Clear and concise regulations are needed in the blockchain and digital asset industry. This is a necessity not only to protect users from bad actors, but also so that the industry itself has clarity on where it falls within the law so that it can continue to grow and innovate.
This was a key panel discussion at the recent London Blockchain Conference which was hosted by Marcin Zarakowski (Chief of Staff at nChain and Executive Committee at Bitcoin Association) and included:
- Ben McKenzie (Actor & Author);
- Bryan Daugherty (Public Policy Director and Bitcoin Association for BSV)
- Yves Mersch (Member of the Executive Board at the European Central Bank)
Protections are needed to guide blockchain adoption
McKenzie began the roundtable discussion by detailing his reservations about the crypto asset market and emphasising the necessity of implementing regulations within the space. He particularly highlighted the importance of protecting individuals from exploitation and financial losses.
He added that most ‘cryptocurrencies’ fit the textbook definition of a security. ‘You put money into them, and you expect to make money from them without work. That’s an investment contract for me.’
Speaking from the perspective of regulators, Mersch pointed out that lawmakers typically need to adopt a proactive approach towards emerging technologies like blockchain. They should strive to comprehend how these innovations could disrupt the financial markets. He acknowledged the delicate balancing act regulators face, needing to facilitate the growth of new technologies while ensuring safeguards against exploitation.
‘Disruptive change is one of the elements that make the market economy superior to a centralised planned economy. But change also offers the opportunity to circumvent rules, and to have illicit activities. That’s where the less positive part of innovation has to be circumscribed,’ he said.
Regulatory clarity and direction needed
Daugherty discussed the ongoing efforts of himself and the BSV Association in collaboration with regulators to provide education about the crypto asset space. They aim to prevent failures similar to those witnessed at FTX.
‘They (digital assets) are often preying on those that are less fortunate. I think that’s one of the biggest concerns. Then, I started to notice people are understanding the conflict of interest that occurs. Think of FTX—you’re creating a token, putting the value on it, and exchanging it. There’s a serious conflict of interest there.’
McKenzie also stressed the need for regulators to establish clear terminology and classifications for crypto assets, especially in determining whether they should be legally considered securities. He also highlighted the influence of financial contributions from bad actors within the space to both the Democratic and Republican parties, which has somewhat distorted discussions.
BSV Association is pro-regulation
BSV Association 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, the Association regularly engages with leading policymakers to advise on the development of positive policy.
We believe that 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.