The Australian state of New South Wales has brought forward proposals for a scheme of regulation of blockchain that would be “flexible,” in order to encourage innovation in the sector.
The Treasury Department of New South Wales detailed its plans in a research paper, which said the state was at risk of falling behind other jurisdictions in embracing blockchain technology.
As a result of increasing uncertainty in the global market, and the development of unexpected scenarios as a result, the need to develop effective regulation for blockchain had become all the more pressing.
The Treasury described the current regulatory picture as “falling behind the times,” and suggested regulators need to do more in order to keep pace with others that are at a more advanced stage of regulating the technology and emerging blockchain businesses.
The report recommends an “outcome-based” approach to regulating industry risk, to take account of the societal, economic and technological changes currently underway in the state and beyond. Accordingly, the report calls for a flexible system to meet the needs of the many and varied firms now developing for the technology.
This would eliminate the need for firms to seek approval from regulators for innovation, while still providing a defined, structured environment in which to develop and grow.
The Treasury said that if executed, the reforms could contribute some A$4 billion to the local economy, reducing the costs of compliance across the sector by over 5%.
The move comes at a time when countries worldwide are examining the laws around blockchain. As societal and technological shifts are brought forward by the COVID-19 crisis, governments and regulators across the globe have been reviewing their regulatory structures to ensure they can support the growth and development of their native blockchain industries