Self-regulation is the way to move forward for the blockchain industry and accelerate the adoption of the technology while protecting the interests of all stakeholders, according to Cecilia Mueller Chen, a director at Zug, Switzerland-based Crypto Valley Association (CVA).
Discussing the issue at the third general assembly of the Philippine Association of Digital Commerce and Decentralized Industry (PADCDI) in Makati City, Chen drew on the experience of Crypto Valley, the cryptocurrency-focused cluster of companies and foundations operating in Zug. It has been designated a self-regulatory organization (SRO) by the Swiss financial market supervisory authority, FINMA.
“Self-regulation is the way to go because it faster than waiting for government regulators to come up with a set of rules and that could hinder the growth of the blockchain space,” Chen told an audience of blockchain experts and enthusiasts.
However, she stressed that going SRO entails great responsibility, with the community having to make sure all the actors are behaving appropriately to protect the interests of investors and consumers.
This is why FINMA allowed CVA to create independent policies, which transformed Zug’s Crypto Valley into a global blockchain hub. Aside from blockchain, Zug is also a haven for hedge funds because of its location and ease of doing business.
As Chen explained, a blockchain community that wants to establish itself as an SRO must draft a code of conduct to build a strong reputation and create lasting value.
“What is important is you protect the reputation of the group and the community and no member of the organization is involved in illegal activities. That will still prove that the SRO scheme works and those who are misbehaving are not part of the group,” she said in response to a question from the audience.
The first general assembly of PADCDI took place in May, paving the way for the creation of an SRO. One of its objectives is to collaborate with the government in drafting rules or policies that will promote blockchain adoption in the Philippines and attract investors.