The challenges of regulating the use of crypto-coins and blockchain-type platforms
Written by Rosine Kadamani
Co-founder of the Blockchain Academy
Regulating activities involving crypto-coins and blockchain-type platforms is one of the greatest challenges permeating this theme. The main reasons are:
(1) We are still at the beginning of the exploration of its potential: every day we are inundated with news about new uses and projects; thus, although it is clear that, as an assumption, the most adequate regulation would be the one that accompanies the use of cryptos and/or platforms, anticipating the effective scope of these novelties, as well as what may occur from their encounter with other technologies, is impossible to be achieved at this time, hampering the exercise of specific standards;
(2) Complexity of the theme: the subject is so broad, and provokes reflections from so many perspectives – technical, economic, business, legal, political, philosophical, among others – that it is very difficult to have a fairly precise global understanding. It has been common to see lawyers discussing technical issues (I always try to understand how far it makes sense to reach the conversation), technicians expressing their opinions on political models, and so on. The result of this interaction is very interesting, but it is also risky not to understand clearly how far what is being said is in fact acquired horizontal knowledge or only the repetition of something read but unfounded;
(3) Initial and limited volume of good references: professionals in their various areas of activity are beginning to position themselves as specialists, but it is still a while before they can consolidate even more as references and that we have more recognizably good bases of research material;
(4) Paradigm change: the initial and natural reflex of the lawyer/jurist is always to try to frame the issue in the existing norms. It happens that we are now dealing with a new paradigm, totally different from what we already knew. There was a step beyond that provoked by the Digital Revolution, originated from the Internet. In particular, I draw attention to the difficulty of defining “where” the crypto-coins are. They are not stored on any central server, but registered in a distributed way among “nodes” on machines that are all over the world;
(5) Global theme: this is a matter of universal scope, which does not recognize cultural or territorial barriers. Citizens from all over the world, from all backgrounds, ages and beliefs are discovering and speculating or exploiting products and services derived from blockchain platforms;
(6) Difficulty in surveillance and punishment: despite the illegal use of cryptos and/or blockchain-type platforms to challenge the State and its existing generic regulations, it is a fact that authorities have limited resources to reach all those who are infringing such norms, and also to punish them.
We are experiencing a very particular moment in History, in which we, the operators of law, are provoked to detach ourselves from the pre-existing norms and to strengthen the debate on the structural premises of our legal system. What is currency? What is territory? What is the State? These are questions that need to be revisited with some urgency and care so that the challenge of the Law to contribute to a society that interacts in a more harmonious way is more adequately addressed. Going back to the substance and bases of the social contract (referring here to the reflections of the philosopher Jean Jacques Rousseau) and letting go of innocuous forms of legislation will also be essential for the state to continue to be legitimized by the people in this new social model being created and transformed at an exponential rate.