Legal expert Anastasios Antoniou, who is a member of the EU Blockchain Observatory & Forum, Policy and Framework Working Group, is urging blockchain developers to engage with legislators and regulators in order to develop new blockchain regulations that will ensure the technology is harnessed more productively.
In a blog post published on the Oxford Business Law, Antoniou said that blockchain and law have been on a silent collision course for so long, and the only way to achieve a blockchain-friendly legal environment is to find a place for distributed ledgers in the regulatory framework. He explained that the primary reason behind the friction between code and law in blockchain can be traced to the implied proposition that code-based systems running on blockchain can and should operate outside our legal jurisdictions, without any central authority. In other words, there’s a lack of clarity on how blockchain should be properly regulated.
“Radical Rethink” of Blockchain Regulations
Antoniou goes on to state that for blockchain benefits to be fully realized, a new “radical rethink” of current regulations should be adopted so that new rules and new approaches to legal thinking can be applied to blockchain regulations. That entails analyzing blockchain-hostile regulations, identifying omissions in law that causes legal insecurities and identifying opportunities to use blockchain in regulatory environments rather than opposing the technology.
Despite its potential to transform businesses across multiple sectors, blockchain runs the risks of undermining the capacity of government authorities to supervise activities in banking, supply chain, commerce and other vital sectors if critical regulatory frameworks cannot be implemented. In addition, blockchain companies cite regulatory uncertainty as one of the main reasons they are experiencing slow adoption for blockchain-driven solutions. For these reasons, it has become necessary for many governments around the world to consider the prospect of regulations. By having a coherent compliance with new regulatory measures that help to support the progress of blockchain, there would be more certainty and security for this innovation.
Antoniou explained that new laws have to be adopted for blockchain, writing:
“The adoption of new rules is crucial in order to provide legal certainty to the markets and avoid impeding emerging ecosystems and stifling technological development. Nevertheless, any new rules should serve to recognise and uphold the effects of transacting on blockchains.”
Antoniou then concludes by noting that developers should engage with governments to enable legal authorities to cultivate deeper understanding of the technology they seek to regulate.