QUESTION ASKED: How should blockchain be regulated?
This month, the Federal Reserve joined a long list of government institutions across the world in releasing its views on blockchain. This distributed ledger technology, which underpins the well-known and controversial bitcoin cryptocurrency, is essentially a recordkeeping system that can replace a periodically-updated central database—a design that underlies most financial systems used today—with a clever distributed database that updates in near real time.
Yet regulators have struggled to strike a suitable posture in response to blockchain developments. On one hand, there is nothing yet to regulate, with no known commercial-scale financial blockchain applications. On the other hand, it is still unclear why or how regulation should change in anticipation of technological development.
Do you care to imagine the state of software today if in 1979 “the Federal Reserve joined a long list of government institutions across the world” seeking to regulate VisiCalc?