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Blockchain, Crypto, Uncategorized

Blockchain update: Self regulation of cryptos and some scepticism – article collection

Since our last post on blockchain and crypto currency regulation (see here) there have been increased reports of some scepticism in terms of the use of blockchain across different applications. Many see this as a natural progression as the technology moves along the adoption cycle, from the “hype” phase to one where real life production applications are necessary. This post on the CTRMCenter by Gary Vasey entitled “Is The Hype around Blockchain Over?” looks at a variety of stories and initiatives that have not gone ahead. It also refers to this report by BCG, expressing concerns that blockchain is not suited for many commodity trading applications. This report, published by CommTech Advisory on disruptive technologies in commodities found more interest in machine learning and artificial intelligence than in blockchain, at least for the time being.

On the other hand, some initiatives continue. This interview of Carl Wenger of R3 conducted by Larry Cao,  CFA on the CFA Institute’s web site continues to be optimistic about the blockchain and includes within the projects listed one in agricultural commodities. This article on the Tabb Forum also by R3 shows how multilateral netting may be achieved using blockchain technology in a distributed fashion. This article on Coin Telegraph reports on a hearing to the US senate outlining promising possibilities of blockchain in the energy industry in the opening up of markets. And this article on the Economist web site looks at the continuing flurry of pilot initiatives in the energy sector worldwide, albeit at the early stages.

As those discussions continue, the crypto currency world is looming to self regulate where no regulation exists. This article on the Bloomberg web suite reports that several crypto currency exchanges have joined forces to create a relevant working group within the “Virtual Commodity Association” who have posted this press release advising of the first meeting. The group will act to stamp out manipulation and other issues on their platforms. Despite this, the CFTC is exercising some authority over crypto exchanges in its jurisdiction, as reported in this article on the Bitcoin Exchange Guide. Never the less, this article on Coindesk reports on caution expressed by the CFTC is being too hasty to implement new rules.

As the search for viable applications continues, regulatory side effects will need to be considered. At the same time, blockchain based technology may be useful for some regulatory technology applications. And the regulation of cryptos will likely continue, whether via regulator led initiatives or self regulation.


About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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