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What to expect from Bitcoin and blockchain regulation going forward

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What to expect from Bitcoin and blockchain regulation going forward

Bryan Daugherty, Global Public Policy Director for Bitcoin Association, emphasises the importance of regulation in legitimising blockchain technology.

Summary

  • Authorities in the US and EU are discussing blockchain and crypto-asset regulation to protect investors from bad actors.
  • Bryan Daugherty, Global Public Policy Director for BSV Blockchain Association, emphasises the importance of regulation in legitimising blockchain technology.
  • Rather than regulating the technology itself, the focus should be on regulating the use cases and applications built on blockchain.
  • Clear and well-thought-out regulations can drive blockchain adoption and prevent uncertainty from deterring businesses and governments.
  • Collaboration between regulators, technologists, businesses, and stakeholders is necessary to create a regulatory framework that fosters innovation while protecting consumers and maintaining financial system integrity.
  • Compliance with data protection, financial, and industry-specific regulations is essential, especially for blockchain applications dealing with finance and sensitive data.
  • Regulations should be flexible to keep up with technological advancements, and a principles-based approach can provide the necessary flexibility.
  • Harmonising regulations globally is crucial for a borderless technology like blockchain to prevent regulatory arbitrage and create a level playing field.
  • A balanced and forward-thinking approach to regulation and compliance supports responsible growth and unlocks the vast potential of blockchain technology.

Blockchain and crypto-asset regulation is an important topic right now as authorities in the United States and European Union are discussing how best to protect investors from bad actors.

While this is a difficult process, it is ultimately necessary in helping to legitimise blockchain as the technology for the future. This is the view of Bryan Daugherty, Global Public Policy Director for BSV Blockchain Association, who was recently speaking in an interview with the Evening Standard.

‘As the public policy director of the BSV Blockchain, my perspective on regulation and compliance aligns with an understanding that it’s critical for the growth and development of the blockchain ecosystem,’ he said.

‘Firstly, it’s important to remember that blockchain technology, like any other, is not beyond the scope of regulation. Rather than regulating the technology itself, it’s the use cases and applications built on the technology that should be the focus of regulatory efforts.’

Daugherty added that clear and well-thought-out regulation can help drive the adoption of blockchain technology. Uncertainty around the regulatory landscape can deter businesses and governments from fully embracing the potential of blockchain, he said.

‘Therefore, it’s necessary for regulators to work closely with technologists, businesses, and other stakeholders to create a regulatory framework that fosters innovation while protecting consumers and maintaining the integrity of financial systems.’

Compliance is key for blockchain adoption and sustainability

Daughtery also highlighted the importance of compliance and how this fits into the idea of blockchain being a ‘borderless’ technology.

Thirdly, compliance is key. Blockchain applications, especially those dealing with finance and sensitive data, should be built with compliance in mind from the start. This includes compliance with data protection laws, financial regulations, and industry-specific regulations.

‘Moreover, regulations should be flexible enough to keep up with the rapid pace of technological advancement in the blockchain space. A principles-based approach, instead of a prescriptive one, could allow for this flexibility.’

Finally, as blockchain technology is inherently borderless, it’s crucial to work towards harmonising regulations globally, he said.

‘International cooperation can help prevent regulatory arbitrage and create a level playing field. A balanced and forward-thinking approach to regulation and compliance can support the responsible growth of blockchain technology, paving the way for it to deliver on its vast potential.’

Ryan Brothwell

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