Blockchain Australia asks for ‘nimble’ regulatory regime to help local DLT industry
Blockchain Australia, the industry body representing local businesses and individuals participating in the nascent technology, has asked for government and regulatory support in building a thriving blockchain ecosystem.
The body describes itself as encouraging the “responsible adoption of blockchain technology by the government, industry, education, and startup sectors across Australia as a means to drive innovation and create jobs”.
“The development of blockchain technology will enable business process transformation, impacting markets in almost every sector of the global economy,” it wrote in a submission [PDF] to the Senate Select Committee on Financial Technology and Regulatory Technology in its second round of reviewing the potential of fintech and regtech down under.
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But in order to execute on its mission, Blockchain Australia said it needs a little bit of wiggle room from regulators. According to the organisation, regulatory uncertainty is a “persistent and recurring theme” in blockchain and distributed ledger technology (DLT) discussions.
“Clear regulatory frameworks are drivers of both efficiency and innovation,” it said.
“Regulation should aid the establishment of the fairness and openness uniquely enabled by this technology.
“Certainty afforded via the development of applications by a nimble regulatory regime will be the catalyst for uptake across industry, creating high value knowledge economy jobs and growth.”
The body said the development and application of blockchain technology must include recognition that regulatory bodies will participate. This, it said, would be through anti-money laundering, know-your-customer functions, and counter-terrorism financing protocols.
Standards Australia, the country’s non-government standards body, was charged with managing the secretariat of an international technical committee for the development of blockchain standards by the International Organization for Standardization (ISO) in September 2016, with 16 ISO member bodies including Germany, the United States, the United Kingdom, France, Canada, Estonia, Japan, and South Korea also participating in the development of ISO/TC 307 Blockchain and electronic distributed ledger technologies.
The World Economic Forum recently provided a number of recommendations [PDF] on the development of standards, with Blockchain Australia saying such direction reinforces the importance of “eliminating uncertainty” within the technology. It also said the development of regulatory frameworks could give confidence to those who seek to invest in building or implementing using blockchain.
“This outcome cannot be achieved without government taking an active role in both elevating innovation using this unique intersection of technologies as well as fostering both resource allocation and a prioritisation of adoption across existing industries,” Blockchain Australia said.
It also said government support is critical to confidence in the blockchain sector.
“The lack of consultation in jurisdictions other than our own are at odds with an industry that seeks to be involved in dialogue with government and regulatory bodies,” the submission continues. “While our members are grateful at the key members of the public service and regulators who take time to understand this technology and seek to assist, the lack of clear support from the top and requirements which appear inconsistent with the way blockchains operate, is a blocker to faster growth in jobs in the sector.”
It said the foundations of regulatory support for the blockchain industry “must be links that will lift up the Australian economy, and not become the chains that bind”.
“It is our strong view that the Australian government can, and should, send a strong message,” Blockchain Australia said.
“With positive support for the sector from the government and continued R&D grants availability, Australia can be positioned as a ‘fast follower’ which retains and grows Blockchain jobs and businesses.”
Over two years ago, the federal government’s Digital Transformation Agency gave advice to those getting lost in the buzz of blockchain that they should turn their attention elsewhere.
The agency’s chief digital officer Peter Alexander dunked on its use, saying that “for every use of blockchain you would consider today, there is a better technology — alternate databases, secure connections, standardised API engagement”.
“Blockchain: Interesting technology but early on in its development, it’s kind of at the top of a hype cycle,” he said.
The government entity has even published a questionnaire for organisations to self-evaluate before bothering with something that could alternatively be stored in a secure database.