A senior executive at one of the world’s largest international financial services company has spoken out and said that market authorities should take an interest in the blockchain and not rush to regulate it.
In a report from the Financial News, Justin Chapman, head of market advocacy and innovation research at Northern Trust, said at a recent briefing:
A database has never been regulated, and we need to be really careful [about doing that].
Chapman added that this push for blockchain regulation could prove a ‘potential danger’ and that market authorities should take an interest in how the technology changes financial firms for business only.
There have been persistent calls for regulating the blockchain within many quarters.
The European Commission has said that it is actively monitoring blockchain and DLT developments, claiming that its potential use cases make it both ‘very promising and challenging.’ It’s expected that further support for the technology is likely to increase over the coming months.
In January, the Bank of England’s governor Mark Carney said that fintech is democratizing financial services. However, while it’s creating new benefits for businesses and consumers, so too is it posing new risks.
In a speech at the Deutsche Bundesbank G20 conference on ‘Digitizing finance, financial inclusion and financial literacy,’ Carney stated that government regulators will need to maintain a strong focus on the regulatory perimeter when these risks emerge.
Yet by doing so, Carney added that through new technologies such as the blockchain, governments can help produce a new financial system for a new age.
Even though countries such as China are calling for the legal regulation of blockchain technology to push the country’s fintech lead, the European Securities and Markets Authority (ESMA) released a report last month stating that regulatory action for the distributed ledger at this ‘early stage’ is premature.
And yet, the fact that the European Parliament’s Committee on Economic and Monetary Affairs (ECON) proposed a task force last year looking into DLT and virtual currencies, it demonstrates that they are keen to see what challenges and opportunities the technology has.
For now, though, it appears that further research is needed for the development of the technology. At it continually proves to be an exciting area for many individuals and firms, producing something with it that has added value to existing services is what people are keen to achieve.
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