As the rapid expansion of digital currencies and tokenisation continues, a deeper rapport with the regulators is required for crypto products and services to evolve and prove their utility to wider audiences.
The Fintech Connect conference brought together a panel of experts, for a discussion that analysed ‘What is the Future of Institutional blockchain?’, as the speakers took a magnified look at the current regulatory landscape for blockchain.
John Ho, Standard Chartered, Head Legal, Financial Markets, emphasised that he believes the state of play is ‘slowly moving forward’. Yet, Ho underlined the significance of the challenge facing regulators with regards to how rapidly the market is moving.
He pointed to the recent EU regulations which scarcely mention NFTs – a framework that will create the regulatory conditions for blockchain in each of the 27 member states of the union.
The regulatory evolution in terms of sandboxes also won the praise of Ho, as he backed the moves made by both the UK and the EU to provide an environment in which innovation can be fostered.
Joining Ho in empathising how challenging it can be to create a regulatory environment for blockchain, Graeme Moore, Polymath’s Head of Tokenisation, praised the embracing of innovation by the EU.
He compared it to the current challenges in the US market, where the lack of regulatory growth hinders innovation from thriving and creates hurdles for forward progress.
‘We will see the majority of innovation taking place in the EU because of this regulatory environment – they are winning the rat race’, stated Moore.
Moore also mapped out the significant challenge that comes with regulating DeFi, underlining his belief that he has no idea how governance of the landscape will play out.
‘Thus far, we haven’t seen too many major crackdowns on DeFi, we have infrastructure that can’t be taken down, which creates an interesting situation for the state of defi and regulation.’
Cambridge Business School’s Keith Bear followed this up by highlighting that in spite of the regulation of tech presenting a challenge when it comes to DeFi, individuals at the heart of the offering may well leave themselves exposed.
He did, however, present an optimistic picture for the future of blockchain regulation, as he predicted it is here to stay and with it, regulatory clarity will come to fruition.
Nestlé’s Senior Global Digital Innovation Manager, Alberto Cozer, took a more skeptical mindset to increased regulation as he detailed that when it comes to blockchain we are witnessing ‘innovation on a scale that has never been seen before, and regulation trying to set boundaries does innovation a disservice’.
‘Innovation is about trial and error, something that regulation doesn’t compliment,’ he concluded, cementing the notion that regulators need to take a more receptive approach to innovation in blockchain.