Leather old map new? Blockchain needs new regulation

nRunaway Comment: Eva A. Kaili, a member of the European Parliament, is primarily responsible for the Science and Technology Selection Assessment (STOA) team, which evaluates AI, financial technology and blockchain technology. In this paper, Eva A. Kaili from the regulator’s point of view of the European outlook for the future development of blockchain technology, and that regulators treat new technologies must be generous, but can not be ignored, the only way to see the technology and market and The real impact of the entire society.n
nTranslation: Clovern
The Internet has come to a transition again.n
The “cloud era,” which so far served both consumers and businesses, is being replaced by a “decentralized era,” or rather, that computer end-users not only own and manage in a decentralized way Software, and will have an era of data ownership and management in a decentralized manner.n
DLT is the technology to make this happen.n
This technology has come out of the initial stage of development, but it has not yet matured. It has been in a period of “adolescent” developing rapidly and has shown great potential for development and aroused great expectations from people. However, just as all things at this time will go through, in order to realize its potential, a disciplined framework, some confidence ascension, a certain sense of certainty, and the wisest direction of realization are necessary if necessary.n
Technically speaking, this role needs to be played by fans who embrace the technology and who resist technology. The opposition to technology is not bad or negative. Historical experience tells us that with the passage of time, this resistance will undoubtedly become an essential element in promoting technological development and practicality.n
In the case of DLT, we did see the enthusiasm for this technology, but we also saw resistance from existing and traditional players and business models.n
We can see the potential of this technology in every area, whether the user is a consumer or a citizen. I will not go into detail about the advantages of DLT here. The market has revealed many advantages, of course, there will be more advantages in the future surfaced.n
In addition, there is no need to stress the disruptive effects of “disintermediation.” Emerging business models will democratize the value chain, eliminate transaction costs, optimize the allocation of resources and risk, increase social inclusion and improve the quality of services and products we receive as customers and citizens.n
As the enthusiasm and conviction of “blockchain preachers” continues to infect us, and despite the tireless efforts of entrepreneurs around the world to produce brilliant white papers and radical radical propositions, more and more government agencies Need to meet new challenges, sometimes very reluctantly, sometimes even courageous.n
A fair competitive environmentn
So far, the attitude of the EU has been very positive.n
I am honored to be a reporter on the resolution of the first blockchain in the European Parliament. My task is basically to propose a framework of rules that can serve as a basis for EU regulation.n
Changing from a believer’s role to a supervisor is indeed challenging. Because suddenly my job is no longer to communicate the benefits of the blockchain to others, it is also challenging to create a path to destination as soon as possible to minimize friction and detours.n
The first requirement is to create a level playing field for DLT companies and consumers to ensure legal and institutional certainty.n
Without certainty, we can not get the scalability necessary for the development of this technology. Moreover, at the EU level, the institutional and legal certainty must be harmonized.n
Otherwise, fragmented regulation creates a lot of friction and stifles small-scale companies. This is why we need to create a policy of blockchain products and services that is accessible and somewhat standardized, flexible and powerful across the EU.n
solid foundation n
To me, the blockchain is not only an impeccable technique. More is an infrastructure, a kind of capacity building. Therefore, standardization is not only a tool for conducting cross-border business activities, but also a prerequisite for achieving interoperability of infrastructure.n
Thousands of platforms are now emerging and no one knows exactly how many DLT alternatives and business models are there. The question is: How do these similar DLT ecosystems work together?n
In my role as a regulator, linking scalability and interoperability will be of strategic importance.n
Standardization can be as simple as it can be complicated. My attitude towards this issue is balanced. Since we can not monitor a technology as such, the degree of standardization should be proportional to the principle of innovation. This means we can not monitor a technology that’s still under development. First, let innovation bring results.n
A corollary of this is that regulation must be neutral to technology. For example, cryptocurrency should be considered a payment instrument, not a trading instrument.n
The third rule of thumb is that regulators must be neutral about business models. For example, a bank’s KYC requirement can not be lower than a non-bank company’s requirement in terms of payment.n
Can not be generalizedn
When it comes to standardization, we have to figure out what we are going to standardize.n
So, based on use cases that have reached a level of trustworthiness and maturity, I think defining criteria for identity, smart contracts, data protection, and cybersecurity are very useful to businesses and consumers alike.n
Obviously, the above regulatory principles and methods have deviated from the preferences of regulators and introduced a very influential framework. To really make an impact, you need to get deeper into this method, not just the surface. We need smart regulation, but smart regulation does not necessarily have to put together new ideas in the old regulatory framework.n
New challenges require new definitions, new categories, and some level of creativity. Therefore, smart regulation is the regulation in line with our goals.n
To take this argument into account about the ICO’s discussion. There is a debate among them about what the ICO is really trying to do – whether it belongs to securities or commodities? Immature US regulators define it as securities.n
In Europe, we think this old regulatory framework does not fit the reality we are facing now. Why ICO must be defined as securities or commodities? ICO is the ICO, and we need a viable regulation that will both help companies expand their crowdfunding activities and satisfy investors.n
Regulators need to be generous with new technologies, such as creating regulatory sandboxes, which is my attitude towards the DLT.n
In the early stages of technology, regulatory tolerance is crucial because it enables rapid transformation of emerging business models from “proof-of-concept” thinking to “delivering quantitative and qualitative results.”n
Only in this way can we see the actual impact of technology on the market and society as a whole.n
Develop methodsn
All in all, the EU institutions have taken a positive attitude, but this must be a multi-faceted approach.n
Different sectors of the European Commission have different concerns. Some committees focus on the DLT’s infrastructure level, while others are concerned with financial and market structures, while others are more concerned with the social impact of employment and democratic quality.n
In the European Parliament, I will try my best to eliminate the division and provide the EU with a “global perspective” on the issue.n
Blockchain is a highly politicized theme. It has nothing to do with the economy, nor with speculators making money, but with the concept of reshaping trust at a time when our society needs more trust than ever before to maintain and improve social harmony.n
Blockchain is undoubtedly a system of change in which no citizen or politician can remain indifferent and remain neutral.n
Blockchain needs our care. This is an emerging trust mechanism that can not be ignored. It can make the world a better place.n

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