Crypto experts have debated regulations and ways for mass adoption of crypto at the World Blockchain Summit in Dubai. If they are right, the system they’re developing threatens to disrupt the traditional, centralized monetary system, which beyond payments is used to generate government revenue via taxes.
“Regulation allows us to grow the space, and it’s in everyone’s interest to grow the space,” said Binance’s Middle East and North Africa director Omar Rahim.
Nick Saponaro, the 28-year-old CEO of crypto platform Divi, is less confident in the role of regulation in the crypto sector, which is defined by its decentralization.
“There’s a level of regulation that makes sense,” Saponaro told Arabian Business on the sidelines of the conference. Saponaro, who is from the US, promises he’s not an anarchist, but “crypto is in many ways,” he noted.
So far, most regulation focuses on how to tax the tech to control monetary policy, while other authorities, including the US regulator, are concerned about using the system for illicit trade and scamming, which has happened as some crypto coins have emerged and disappeared with the founder fleeing with cash.
If those experts are right, the system they’re developing might disrupt the traditional, centralized monetary system, which beyond payments is used to generate government revenue via taxes.
Mexican founder of Gaugecash Manuel Blanco Appleby said the technology exists to incorporate a taxation mechanism into the blockchain by taking a small portion (as small as 0.001%) of each transaction that would flow instantaneously into government coffers.
“If the government of Brazil comes to me and says: ‘We will ban the system, because we need taxes,’ I understand that,” said Blanco Appleby. From a taxation and public policy perspective, there are more questions than answers, but with blockchain technology, it’s possible.
“If the government of Brazil comes to me and says: ‘We will ban the system because we need taxes,’ I understand that,” said Blanco Appleby. “I think it could be a win-win situation.”
Saponaro, who is reticent of regulation, answered what governments should do.
“I think allow people to move fast and break things, but not break the law and not put people at risk,” he said. “And work with the professionals in the space. We are happy to explain it.”
Still, remain questions on how to adequately conduct know-your-customer checks and enforce anti-money laundering. How much regulation should be? What form should regulation take?
Some countries, like China, have banned it outright. In other countries, like El Salvador and Venezuela, governments have welcomed the highly volatile digital currencies as they manage to represent greater stability than their collapsing national currencies. Yet others have moved to establish central bank digital currencies (CBDCs). In the UAE, the government has opened its doors to crypto, establishing incubators and accelerators built for purpose.