European government and industry leaders have urged jurisdictions around the world to manage the pace of emerging regulation around blockchain technology.
“What we all want to avoid is for a country to declare cryptocurrencies as a security just out of the blue,” said Willem-Jan Bruin, Director of Western Europe of BitFury Group on a panel at London Blockchain Week 2018.
BitFury is one of the largest Bitcoin miners outside of China and provides software and hardware solutions for governments, businesses, organizations and individuals to move assets across the blockchain.
Bruin instead calls for more of a steady dialogue between commercial industry and government leaders to better educate regulators about the technology.
Joining Bruin on the panel were European Union Parliamentarian, Antanas Guoga of Lithuania and Ashley Fox of the South West of England and Gibraltar, who also spoke against regulating the technology now.
Observe and monitor, not regulate
“I’m a proponent of the sandbox environment, no regulation, [just] observe and monitor [developments] because any regulation would make it hard”, said Guoga, popularly known as Tony G.
The best way to facilitate the growth of the blockchain technology adoption into jurisdictions is to “let people in an with open arms, give leeway, allow them to develop, not interfere and [just] advise,” he said.
A good example of this was the move by Luxembourg’s regulators to grant Japan-based bitcoin exchange operator bitFlyer with a licence to enable them to convert fiat currency to cryptocurrency in the EU.
The payment institution license was granted by Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF), and the Luxembourg House of Financial Technology Foundation (LHoFT) this month (January 2018).
“The momentum in Europe is different to China. It’s an open environment” said Guoga.
This momentum is signaled in Gibraltar’s move to launch the world’s first bespoke license for fintech firms using blockchain distributed ledger technology at the end of 2017.
Fox who represents Gibraltar in the EU, shared a more practical point of why he does not want to see the EU putting out a vast number of regulations surrounding blockchain technology.
“It’s just impossible for politicians to draft a law that is going to deal with every eventuality in the future,” he said.
Future in the hands of the community
At this current stage blockchain focused companies are left to navigate the existing regulation when trying to develop their projects.
“I think it would be helpful if the government and regulators at least give direction”, said Bruin, seeking opinions and predictions from where the regulators want to go to avoid surprises.
The main challenge for blockchain startups in this phase is to manage the over hype and risks associated with blockchain and cryptocurrencies, said Guoga.
“All the government action will happen when there is pain and there is blood on the floor and the action can be extreme,” he said.
Fox sees Gibraltar approaching blockchain applications as they have with providing other types of companies with giving out licenses.
“If you get a Gibraltar licence, that’s a sign that you are a serious player, but if you don’t behave yourself that license will be taken away. That will then be an example to the world and you probably won’t do much business again,” said Fox.
Fox also recommends blockchain startups to have codes of conducts, statement of principles and most importantly operate with “integrity and honesty” — if they do this, they will keep their license.
Disclosure: Cryptonews.com is backed by Antanas Guoga.