There are four regulatory strategies to design a more trustworthy and secure environment:
- Some countries prohibit ICOs.
- Some countries choose to apply existing rules and regulations to new technologies.
- Some countries focus on the regulation of the applications of the technology.
- Some countries regulate the underlying technology (such as distributed ledger technology).
Yet, most countries stay silent as rules and regulations have a negative impact on innovation.
Those in charge of regulation also know that if the rules are too strict, ICOs and other digital applications will move to more friendly jurisdictions, which is economically and socially undesirable.
So, does this mean that we shouldn’t do anything and adopt a “wait and see” approach?
The answer is no.
But we shouldn’t focus on traditional models of rules and regulations. We shouldn’t introduce new regulations that are based on text, words, best-practices, guidelines and compliance.
We must realize that in the current digital age: rules, regulations and trust will increasingly be embedded in the technology itself.