Everyone is talking about blockchain, especially when it comes to promoting decentralised structures. But many still see the integration into existing legal systems, especially in the financial sector, as a challenge. When we think of regulation in the financial sector, we immediately think of the Federal Financial Supervisory Authority (BaFin). The most valuable task of this institution is to preserve the integrity and stability of the financial system. The most important thing is to protect consumers.
What is Blockchain and what is BaFin’s position on this technology with regard to its regulatory guidelines?
According to BaFin “Blockchain Technology – Thoughts on Regulation”, one can basically imagine the blockchain as a digital account book. This digital book can be publicly viewed by anyone and does not permit any changes. Once stored and encrypted, the data remains in its form forever and cannot be deleted. Only new data could be added.
Another interesting aspect of the blockchain is that it is “distributed”. This means that the blockchain cannot be controlled by a single participant or by an organization. The network and therefore all participants manage and secure the resulting data, which makes the blockchain a forgery-proof technology.
So far, BaFin has pursued the principle of technology neutrality and equal treatment despite the high transparency of these systems. Dsa means the same business, the same risk, the same regulation regardless of the technology used.
Stability of the financial system must be guaranteed
It remains to be seen whether this will remain so in the future, because even if the intermediary function of credit institutions loses importance, the overriding objectives of financial system stability and consumer protection must be guaranteed. For this reason, the existing regulations should not be seen as a brake on innovation, but as opportunities. To transform and optimise the existing teething troubles into the further progress of this technology, so that the potentials, such as transparency and counterfeit protection, can be unfolded across industries and a complete integration becomes comfortably possible. Read also the article: More confidence in crypto currencies through regulation – Maxim Bederov
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