TECHNOLOGY

Firms wait for regulatory guidance on blockchain before taking action

Regulators worldwide have recently started weighing in on the use and implications of blockchain technology.

By Hayley McDowell hayley.mcdowell@strategic-i.com February 09, 2017 11:45 AM GMT

Almost 25% of senior-level financial services professionals have said their firms are waiting for regulatory guidance before taking action on blockchain technology.

A recent survey conducted by Synechron found just under 17% of those polled cited regulatory guidance as an issue related to blockchain they’re most interested in seeing solved.

Technological uncertainties and limitations were listed by the majority of respondents as issues ahead of blockchain implementation.

Almost 30% said interoperability was the most important issue, while 20% listed privacy concerns as the biggest problem.

Regulators worldwide have started giving views on blockchain technology and possible regulatory oversight of its use. 

Last month, the European Securities and Market Authority (ESMA) said blockchain technology has not reached a point where regulatory action is needed, so has taken a ‘wait and see’ approach towards it.

Senior risk analysis officer, Patrick Armstrong, explained the approach should not be considered as passive, but instead “one in which we actively try to learn more about the innovation.”

“By waiting to see how the innovation develops we do not risk stifling a potentially socially or economically useful product or process,” he said.

Even the US Federal Reserve has weighed in on the technology, stating the industry’s understanding and application of blockchain is still in its infancy.

It explained given the technology’s early stage, a number of challenges to the development and adoption of blockchain remain, including legal and risk management aspects.

Faisal Husain, chief executive officer at Synechron, explained: “Companies will need to assess carefully how they approach each [issue] individually and this will require knowledge across these areas to make the most strategic decision on how to proceed and to take action.”