There is no doubt that blockchain technology as well as virtual assets are crucial in enhancing financial inclusion and fostering economic growth around the world. However, for this to happen, proper and precise regulatory frameworks must be implemented.
During the Ripple’s 2019 UBRI Connect the company’s global head in charge of government relations teamed up with Kristin Smith, Blockchain Association director, to talk about the current legislative developments that will shape the digital assets industry going forward.
The two agreed the announcement by Facebook that it was set to enter the crypto industry with its Libra project, led to a widespread global discussion on how the industry should be regulated. Today, most of the major economies in the world are talking about the Libra project. In the US various Senate and House committees are currently evaluating the potential financial impact of digital currencies in the financial market.
Smith indicated that this was a normal occurrence as a new transformative technology is invented, it always takes time before the regulators can figure out how to regulate it. Smith argued that it is prudent for regulators and policymakers to discuss the technology in order for them to come up with the right conditions.
Smith stated that the role of the Blockchain Association and its members is to advance a unified voice of the entire industry. She added that educating and working closely with policymakers to enhance trust and transparency was also crucial.
Smith gave an example of several countries that have established guidelines to support innovations in the industry while at the same time addressing the risks. She gave an example of the UK which recently updated its crypto assets guidelines where she noted that XRP is currently not taken as security. She urged other jurisdictions to borrow such countries while developing their own guidelines.
Although Smith lauded discussions with policymakers, she explained there is still a lot of work to be undertaken globally. Lack of clear regulatory policies in countries such as the US may inhibit innovation, tax revenues as well as jobs created by new technologies.