Digital currency and blockchain regulations have been taking center stage in recent months as more regulators seek to bring the rapidly growing industry under their purview. On the sidelines of CoinGeek Zurich, Bitcoin Association’s legal counsel Marcin Zarakowski discusses how the changing regulatory environment affects digital currencies and how Bitcoin Association is positioning itself to thrive under increasing regulatory scrutiny.
Zarakowski, who also serves as Association’s public policy manager, joined Patrick Thompson for CoinGeek Backstage. After recently joining Bitcoin Association, Zarakowski handles not only the corporate regulatory aspects, but also regulatory concerns and relations with legislators and watchdogs around the world.
Zarakowski said that currently, the biggest focus for regulators is curbing money laundering and financing of terrorism via digital currencies. The Financial Action Task Force (FATF) has been working on this for a while, with one of its biggest goals being to ensure that everyone who sends or receives substantial digital currencies reveal and verify their identities.
Data protection on the blockchain is also critical for regulators, especially in Europe where the general data protection regulation (GDPR) has been implemented.
“What we expect this year, in Q3-Q4, is to have a regulatory body called the European Data Protection Board, finally issue guidelines to make it more clear ‘how can you process personal data on the blockchain?’” he said.
Blockchain regulation efforts have varied globally. There are jurisdictions which have focused on new blockchain-specific legislations while others have expanded the scope of existing regulations.
According to Zarakowski, there is no wrong approach. What’s most important is to not overregulate the industry as that may stifle innovation.
In Switzerland, where Bitcoin Association is based, regulators first engaged with the industry to find out its views. It then expanded the scope of existing regulations to accommodate blockchain technology.
“What Swiss people believe is that regulations will always follow technology. It’s never going to be the other way round,” he observed.
Moving forward, Zarakowski hopes that regulators will offer more clarity for blockchain users. One area in particular that he believes needs clarity the most is regarding personal data.
“This is one of the biggest hurdles that blockchain projects are facing – how to process personal data in a compliant way… and this is stopping the whole industry, and also BSV projects from evolving and developing.”
While CoinGeek Zurich had several panels delving into almost every other facet of the blockchain industry, the University of Warsaw alumnus hopes to see more panelists talk about blockchain regulation in upcoming CoinGeek Conferences.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.