{"id":250648,"date":"2021-05-15T18:22:00","date_gmt":"2021-05-15T15:22:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/blockchain-will-thrive-once-innovators-and-regulators-work-together\/"},"modified":"2021-05-15T18:22:00","modified_gmt":"2021-05-15T15:22:00","slug":"blockchain-will-thrive-once-innovators-and-regulators-work-together","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/blockchain-will-thrive-once-innovators-and-regulators-work-together\/","title":{"rendered":"# Blockchain will thrive once innovators and regulators work together"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a261ef9830e9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a261ef9830e9\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/blockchain-will-thrive-once-innovators-and-regulators-work-together\/#Innovations_empower_regulators\" >Innovations empower regulators<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/blockchain-will-thrive-once-innovators-and-regulators-work-together\/#Dialogue_is_the_answer\" >Dialogue is the answer<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Blockchain will thrive once innovators and regulators work together  <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDUvZGJkMTczYjYtYzcxNi00MjhkLWEyMmItNGMxNTA0NmQ2ZGU2LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>There is often a perceived tension between regulation and innovation. A pervasive narrative has emerged that these two important parts of our society are at odds with each other. In reality, it\u2019s when these two come together as partners that we can effect change and transform our world for the better.<\/p>\n<p>Nowhere is this more true than in the blockchain industry. <\/p>\n<p>Over the last few months, we\u2019ve seen seemingly reactionary regulators in different parts of the world try to formulate new rules and guidance in silos, without sufficient input from the key stakeholders most knowledgeable about the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> \u2014 the innovators themselves.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Stablecoins present new dilemmas for regulators as mass adoption looms<\/em><\/strong><\/p>\n<p>We saw this in the United States at the end of 2020 when the Financial Crimes Enforcement Network (FinCEN) pushed out a rule proposal that would significantly impact the digital currency landscape. Initially, they only allowed a two-week comment period over the end-of-year holidays. Ultimately, after an outpouring of feedback from stakeholders, FinCEN <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.federalregister.gov\/documents\/2021\/01\/28\/2021-01918\/requirements-for-certain-transactions-involving-convertible-virtual-currency-or-digital-assets\">expanded<\/a> that period. By all accounts, it is now engaging in a meaningful dialogue with the industry before moving forward with any further rulemaking. However, since then, draft guidance from the Financial Action Task Force has taken FinCEN\u2019s place, looking to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.fatf-gafi.org\/publications\/fatfrecommendations\/documents\/public-consultation-guidance-vasp.html\">enforce<\/a> the \u201cold way\u201d without seeking input from the private sector.<\/p>\n<p>We saw this again in February when the Central Bank of Nigeria (CBN) issued a circular that sowed confusion about how they viewed digital currencies. It paused the operations of many promising financial technology businesses leveraging blockchain that were unsure how to proceed. However, after stakeholders inside and outside the industry \u2014 including other regulatory bodies in Nigeria \u2014 voiced concerns, CBN is now set to collaborate with the blockchain industry. They will conduct research to find ways to develop regulations that balance concerns they and others may have, while still allowing the value of blockchain to benefit the region.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>More harm than good? Nigerian crypto users in disbelief over CBN ban<\/em><\/strong><\/p>\n<p>Most recently, Turkey announced stricter rules on cryptocurrency in April, only to quickly clarify a softer <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roach after strong reactions from the industry and the country\u2019s growing user base.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Crypto payments banned in Turkey \u2014 Is this just the beginning?<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Innovations_empower_regulators\"><\/span>Innovations empower regulators<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>At first blush, innovators and regulators may seem like strange bedfellows. Regulatory bodies have a tremendous duty to protect consumers and deter financial crimes, all while supporting \u2014 not squelching \u2014 economic opportunity and financial inclusion. Perhaps contrary to popular belief, these are values that innovators in blockchain share with regulators. <\/p>\n<p>The genesis of this technology in many countries, and for many entrepreneurs and innovators, is to provide consumers with greater levels of access and protection. Blockchain can further these goals by offering low-cost, efficient payment capabilities and empowering regulators with greater consumer protection tools.<\/p>\n<p>First, an immutable, public ledger becomes a new tool for transparency and accountability to deter and catch financial criminals. For example, forensic analysis firms like Elliptic have built tools that can identify patterns indicative of illicit activity based on publicly available ledger information. Unlike the traditional banking system, a public ledger allows investigators to see the movement of funds and identify suspicious activity before \u2014 or as a method of \u2014 identifying criminal activity.<\/p>\n<p>Second, blockchain networks can have compliance functionality built in at the protocol level. For instance, on the Stellar network \u2014 an open-source, public blockchain \u2014 digital asset issuers can control who owns their assets. Recognizing a need for the ability to recall value from a past transaction when fraud, theft or regulatory action occurs \u2014 similar to what\u2019s called a \u201cclawback\u201d in traditional finance \u2014 developers for the Stellar network are working on features to enable this functionality. This work underscores that it is possible to leverage the power of decentralization while also providing compelling features from centralized networks that facilitate compliance.<\/p>\n<p>Lastly, there is a whole ecosystem of businesses creating compliance tools that better assess and analyze risk. So not only do companies have the tools they need to comply with existing regulations, but there are innovators ready to adapt those tools as needed. Blockchain technology can be, and is, used in a compliant fashion today. It employs the traditional know your customer and anti-money laundering practices used by regulated financial institutions and the enhanced transaction tracing capabilities afforded by a public ledger. These technological developments open the door to more efficient risk assessments, lowering the barriers to financial inclusion. That\u2019s a testament to how regulation and innovation, when taken in tandem, can change the world for the better.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Dialogue_is_the_answer\"><\/span>Dialogue is the answer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>What\u2019s unfolded recently in the regulatory sphere reinforces the importance of an open, collaborative dialogue between stakeholders \u2014 public and private \u2014 to determine the best ways to regulate blockchain and digital currency. Attempting to create regulatory frameworks behind closed doors or as knee-jerk reactions to perceived risks without regard to potential benefits isn\u2019t a productive way to approach innovation.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The need for a dialogue between crypto businesses and regulators<\/em><\/strong><\/p>\n<p>To do this right, we need to be working together. Blockchain innovators need a seat at the table to help educate regulators about what this technology is (and isn\u2019t). We want to work together with regulators to shape the guidelines around this technology, addressing their concerns while allowing for innovation in the critical quest to expand access to financial markets and economic opportunity. Creating the right policy and regulatory frameworks for blockchain technology, if done in partnership, can finally put an end to the misconception that regulation and innovation are at odds. We look forward to the role we can play in proving the value of this partnership. <\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Candace Kelly<\/strong> is the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> counsel and leads legal, policy, and government relations at the Stellar Development Foundation, a non-profit organization that supports the development and growth of Stellar, an open-source network that connects the world&#8217;s financial infrastructure. Candace started her professional career with the United States Department of Justice where, over the course of 17 years, she held positions as a legal and policy advisor in leadership offices in Washington D.C. and as a prosecutor in the Northern District of California. She holds a Bachelor of Arts in East Asian Studies from Williams College and a J.D. from the University of California, Hastings College of the Law.<\/div>\n<\/div>\n<p><template data-name=\"subscription_form\" data-type=\"consulting_newsletter\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/blockchain-will-thrive-once-innovators-and-regulators-work-together\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Blockchain will thrive once innovators and regulators work together &#8221; There is often a perceived tension between regulation and innovation. A pervasive narrative has emerged that these two important parts of our society are at odds with each other. In reality, it\u2019s when these two come together as partners that we can effect change&#8230;<\/p>\n","protected":false},"author":1,"featured_media":250649,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDUvZGJkMTczYjYtYzcxNi00MjhkLWEyMmItNGMxNTA0NmQ2ZGU2LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74859,74894,74863,76356,75141,117,71511,55229,70934,4965,67874],"class_list":["post-250648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-aml","tag-blockchain","tag-cryptocurrencies","tag-fincen","tag-kyc","tag-business","tag-government","tag-law","tag-regulation","tag-technology","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/250648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=250648"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/250648\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/250649"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=250648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=250648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=250648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}