Global Policy Director at the BSV Blockchain Association, Bryan Daugherty, recently spoke to MarketScale about how the European Union’s regulatory sandbox is a critical first step in connecting regulators and innovators.
An important first step
Daugherty called the EU’s regulatory sandbox an ‘important first step,’ connecting regulators and innovators for an unrestricted, open discussion about regulation.
Highlighting an important point, Daugherty said that this conversation could uncover any legal or regulatory hurdles hindering blockchain technology adoption. Creating legal certainty will lead to an environment where innovative blockchain solutions can thrive.
On the other side, the sandbox will bring regulators updated advancements and how best to regulate them.
Daugherty said this would ultimately lead to a greater understanding that “blockchain, not cryptocurrency, will create long-term, transformational change in how we manage and monetize our data.”
What areas does Daugherty hope the sandbox considers? The model by which we measure the energy used by blockchains is at the forefront. For blockchain to reach its full transformative potential, it must scale to a global level. Daugherty hopes that the conversations that take place in the sandbox lead to a greater understanding of various consensus mechanisms, hopefully meaning we don’t trade security for a false sense of sustainability.
Wrapping up, Daugherty says that the United States has only begun to explore the potential of blockchain technology and would greatly benefit from a similar sandbox program. Doing so would place the USA in a much stronger position to lead and gain a competitive advantage.
Regulation is already well underway—learn more at the London Blockchain Conference
While the EU regulatory sandbox is an essential step in developing sensible regulations that foster innovation while stamping out the darker elements of the industry, the truth is that regulators are already moving to bring law and order to the industry across the globe. The pace of their actions has increased dramatically since the collapse of hedge funds like Three Arrows Capital and exchanges like FTX.
All across the world, we see regulators clarifying that anti-money laundering rules, Know Your Customer regulations, and securities laws apply to the blockchain industry. We’ve seen enforcement action pick up the pace, and some degree of fear ripple through the shadowy elements of the industry. Indeed, the EU itself has already toyed with banning anonymous transactions and is well on the way to testing how a digital euro might work.
Yet, enforcement of existing regulations likely won’t be enough. It’s important that new regulations specific to blockchain technology be passed, and that will require the sort of conversations that will take place in the EU regulatory sandbox.
You can learn more about blockchains, how they work, their use cases, how existing laws apply to them, and what common-sense regulations might look like at the London Blockchain Conference between May 31 and June 2. Register for free to secure either live or virtual tickets today!
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