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How can international cryptographic standards influence space?
The cryptographic space has grown in recent years. It offers over 2,000 coins, numerous blockchains and the number of encrypted trading and exchanges platforms is constantly increasing. While this is a good thing that shows that space is progressing, the fact that every project alone makes it very difficult to introduce universal standards.
This is one of the reasons why cryptocurrencies still need to be adopted because regulatory uncertainty is one of the biggest problems at the moment. Of course, there have been numerous attempts to solve this problem, especially in the last year. Several groups have emerged dedicated to the solution of these problems, with some of them trying to create international standards regarding the way in which the platforms are managed, while others have tried to do the same at national level.
Recently, however, another theory has begun to gain popularity, namely that cryptography may not be able to be standardized in the first place. Making it standard could also prevent innovation, which is another concern of those seeking to regulate space.
GDF Efforts
Executive Director of Global Digital Finance, Teana Baker-Taylor, has recently stated that GDF aims to show that self-driving and self-governance are the best practices for industry and its consumers. Moreover, it inspires confidence in digital currencies, which grows just as the sector itself continues to mature. In short, GDF wants to create voluntary guidelines, as well as codes of conduct for various aspects of cryptographic space, including portfolio suppliers, token sales, evaluation sites, cryptographic exchanges and, finally, cryptocurrencies.
The association already has many well-known names on its list of members, including Circle, R3, Diginex, Coinbase, ConsenSys and others. Furthermore, it has been confirmed that the association has already established contacts with competent public institutions and legislators. And, while regulators have sent mainly conflicting signals about the idea, the fact is that the association includes over 250 people and companies, which has attracted the necessary attention.
Furthermore, the GDF went beyond simply proposing codes of conduct. They are also working to create a taxonomy for cryptography, which will organize the coins in three different groups, including consumer tokens, payment tokens and financial activity tokens. Since the governments of the world have had problems with the definition of digital currencies for years, this effort is also considered more than necessary. The only problem is that governments do not yet want to recognize and classify digital currencies as assets and money, which is why they could completely ignore the GDF classification.
Governments they have begun to develop an interest in cryptography, and no matter how much they oppose them, this interest is the reason why groups like GDF have emerged. Now that I am here, the cryptic world itself has the opportunity to influence the creation of government policies. One of these groups, called FATF (Financial Action Task Force), was originally set up to put an end to money laundering. This group also managed to bring numerous changes to the regulation of virtual resources in October.
While focusing on the fight against money laundering and the financing of terrorist attacks, they also allow various cryptographic services to operate according to their needs and the needs of their users. In other words, all cryptographic service monitoring is done only for AML / FFT purposes. They see no reason to interfere with issues related to cryptographic decentralization or volatility.
On the other hand, there are also other groups and their representatives, such as the president of the German Federal Financial Supervisory Authority, Felix Hufeld. He believes that the global crypto community is the one that needs to develop international standards that will be used to manage ICOs. According to him, the number of ICO is increasing, as is the volume of money that is increasing. In the meantime, their investors have only minimum rights, which is something that has to change.
While this may limit ICOs and prevent them from doing certain things, governments have been rather slow when it comes to making their move. Thanks to this slow reaction, groups like GDF can do it first and bring a very cryptic set of standards.
Meanwhile, cryptographic space continues to develop and grow, which includes the production of new commercial institutions. This idea has appeared in all parts of the world. In the United Kingdom, for example, CryptoUK was created. Its purpose is to create new standards that regulate the UK cryptic industry. However, the goal is also to go further and bring these standards to the international scene.
Many believe that this is the path that encryption will require, since many self-regulatory bodies of this type are already working at the national level. However, the day is approaching when it will not be enough, and a set of standards for the whole world will have to appear so that the cryptocurrencies enter the mainstream.
While it is a slow process, many scrambled companies are already showing signs of willingness to cooperate with others in developing these standards.
Does the introduction of standards reduce innovation?
In fact, there is a major concern for the future of space encryption innovation if digital currencies have to meet a stringent standard of standards. Teana Baker-Taylor herself has claimed that numerous industries have lost innovation because of the standards. When it comes to cryptography, however, the situation is different. While the rules will introduce some rules that must be followed, this does not necessarily mean that these rules will limit the growth of the crypt. In reality, they can channel it more productively.
Another fear is that compliant companies may find themselves at a disadvantage compared to cryptic and companies that simply ignore standards. This is believed to be the real danger due to the decentralized nature of cryptocurrencies.
However, once these standards are set, it is much more likely that most companies will adapt and have the opportunity to work with regulators. Over time, this decision will give them an edge, according to Baker-Taylor.
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