“We urgently require regulation to financial services, but technology should not be regulated,” said Circle’s Director, Legal and Business Affairs, EMEA, Claire Wells during a discussion panel entitled Blockchain & Financial Services: How Does Blockchain Fit Within the Regulatory Environment?
She made a couple of predictions: “In the short-term, in about 18 months, we’ll see enacting of anti-money rules. In the long-term, in about five years, there will be in place an interoperable regulating framework.”
Coinfloor CMO Teana Baker-Taylor noted that regulators in the UK and Gibraltar are currently consulting with tech experts to understand the crypto space before drafting regulation. “I know that in many circles, regulation and crypto don’t go together, but for any market to gain volume, institutional investors need to be involved, and they’re currently cautious due to a lack of regulation – they need a stable framework to manage counterparty risk and risk to consumers,” she said.
“We’re currently talking about these assets with different vernaculars, so we’re going to need common taxonomy and interoperable frameworks to move forward,” she continued.
Consensys FinTech & RegTech Lead, Juan Llanos, agreed and added that he saw significant challenges in regulating peer-to-peer transactions. “The question is, which one do we defend, peer-to-peer or bureaucracy? I can say that a new society needs to emerge.”
He mentioned a case where a 12-year old was trading Bitcoin on his phone and suggested this cannot continue to happen. “I also encourage government regulators to hire engineers instead of just lawyers, so that they understand technology before they regulate anything,” Llanos commented.
Another challenge both regulators and entrepreneurs will face is that some crypto coins have two sides to them. “They’re both consumptive because they grant access to a technology service, for instance, and simultaneously provide an investment opportunity for purchasers,” he concluded.