Blockchain technology has the potential to “fundamentally change” our financial system by allowing disintermediation, reducing transaction costs and improving market access, according to the Australian Securities and Investment Commission (ASIC). But in order to get the full benefit of this technological advance, regulators should not be “standing in the way of innovation and development.”
In a keynote delivered at the Carnegie Mellon University, Greg Medcraft, Chairman at the ASIC, said that blockchain technology could positively transform capital markets by bringing more efficiency and speed.
However, the technology does not come without risks. Thus, policymakers will play a decisive role, as they will need to build an adequate regulatory framework that mitigates risks while not stifling innovation, he said.
“Right now, we don’t know exactly how blockchain or other disruptive technologies will evolve,” Medcraft said. “But, for now, it is fair to say that they will,” adding:
“Blockchain potentially has profound implications for our markets and for how we regulate.”
Regulators and policymakers will need to ensure that they are “harnessing the opportunities and the broader economic benefits” of blockchain technology, he said, while “not standing in the way of innovation and development.”
“Naturally, harnessing this potential will depend on the integrity, capacity and