Advocates of disruptive technology have repeatedly argued that organization and innovation have enormous potential for mutually beneficial existence. The subtle, hostile relationship between innovators and regulators is often central to the functioning of the global economy, especially during the difficult times we face today.
The fuel that keeps the fire going for the important relationship between regulators and companies, like everyone else, is communication and collaboration. This is critical when it comes to the innovators behind distributed ledger technology and the organizers who keep track of the space.
DLT ideas first appeared in the early 1990s, but it wasn’t until 2009 that the first block of what we now know as blockchain was mined. In 11 short years, blockchain and DLT in general have caught the attention of the financial community and the general public. This year alone, Deloitte’s 2020 global blockchain study found that business leaders now view blockchain as “an integral part of organizational innovation,” while research firm Gartner predicts that blockchain technology will add $ 3 billion to businesses around the world. … … Peace by 2030.
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The need for an organization
As the blockchain industry gains momentum, I think that without regulation it won’t work; In fact, he needs him to survive and actually thrive. Regulators have a responsibility to strike a balance and enable companies in the industry to continue to operate ahead of innovation in a smart and safe way. Finding this balance and the future success of decentralized finance are closely related. This will require an industry-wide approach in which all stakeholders maintain communication and work with regulators to ensure the consistency required by the industry.
However, the burden of finding that balance falls not only on the industry itself, but also on the shoulders of regulators and decision makers. The standards are common across all industries and this standard is no different if it wants to thrive and thrive on Major Finance Street.
Over-regulation, meanwhile, could stifle cryptocurrency markets based on distributed ledger technology. Of course, an equilibrium point can be found that will allow this technology to reach its full potential within the rules that govern traditional markets.
Many governments work closely with major players in this area. In January 2018, Gibraltar became one of the first jurisdictions to introduce a regulatory framework for DLT service providers. Since then, the Gibraltar Financial Services Commission has issued several licenses to global industry leaders, with a number of active applications pending. This balanced organizational response was only possible through open communication between regulators and innovators.
In Switzerland, a surprisingly progressive attitude towards cryptocurrencies and distributed ledger technologies pushed the country ahead of all others and brought it closer to the goal of becoming the first “krypton”.
In short, no less than 45 central banks around the world have announced their efforts to develop central bank digital currencies using DLT. This suggests that these technologies are in demand not only among business leaders, but also among legislators.
There is no doubt that regulators will follow suit and work with the private sector to achieve the desired balance, but much more needs to be done in terms of communication and cooperation to achieve this.
The creation of working groups between DLT companies and regulators, as well as government agencies and observers, should become commonplace.
The DLT would not be able to reach its full potential if it was still an expression of distrust among the general public. Through open dialogue, we can work together to ensure that the market is regulated and trusted, that regulators trust the technology, and that those involved in the creation and use of technology can enjoy the tremendous benefits it brings.