed only after the elections of the European Parliament to be held in May 2019.
How to get into the front row
Meanwhile, Kristof Van de Reck, interim president of NEM.io Foundation, which promotes the use of the NEM blockchain, stressed that the regulation on a global scale 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 already existing habits among governments.
“The message is: please make mistakes in order to move forward,” Knops said, explaining that states must experiment if they want to be in the front row.
Meanwhile, Kazuyuki Shimamura, Director of Financial System Stabilisation Planning Office at Financial Services Agency of Japan, added that due to the local legislation, the Japanese yen now accounts for more than half of traditional fiat currencies that are 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, told what happens when the crypto industry is not comfortable with local regulations.
“Ethereum was founded in Canada, but now it is known as a Swiss project,” Adham said, adding that crypto industry players are ‘very nomadic’ and countries are at risk to lose talents and might fail to win the race for investments.
“The fast will eat the slow and no one wants to be eaten,” concluded Taavi Roivas, Member of Estonian Parliament, former Prime Minister of the country.
In either case, when experimenting with new technology and its regulations, countries should avoid an illusion that there are no risks, Vilius Šapoka, Finance Minister of Lithuania, reminded.
"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," Gyu-Myoung Lee, adjunct professor of Korea Advanced Institute of Science and Technology, added.
You can watch discussions online here.
Disclosure: Cryptonews.com is backed by Antanas Guoga.
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