Non-profit think tank CD Howe has published new research in which it offers a possible roadmap for Canada’s policymakers as they consider ways to regulate blockchain.
Released earlier this month, the report asserts that blockchain and distributed ledger tech will be unlikely to replace entire incumbent industries. Rather, it posits that the tech will offer the opportunity for incumbents to modernize their infrastructure.
Perhaps most notably, however, the report outlines three suggestions, advising policymakers to design a “principle-based regulation regime”, ensure the technology achieves “end-user cost efficiencies”, and determine the role for government as a facilitator or direct operator of blockchain-based platforms.
The report ultimately shies away from offering any firm directive, though it clarifies what it believes the choices are for traditional financial market administrators.
CD Howe writes:
“In determining this balance, policymakers and regulators will have to decide whether to design rules and regulations along a principle-based methodology like was done with the Internet in the 1990s or whether to operate on a case-by-case basis.”
Further, it argues for a need to develop further trust among the broader market before blockchain sees wider adoption within Canada.
“Any new blockchain technology application also will have to first build up trust among its potential users,” the report’s authors state.
Additional concerns listed include whether blockchains can adjust to dynamically meet the needs of users and whether the replication of costs that come with some existing consensus mechanisms can be solved with creative approaches.
The report comes amid an uptick in interest in interest from governments and regulators around the world. Canada’s central bank in particular has been experimenting with the tech, developing a test platform for payments.
Canadian Parliament via Shutterstock