Blockchain Leaders Point Out the Shortcomings of Sandboxes, Seek Legal Clarity and Change Rules
The uncertainty of legal frameworks coupled with archaic mindsets are the main reasons behind the slow development of the cryptocurrency and blockchain technology sector. Surprisingly, this is the case even in countries that are supposedly friendly to the crypto space. These are the conclusions drawn from the ongoing Concordia Summit in New York. On Monday, the event delegated some time for discussions on blockchain technology.
For instance, sandboxes are usually useful to regulators and startups because they provide a designated period for testing new practices before they are implemented. Nonetheless, some industry leaders still perceive them as burdensome. In this regard, Sam Cassatt, the principal strategy officer of ConsenSys, stated that while sandboxes are useful in their own means, they limit innovation due to the long periods they typically take.
Although Singapore is among the most crypto-friendly nations globally, it became apparent at the Concordia Summit that the same openness is not applied by licensed banking institutions in the country. Concerning this, Michael Moro, the CEO of Genesis Trading, lauded the development of the crypto space in Singapore but criticized the local banks. Michael added that his company cannot open an account in a Singaporean bank because they deal with digital currencies. Moro also mentioned that startups in America are challenged by the huge compliance fees (up to $3 million) required by oversight authorities such as the SEC and FINRA.
The Need for a Change of Rules
On the other hand, Eva Kaili, a representative of Greece in the European Parliament, captured the attention of many by proposing the enactment of a more flexible legal framework. Precisely, Eva called for the adoption of lighter approach regarding cryptocurrency regulations, in such a way that would not impede the development of the sector. Kaili also noted that numerous regulations are the reason behind the sluggishness of blockchain innovations.
Additionally, Kaili pointed out the inadequacies that are marring the European financial system, especially large and cumulative transaction fees. Next week, the EU is expected to adopt a resolution concerning blockchain technology that was approved of the by European legislation in May. Besides being the basis of the European legal framework on cryptos, the resolution proposes the allocation of £340 million towards pilot public blockchain projects over the next two years.
Moreover, Kaili likened the current uncertainty to the time that European regulators were discussing sharing economy businesses such as Airbnb and Uber. A section of the members prosed the imposition of bans because the startups were not legally complaint. However, such a harsh stance would discourage future technological innovations. Others labelled it a fraud. According to Eva, if the startups were not fraudulent and legally non-complaint, it was the rules that needed adjustment. Essentially, Eva believes that the regulatory framework must be made in a way that is favorable to the development of blockchain technology.
Blythe Masters, the founder of Digital Asset, believes that blockchain technology can prove useful even to regulatory authorities. To this end, Blythe mentioned that blockchain technology enables regulators to have a full view of the entire crypt market without having to issues subpoenas.