Effective policy making should seek to balance the competing priorities of innovation and improvement alongside the protection of consumers and the integrity of financial systems. This is the view of Shelley Grayson (Chief Compliance Officer of Gnosis Pay) who was speaking on the sidelines at the London Blockchain Conference.
Grayson cautioned that rogue policymaking occurs when one of these competing interests has a louder voice at the dealmaking table. ‘Where we see policymaking that is productive and engages stakeholders in a bipartisan and grassroots way. That is when we see effective policy outputs, she said.
A difference in priorities
Grayson believes that it is legitimate for Web3 users to want a pseudonymous presence while online but that the issues around banking and identification typically stretch much further than that.
‘Not everybody wants everybody to know their business and financial regulation not only want to dilute those tools that are available for pseudonymity but also do a disservice to the unbanked and the underbanked,’ she said. ‘Realistically, the only way you can get a bank account or a payments account is to have a government-issued ID.’
Grayson said this applies to the vast majority of people in the ‘Global South’ who often face much harsher daily challenges like putting food on the table instead of paying to register with the government and banks.
A conflict in people’s heads
The other major debate surrounding this sector at present is the trade-offs between privacy and security, said Grayson. However, she noted that this was more of a false conflict that was taking place in people’s heads since the development of blockchain technology.
‘We have a blockchain and it’s an immutable record of what’s going on. If you can attribute and identify the destination, then people who are trying to launder funds will always be caught – it’s the worst possible way to do it because you can’t hide your footprints,’ she said.
‘So I think the privacy people and the financial regulation people should hang out a little more and develop some cross-domain expertise so they can do stuff that doesn’t just push their agendas’ she said.
Grayson says she is a big proponent of the transformative power of blockchain as a payments tool – especially for those people who are historically unbanked and underbanked.
‘The cost of payments is going to be a fraction of what’s currently available in traditional finance, and I believe this is a necessary change. To be charging people to spend their own money or accept money with such a huge markup at some point becomes an ethical problem,’ she said.
‘I think that tipping point has been reached and regulators should be more focused on the equity of payments and not only the technical standards that are the main concern of regulators.’
