“The blockchain industry is in conflict with regulators, and it’s not going well for either side, and they’re making a complete mess of things,” says Ian Grigg.
In an interview with CoinGeek Backstage, Grigg discussed the global blockchain regulatory mess and how it can be easily fixed.
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Grigg is the founder of HoverTrusts, the world’s first trust management platform for secure digital asset trading. The renowned financial cryptographer and pioneer of triple-entry bookkeeping is also the founder of the Peer For Peer Foundation. At the London Blockchain Conference 2024, he joined a panel that explored the tokenization of real-world assets (RWAs) and the regulations surrounding them.
In an interview with CoinGeek Backstage’s Becky Liggero, Grigg reiterated that regulators have all the tools they need to oversee blockchain.
“The first tool is the contract,” he explains. These contracts require blockchain companies to document their processes and stick to them. Once the contracts are in place, authorities can work to enforce them and, in doing so, create harmony in a chaotic industry.
“Once contracts are in place, the entire industry will move to a higher level of professionalism, integrity and accountability. Without contracts, there is no control.”
The second tool is trust. Digital asset holders can place their assets in the trust, and the trustee is responsible for protecting them.
“If they are organized around trusts, they will have a greater fiduciary duty to act in the interests of their beneficiaries. This would place the stock exchanges at a higher level of regulation. There is no need to put in place new regulations or to copy banking laws.”
While the solution is simple, authorities around the world are still struggling with blockchain regulation. Most countries don’t have formal policies, and the few that do tend to focus on specific aspects such as exchanges or stablecoins. The closest we have to a comprehensive regional framework is the European Union’s Market for Crypto Assets (MiCA), although it excludes decentralized finance (DeFi) and imposes a high and costly regulatory burden on smaller businesses.
The main challenge, Grigg says, is that regulators continue to rely on players whose vested interests are at odds with the overall retail good, such as exchanges or token issuers. They also rely on banks, which are motivated to stifle blockchain and digital assets because they are direct competition.
Video: Digital Currency Regulation and the Role of the BSV Blockchain
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