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It was only a matter of time before the regulations infiltrated the world of cryptocurrency. In 2015, New York became the first jurisdiction to do so. BitLicense was created to serve users in the state of New York. Many have claimed that excess compliance and regulation would have limited startup activity.
The goal was to support and promote companies with new and emerging technologies. However, it is important to remember that those who regulate are not always right. In the case of New York, he has alienated large start-ups and exchanges.
Bitfinex, Poloniex, Kraken, is shapeshift they all left the area, a move that completely changed the Bitcoin landscape in New York. Almost four years later, these exchanges have not yet returned to the Big Apple.
There have been some cryptocurrency companies that have remained. Axoni, Digital Asset Holdings e symbiont they are all examples of blockchain startups based in New York. Blockstack is Consensys they are also entering into action. In addition, the New York Ethereum and Bitcoin meeting groups have at least five thousand members each.
Other jurisdictions learned from New York, even if its BitLicense has not completely killed all cryptocurrency activities. They have distinguished their policies so as not to be as restrictive as the elements contained in the BitLicense of New York.
Decisions for the Blockchain regulation
The challenge is determining when to move the regulations. Too early and technologies do not have the freedom they need that can kill innovation or force it to move away. Too long and there can be significant repercussions for the public, which could cause further damage.
Smart standards encourage and support innovation, even if it protects against abuse. It is better than no regulation, which can create clear evidence of harm to the public. The problem is finding a way to achieve that delicate balance between the two.
Regulators must discover a model that allows them to support cryptocurrency and blockchain technologies, while continuing to support their full potential. They should also realize that disruptive companies are not necessarily against regulation.
Furthermore, the awareness that regulators and governments are intervening can help alleviate fears. It helps to create a level of trust and has done so in the form of regulations Amazon, Netflix and Paypal. There are times when regulators must intervene and establish rules for new technologies.
Maturation of the Blockchain industry
Obviously questions remain about where and when it is necessary to draw the line. This is particularly true as the newest and most innovative technologies continue to evolve and grow. Hackers and criminals will try to find out ways to exploit the blockchain whenever possible. But this is true regardless of technology.
Which means that governments will be ready to intervene and react in an exaggerated way. It will propose regulations that will lead to legitimate companies suffering from the fallout.
The important thing to remember is that regulation is not a new challenge. It does not mean the end of the cryptocurrency and blockchain innovation. If anything, it's a sign of the industry's maturation.
Despite what others say, blockchain is not a technology without trust. There are relationships within the industry that require trust. These make the technology itself more reliable for those who use it.
Laws, regulations and governance can often be seen as a heavy application. The goal is not to punish those in the industry, but rather to create rules for the game that prevent others from getting hurt and manipulating.
Just as the faults in certain sports do not prevent the sport from growing and maturing, the use of regulation does not prevent a technology from doing the same. Its purpose is to discourage frauds, hackers, manipulation, corruption, theft and other criminal activities.
Used in the right way at the right time, regulation will serve to grow blockchain and cryptocurrency. Do not hinder it.
Image source: "Flickr"
