Can effective policymaking and government intervention serve as a catalyst for growth and societal progress, or should the market be entrusted to determine its destiny? This was the focus of an important panel discussion at the recent London Blockchain Conference 2024.
The panel featured several top legal and financial experts, as well as government officials, including:
- Alun Cairns MP (Member of UK Parliament)
- Dean Armstrong (KC at Maitland Chambers)
- Lavan Thasarathakumar (Board Member at Global Digital Finance)
- Tom Spiller (Legal Director at Rosenblatt)
- Stefan Kromolicki (Consultant at Apco)
- Mayor Hillary Schieve (Mayor of the City of Reno)
Educating and developing policy
Cairns began the discussion by explaining that the number of his colleagues in parliament who could describe or explain what blockchain is would be minuscule. “They would automatically think of cryptocurrencies and the dark web – so it has an understanding challenge. As a result, without politicians driving policy and communicating how blockchain can bring about a transformational difference in so many public service areas. People don’t need to understand the mechanics, or technology behind something, to understand the benefits.’
Cairns said that one of the key tasks should be differentiating blockchain from cryptocurrency. There should also be a drive to highlight exactly what blockchain does to help improve policy outcomes, he said. ‘It’s about focusing on discrete areas of policy where blockchain can be transformational.’
Spiller noted that another big factor to consider in developing blockchain policy is geography. He noted that some countries see the technology to resolve market or state failure – such as Argentina, Turkey or Ukraine. However, other countries might see it more as a remittance system which can be used to avoid expensive transfer costs, he said.
There are still others who use the technology for financial speculation – either through active trading or as a form of pension, he said. He added that there are some governments which simply do not want to adopt blockchain as they see it as a risk to existing financial systems.
New regulations and perception problems
The Markets in Crypto Assets (MiCA) Regulation in the EU, which came into effect earlier this year, established a comprehensive regulatory framework for digital assets, including issuers and service providers. Digital asset service providers, like exchanges and wallet providers, will need licences from national regulators to serve EU citizens.
MiCA also introduced new classifications for various digital assets, specific rules, proof-of-funds requirements for stablecoin issuers, and a requirement for companies issuing digital assets/coins to publish a white paper detailing the project and potential risks.
Despite the introduction of MiCA, and other positive regulatory developments, Palaznik noted that these regulations are perceived differently based on cultural and historical technological exposure.
She pointed to the fact that many people were previously hesitant about any regulation as it was seen as antithetical to the nature of blockchain. However, many people changed their minds after the FTX scandal which saw millions of dollars lost, she said.
BSV Blockchain is pro-regulation
BSV Blockchain is pro-regulation and believes that the global adoption of blockchain technology requires enterprises and lawmakers to become comfortable with legal compliance by industry participants.
To ensure the development of a regulatory environment that both fosters lawful conduct and facilitates innovation, BSV Blockchain regularly engages with leading policymakers to advise on the development of positive policy.
Regulation provides clarity on legal obligations, encouraging compliance, good governance, and accountability. It also fosters innovation and market development by providing a clear legal framework, building trust, and attracting investment.
