What is this balancing act that we see with innovation and regulation and who is this really benefitting? (Moderator: Mandy Naidoo: Chief Compliance Oﬀicer at Yellow Card)
Andrew Whitworth: Policy Director, EMEA at Ripple: For me the key point is that there isn’t necessarily a trade-off between regulation and innovation. The way I see it is that regulation is the platform that builds innovation. That’s quite abstract, but the way I think about it is that regulation, and by this I mean proper full regulatory frameworks, give businesses the certainty they need to build their products and services as well as their teams and as these services that promote innovation and can make financial activities more efficient more user friendly and ultimately lead to economic growth. So the regulation builds trust by giving consumers protection business certainty and by signalling to the wider financial and economic ecosystem that a given firm or activities legitimate and has been given considered treatment by the appropriate authorities. And that has a commercial effect by unlocking business relationships that may otherwise be more uncertain.
There is of course still a balance over the question of what type of regulation and how much?
If jurisdiction gets regulation wrong or deliberately uses regulation to push down an innovative sector, that would of course have a negative effect on innovation and sectoral growth, but the good thing is that for the crypto sector there’s a growing international consensus core principle of the same activity, the same risk, the same regulation. coz that implies technological neutrality and a level playing field between blockchains ordered finance and traditional finance and regulation based on the respective risks of the activities undertaken. So the activity is regulated not the technology that enables it.