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The government’s implementation of technological regulation is slow by design

The government’s implementation of technological regulation is slow by design, Crypto Trading News

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Since the dawn of the digital asset industry, we’ve seen bad players exploit the lack of consistency in how exchanges work. Many view the crypto sector as a New Age Wild West that is causing some countries to simply put a ban in place instead of trying to understand the fundamentals of technology that they don’t understand.

Governments, including American ones, were created to be inherently reactive especially with regard to compliance with legal regulations.

Well thought-out policy initiatives such as tax breaks for companies hiring new employees or the child allowance can serve to stimulate economic activity or to encourage certain decisions of the population, but this has always been a challenge in the regulatory process. We’ve seen it in the digital assets space, and we’ve seen it in other high-tech areas like self-driving cars even cloning and automated phone or text-based marketing or fraud.

If even a hint of the concept of a new technology comes up, a preventative attempt can be made to ban it. In terms of regulating industry to improve general well-being, it takes time for regulators who are not experts in technology to come together and develop a set of rules that will define the industry.

Often times, they have to wait and see what goes wrong before worrying about how to protect it. That is at Cryptocurrencies the case. In the early days, regulators didn’t fully understand how the mechanics worked, and whichThey thought it was a fad. Now they are facing the reality that digital assets will stay here.

Central banks argue over which digital currency will have the upper hand in the world of international remittances. It was not always like this. First came the beta tests. The Bahamas jumped to the top with the sand dollar. China has launched a multi-stage beta test of its own digital currency involving major economic centers. El Salvador took the first step to Bitcoin to make it an officially accepted currency.

During all this time, other central banks have been watching, strategizing, and adjusting their own approach.

This is not entirely different from the way a policy is created. Think about how the state of Massachusetts was a beta test for Obamacare before President Obama was even elected to the White House. State laws on new technologies or new concepts almost always come before national law – eEven mundane concepts like sales tax doesn’t sound like groundbreaking.

However, it was years after online shopping took the world by storm for state and local governments to tax online sales in the same way as brick-and-mortar locations.

That’s the process. A new innovation arises. There is a little outcry. Regulators and politicians are waiting to see if it’s more than a fad. Then the innovation reaches a boiling point and action is taken. Our government is slow and deliberate, for better or for worse.

A joint November statement from the Board of Governors of the Federal Reserve Systems, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency appears to show that the government is beginning to change the turnaround in digital assets. The concern goes beyond simply stopping money laundering. The aim now is to investigate ways to better regulate the custody of digital assets and to take a holistic view of the industry.

We have finally reached the cusp of action – just as our government was designed by the founders. What does this mean for digital assets? When the industry becomes safer, it enters the mainstream. This is really the beginning of an international transformation of our participation in the financial markets.

Richard Gardner is CEO of Modulus, an international financial technology company, and has been a globally recognized subject matter expert for more than two decades, providing complex insights and analysis on cryptocurrency, cybersecurity, financial technology, surveillance technology, Blockchain-Technologies and in general provides management best practices.

Featured image: Shutterstock / ArtStudio29

The post-implementation of technological regulation is slow by the government, first appeared on The Daily Hodl.

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Source: Crypto News Deutsch

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