Delaware Governor Warns of “Regulating Away the Benefits” of Blockchain

According to an article in American Banker, Delaware Governor Jack Markell told audiences at a recent conference that his state will aim to avoid doling out prescriptive regulations when it comes to supervising blockchain companies and will instead be mindful of how the fledgling industry actually works. While regulators may be tempted to “get in early,” Governor Markell warns that such pre-emptive action risks “regulating away the benefits” of emerging technologies like blockchain. According to Markell, the state's legal community wants to enable the authorization of distributed ledger shares by Delaware corporations through smart contracts. As the Governor explained, "Smart contracts offer a powerful and innovative way to streamline cumbersome back-office procedures, lower transactional costs for consumers and businesses, and manage and reduce risk."

While Governor Markell urged caution over regulating blockchain, some speakers at the conference suggested that banks, exchanges, settlement firms and government bodies should work together to set standards for the industry. The Wall Street Journal reports Frederik Voss, vice president of blockchain innovation at Nasdaq as saying, “Regulators need to help us. There needs to be legal certainty.” Rob Palatnick, chief architect at Depository Trust & Clearing Corporation echoed this sentiment. “When it comes to people putting real money into [the systems] in retirement accounts, 401(k) accounts, insurance policies – there has to be somebody watching,” he told conference attendees.

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