The Regulatory Structure and Blockchain Adoption
A blockchain company focused on the enterprise-level adoption of the technology might have felt disappointed in 2017. On the one hand, Initial Coin Offerings are able to raise billions of dollars from investors over ideas that have not been realized yet. However, experts working to develop enterprise blockchain strategy are still struggling to make companies realize their worth.
The last 18 months have been a rollercoaster ride for the adoption of blockchain technology on the enterprise level. Firms have surpassed the phase of power points into a sphere of pilots and proof of concepts and now are in the era of industrialization. But, the space is still far away from including decentralized ledgers into their framework that guarantee better and faster records of the transaction.
Paul R Brody surveyed 100 executives and clients managing blockchain implementation from EY Global Blockchain Summit in New York this April. The results showed that most of the participants were more interested in enterprise applications against digital currencies and financial services. The findings do back up the theory of emerging relationships between trusted parties over private blockchains. Majority of the cases do not involve payments.
According to the team, the closed environment requires little to no regulatory framework. On the other hand, 61 percent of the respondents accepted that regulatory complexity was their number one concern in regard to extensive adoption.
It is exciting to know that initial users of the technology are open to accepting the new phase of its usage. One of the developments will involve settlement through virtual smart contracts and digital payments across the public network. But payments also involve the arrival of the regulatory authorities.
What was most astonishing that all the participants agreed on the main reasons for blockchain adoption which included data integrity (16 percent), transparency (18 percent) and operational efficiency (27 percent).
The most appealing feature of the technology is its ability to record flow of goods and services in real time with payments in a single infrastructure. Thus, it enables firms to have a closer and deeper look at their transactions to minimize loss through damage and profits by making necessary improvements.
As blockchain was designed to assist digital tokens throughout their journey in the crypto market it can be used to buy, sell, insure, track and add value to products automatically and consistently.
When a company releases its assets on a public network, it has to comply with the same rules as banks like Anti-Money-Laundering (AML) and Know-Your-Customer (KYC).
Currently, EY audits accounts of numerous exchanges and financial services companies and is optimistic about the outlook larger enterprises have over the breakthrough technology. Meanwhile, SEC’s stance over the decentralized ledger system is unclear as it cannot be easily defined as virtual currencies.
It is a matter of time till large companies adopt the technology in spite of hazy stand of regulatory authorities of the country. Again, the earlier one uses the applied science; the better will be its future standing. It’s not a matter of doubt that smart contracts are a future of business deals even if they get restrained by policies.