Following the EU’s decision to abstain from regulating blockchain for now, cryptocurrency market operators speak out.
Although the lack of regulation in a particular industry could be interpreted as something positive at times, this doesn’t apply to situations in which governmental bodies choose to table a discussion on the matter for a later date. It makes markets unpredictable.
After the EU decided to leave discussions of blockchain regulation for another time, the cryptocurrency community reacted with mixed opinions. Nick Cowan, CEO of the Gibraltar Blockchain Exchange, believes that this may have adverse effects on the blockchain industry.
“A lack of EU-wide crypto regulation is a deterrent to blockchain innovation and will continue to hinder adoption of the technology by mainstream financial service providers going forward,” he said in an email sent to Cryptovest.
On the other hand, he also pointed out that “certain smaller jurisdictions in the EU” are one-upping the inter-governmental organization by passing their own regulatory frameworks that address blockchain companies. These laws establish the groundwork for how operators should conduct their business and provide best practices that allow for a degree of clarity.
“Officials in these jurisdictions are also reaching out to key financial services stakeholders to educate them on the tremendous potential of decentralized technology and to gain their support for blockchain businesses. But this is only the beginning. While it is encouraging to see the proactive work of smaller jurisdictions, the EU needs uniform regulation to foster a sustainable future for the industry. Sensible legislation that has the backing of blockchain adopters and EU regulators alike will balance the need for further innovation with appropriate consumer protection,” Cowan added.
“Not so fast!” says Lisk
Tempting as it is to rush the EU to establish regulations, there’s another side to the story. Michael Borowiec, communications lead at Lisk, believes that a more measured approach could help develop more comprehensive set of rules that would have fewer negative consequences for the blockchain industry both inside and outside Europe.
“The EU has been prudent in taking a slow, methodical approach to blockchain regulation, conducting thorough research on the subject before enacting specific measures. The regulation of blockchain technology should be considered at an inter-governmental level, but this will take time. Due to the power and far-reaching influence of the EU, the legislation written today will have consequences well beyond the region. As such, it is important that legislators carefully consider all angles before committing to a particular approach,” he said.
There’s also the added benefit of allowing industries in various countries to take shape, giving the European Commission a proper guide with which it can draft proposals to send to the European Parliament.
By submitting legislation based on principles that have been thoroughly tested, the EU’s governing bodies minimize the chances of friction between the Parliament and the European Council composed of representatives from each member state.
In the end, abstaining from regulation for the time being could give each of these institutions time to look at what works in each country and consolidate everything into law. Whether this would be beneficial or detrimental to European blockchain companies remains to be seen.
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