“The blockchain industry is headbutting with the regulators, and it’s not going well for either side, and they’re making a complete hash of it,” says Ian Grigg.
In an interview with CoinGeek Backstage, Grigg discussed the global mess in blockchain regulations and how it can be easily resolved.
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Grigg is the founder of HoverTrusts, the world’s first trust management platform for secure digital asset trading. The renowned financial cryptographer and triple-entry accounting pioneer is also the founder of the Peer For Peer Foundation. At the London Blockchain Conference 2024, he joined a panel that delved into tokenizing real-world assets (RWAs) and the regulations around them.
In an interview with CoinGeek Backstage’s Becky Liggero, Grigg reiterated that regulators have all the tools they need to oversee blockchain.
“The first tool is contracts,” he says. These contracts force the blockchain firms to document their processes and stick to them. Once they have contracts in place, the authorities can work on enforcing them and, in doing so, create harmony in a chaotic industry.
“Once you’ve got contracts in place, the whole space would evolve to a higher level of professionalism, integrity and responsibility. Without contracts, there’s no control.”
The second tool is trust. Digital asset holders can place their assets in the trust, and the trustee is charged with protecting them.
“If they organize themselves around trusts, they would have a higher fiduciary duty to do the right thing by their beneficiaries. This would lift exchanges to a higher level of regulation. You don’t need new regulations or to copy banking laws.”
While the solution is so straightforward, authorities globally are still grappling with blockchain regulations. Most countries have no formal policies and the few that do tend to focus on specific aspects such as exchanges or stablecoins. The closest we’ve come to an all-around regional framework is the European Union’s Markets in Crypto Assets (MiCA), although it excludes decentralized finance (DeFi) and places a high and costly regulatory burden on smaller companies.
According to Grigg, the main challenge is that regulators continue to rely on parties whose self-interests are at odds with the overall retail good, such as exchanges or token issuers. They also tap the banks, which are motivated to stifle blockchain and digital assets as they are direct competition.
Watch: Digital currency regulation and the role of BSV blockchain
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Source: https://coingeek.com/ian-grigg-talks-solving-blockchain-regulation-hurdles-video/