Blockchain and Payments Infrastructure: A Regulator’s Dilemma?

By June 19, 2016Bitcoin Business

Gabrielle Patrick is a UK and US lawyer specializing in cryptofinance and distributed ledger technology. She is the co-founder and general counsel of Epiphyte, a startup enabling instant settlement of trades and transactions using distributed ledgers .

In this feature, Patrick discusses the balancing act regulators face in such a fast-changing technological environment, and describes the issues raised at a European Central Bank (ECB) meeting on the subject this week. Today, regulators face the challenge of delicately balancing innovation enablement and avoiding premature and overly burdensome regulation. On the one hand, they are expected to ensure market stability and ensure public trust and confidence, yet on the other they are being asked to spur innovation.

This all comes at a time when technology is advancing much faster than laws can adapt and when the bitcoin blockchain network offers a fundamental shift in how we transact value instantaneously and how money supply management can be improved.

The opportunity for regulators seems clear: an ability to regulate with enhanced transparency, with access to the best data in real time with regulatory features built into the infrastructure itself (eg: monitoring transaction flow end to end in real time with built-in settlement and compliance functionality).

So why aren’t regulators jumping at this opportunity? Regulators’ questions

Epiphyte was invited to address 25 central banks at the ECB this week to discuss the FinTech impact on payment and settlement systems, and the regulation of digital innovations. The discussion was dominated by the impact of the bitcoin blockchain network.

Some of the topics raised were: the pros and cons of closed loop vs permissioned and open distributed ledgers

cross-border flows and how to avoid systemic risk if adoption of bitcoin significantly increases global blockchain standards and ensuring that all proprietary systems are built with interoperability the scalability of the […]

Leave a Reply

All Today's Crypto News In One Place