Chinese Scholar Yang Dong: Blockchain-Powered Regulation Is Inevitable
“Blockchain is able to revamp the way that authorities regulate the financial market, and to improve their regulatory capabilities. Then, blockchain-powered governments can better distinguish ‘good’ innovations from bad ones, and will be more tolerant of innovation than before. ‘blockchain +supervision’ is an inevitable development trend.” said Professor Yang Dong, Director of Big Data, Blockchain and Regtech Lab of Renmin University of China, at a blockchain forum on April 16.
Although Prof. Yang is bullish on blockchain, he pointed out that the industry still faces legal challenges. It seems impossible for lawmakers to amend the existing laws at present. Alipay, one of the most popular mobile payment platforms in China, has not yet obtained the legal position, let alone ICOs, but this reality does not prevent the blockchain industry from implementing the self-regulation.
“What should we do before the law is revised? The answer is to develop self-discipline and establish standards in the blockchain space. Laws are always formed on the basis of the industry standards. Therefore, blockchain players do not need to complain and grouse about the the government. Everyone in the industry should focus on formulating standards and rules together, and then offer them to the government, telling regulators how to supervise it.” Yang said.
Further more, Prof. Yang shared his insights into blockchain regulation:
“Back in 2015, I once thought about how to combine blockchain with crowdfunding , and the idea was strongly supported by some senior government leaders. At that time, we set up a crowdfunding exchange to trade equity, creditor’s rights, and IPs in southwest China’s Guizhou Province. Moreover, we also wanted to launch a legalized and government-approved token trading platform which was also backed by then Guizhou Party Chief Chen Min’er. However, as China stocks crashed in 2015, these plans had been scrapped.”
Yang revealed that after more than a year of special rectification on risks in Internet finance, the China Securities Regulatory Commission (CSRC) has rolled out an equity crowdfunding pilot, and large institutions are preparing to obtain this license. If one gets an equity crowdfunding license,that means the institution obtains a legitimate ICO license, which is of “fundamental importance” to the blockchain development.
Prof. Yang also called on China to actively take part in the creation of blockchain standards. He believed that the biggest risk China currently faces in blockchain is failing to gain the upper hand in this initiative. So China should embrace blockchain and play a leading role in the formulation of blockchain standards.
In the end, Yang said that China also needs to accelerate the pace of the research and development (R&D) on blockchain-based identity authentication and privacy protection. In the past 20 years, the biggest original sin of Chinese Internet companies had is abusing the public’s information. Therefore, blockchain can demonstrate its value in protecting the privacy of the mass.