Instead of waiting for the government to impose regulations on blockchain usage, players in the industry should start a conversation on self-regulation, said the Australian Digital Commerce Association (ADCA).
ADCA CEO Nicholas Giurietto said when blockchain technology started becoming prominent in 2016, the Australian government was concerned it could be used for money laundering or financing terrorism.
So several Australian companies working on blockchain formed the ADCA in a bid to self-regulate. The objective was to maintain an even playing field and preserve their autonomy so the government doesn’t have to step in to regulate.
ADCA is a non-profit company represented by a board of up to 12 members appointed for a two-year term, and has an Industry Advisory Council in charge of drafting policies for blockchain.
In his talk Seeing Eye to Eye: How Can We Work Better with Governments and Regulators at Blockfest 2018 on Sept 26 and 27, Giurietto explained that the association didn’t just come up with the code of conduct on its own, but drafted it based on dialogues with various regulators such as securities, banking and taxation.
“I had many, many meetings, with various regulators. Very much boring but essential,” he said. He adds that the meetings were also an opportunity to educate the regulators and change their perceptions.
The code of conduct for ADCA requires its members to set up trust accounts to avoid trading with customers’ funds, pass solvency tests, have adequate data protection, and transparent pricing and proper channels for dispute resolution in the event customers face issues.
“If you are following all the rules of our code, we believe it can be used as a defence – so even when a company is unsure of the law, it can prove that best efforts were made,” he said.
Another benefit of discussing regulation with the authorities is getting the chance to push for fairer terms.
“The regulators are friends not enemies, their policy plans are usually sound, even if the execution is sometimes questionable,” summed up Giurietto.
With blockchain technology rapidly gaining popularity in South-East Asia, companies will likely have to adopt self-regulation too.
Blockchain Asia Sdn Bhd CEO Gwei Hway said lots of investors keen on blockchain technology are focusing their attention on South-East Asia.
“Ask any investor in this space and they will tell you that South-East Asia truly excites them. What we wanted to get to the bottom of at Blocfest is what that opportunity is, why it matters to businesses and individuals alike, and just how to capitalise on it,” he adds.
“We are all optimistic about the technology, and we all have ideas to make it a reality. But we still need to know how to get there. We need a clear path forward, and to do that we need a consensus on what works and what doesn’t,” said Hway in his opening remark on the first day of Blocfest.
Blocfest featured more than 30 international speakers, including blockchain entrepreneurs, developers, global investors, academics and enthusiasts.