PwC Blockchain Survey: Crypto’s Biggest Adoption Challenge Is Regulatory Certainty
Blockchain’s Biggest Challenge For Widespread Adoption Is The Lack Of Regulatory Certainty
When cryptocurrency was a smaller industry, it seemed insignificant enough that it wasn’t really on the financial radar. It required no regulations and thrived on the fact that no entity could rule it. However, as it has become more lucrative with bigger stakes, regulators all over the world feel the need to put down regulations that can help them manage the way that funds leave their country. The push has become even more important with the concept of blockchain technology.
As much as countries around the world want the ability to manage their local economy, the discussions are lasting quite a while. Many countries are at a standstill with these regulations, which is one of the biggest barriers in the ability to expand on blockchain technology and research. The issues with regulations are much of the reason that many executives are resisting the adaption of blockchain.
In fact, of 600 business executives surveyed in 15 different countries around the world by PricewaterhouseCoopers, it seems that nearly half of them rank this issue as one of their top three reasons they have not used it. Furthermore, about 45% says that they don’t trust the system. Around the same number of respondents said that it’s difficult enough to bring a network-based business, even with the advanced technology. A small 29% said that the ability to scale blockchain tech to their project was too difficult.
The strategic policy advisers’ leader, Alison Kutler, said that this isn’t surprising, considering blockchain’s goal to maintain its decentralized and anonymous ledger and how businesses want the opposite. She said, “This conflict is creating tension, especially in industries with mature regulatory constructs and high-value transactions. In addition, widespread adoption of blockchain across jurisdictions and participants requires standardization, which is often achieved from a central authority.” She also added, “However, technology mandates by policy makers can also harm innovation if overly prescriptive, presenting a delicate balancing act for the future of blockchain policy.”
So far, there has been work in Asia, Europe, and North America that have been finding activities that can be regulated with their jurisdictions, though it has mainly consisted of cryptocurrency and ICOs. However, each use case comes with a new set of regulations that have to be established.
In the PwC report, they even tell their clients that they should not expect to get any special treatment, regardless of how good the innovation is. The report says, “By and large, we expect existing regulation to extend to new business models and applications. If you remain agile, you’ll be able to adapt and remain compliant.”
Based on the new information, it is clear that the regulators are the ones with the biggest amount of control over where and when the groundwork can be laid out for blockchain development. Kutler said, “Regulators should be aware that they have the attention of industry leaders and innovators developing in this area, they should bring them to the table to collaborate on reasonable oversight.”
So far, the majority of the regulations for this type of technology have concerns the actual cryptocurrencies and exchanges. Blockchain technology itself has been much more positive in its reception. Explaining this difference, Kutler noted, “Policy makers in some jurisdictions seem more supportive of the innovative applications of blockchain and are creating regulatory environments that allow incubators to develop new applications. The results of these highly experimental environments for blockchain-based commerce will be critically influential for expanding policies to more geographic areas and industries.”