BLOCKCHAIN GOVERNMENT REGULATION
Blockchain Technologies has disrupted the industry, and is known to be the mechanism behind cryptocurrencies. It has the potential to decentralise the way financial transactions are carried out. Regulatory agencies have yet to adapt to what new technologies are offering and grant what is necessary to keep up with new demands of the market. Blockchain has the potential to create new technological ecosystem, not only in finance but many other industries also.
Data protection is a matter of high importance when it comes to Technologies. For instance, the implications it has once new regulations are implemented. The EU has recently amended its regulations related to online privacy, and the right to be ¨cleared¨ from the web. Such changes can have major impacts on Blockchain Technologies, especially due to the uncertainties it is currently undergoing.
For many blockchain companies, this right may contradict the immutability and decentralization that the technology provides its users. The new GDPR standards rest upon the moral foundation that EU citizens should have the fundamental right to control their data. The onus, therefore, will fall on blockchain companies to ensure that the EU threshold for data ownership is met sufficiently.
In Asia, governments have allowed businesses to operate without restrictions, and experiment Business models with the use of Blockchain technologies. Regulation was not a priority until the high exposure of cryptocurrencies, its demands, and potential risks. Since then, they have shown significant change to the approach of regulating Blockchain.
In 2017 the People’s Bank of China banned initial coin offerings (ICOs). South Korea also followed this choice of banning ICO. Although these countries banned cryptocurrencies related activities, they encourage Blockchain Technologies, which is not limited to crypto. Japan is one of the first countries to recognise Bitcoin as a currency, and has granted businesses with exchange licenses to legally run their operations. However, Bitcoin is the only cryptocurrency that has been approved for the moment.
In the contrary, the US has a different approach towards Blockchain. Regulations are the priority, which has often restricted the advancements of businesses applying Blockchain technologies, but mainly crypto related.
BLOCKCHAIN REGULATION STANDARDS
A unified regulatory framework for blockchain and cryptocurrency is crucial for such technologies to advance and reach their full potential. The lack of regulations does not provide guidance to the ones seeking legal paths towards innovative business plans.
With the progression of regulations for Blockchain and decentralization of traditional exchange methods, costs and security concerns will shift towards efficiency and innovation.
Regulations that implicates changes in the financial and legal sectors are expected to adapt to the advancements in technology. Unfortunately, such changes are not known for its flexibility and speed.