Future-proofing blockchain regulation — is it possible?
As the number of companies and industries exploring blockchain technology continues to swell, an air of ambiguity still hangs over those operating within the space when it comes to regulation. When money is on the line, ignorance is no longer bliss but rather a tangible risk. Without clear regulation, only the bravest will venture into new and uncharted technology spaces, meaning that many entrepreneurs are being dissuaded from embarking on potentially groundbreaking innovation, and instead sit on the sidelines for fear of inadvertently running foul of the law. As such, it is incumbent on governments and regulators to provide a robust system of oversight for Distributed Ledger Technology (DLT), creating an environment where blockchain innovators can thrive.
Oversight, through regulatory process, is an exciting prospect for the industry, but a lack of shared knowledge between the public and private sector has the potential to create a sizeable disconnect. This tension may seem inevitable as traditional regulatory practices can infringe upon, and even destroy, creative development.
Even amidst the cutting-edge technologies of today, there are distinct murmurs of the death of innovation and developer decline as the progress of entrepreneurs, inventors, and startups is curtailed by ever-stricter security measures. While this legislation around data protection, privacy, security, and transparency is fundamental for technological stability, it should not come at the expense of creative development.
The blockchain ecosystem sees regulation as more than a protective measure. Regulatory oversight within this new and disruptive sector offers, for the first time, a framework of support and stability that, rather than deter industry progress, actually encourages it.
Those who have pushed the technology to the brink of mainstream adoption now recognize the need for an environment that provides critical breathing room for economies and societies to fully realize its transformative potential. This industry is still in a highly experimental phase and so cooperation between regulators and business is key to increasing a mutual understanding, as opposed to hard and fast rules handed down without due consultation.
This is also an opportunity to create collaborative and mutually beneficial frameworks that can rejuvenate and revolutionize outdated and unbending systems of governance.