Some regulators are trying to separate blockchain and digital asset regulation, something that could be unfeasible, according to Vitalik Buterin.
The recent FTX debacle has caused serious economic losses to many users and institutions that had invested in some way in the exchange. This fact has led regulators around the world to raise the issue of urgent need for regulation for the sector.
Many countries are betting on a regulation that favors the growth of the sector and to strengthen the use cases of blockchain technology, as they believe it could be beneficial for the future of the financial sector. However, other countries have a negative view of cryptocurrencies and digital assets.
This vision, in many cases, comes from a lack of knowledge of the sector, causing regulators to try to create separate regulatory frameworks for blockchain technology and cryptocurrencies.
This is the case in Singapore, where regulators have tried Distinguishing between blockchain and cryptocurrencies when creating legislation for the sector. An approach shared by legislators in India and China, where work is already underway on blockchains that do not contain any type of digital asset.
Vitalik Buterin on separating blockchain and cryptocurrencies
In a recent interview, in which he gave his vision of what happened at FTX, Vitalik Buterin, founder of Ethereum, has also shared his vision on this type of regulations.
Buterin appreciates that some countries are working to create regulatory frameworks that are beneficial to the development of the sector. However, he believes that focusing on blockchain and cryptocurrencies as something separate will be negative and ultimately it will be a waste of time for the industry as a whole.
The founder of Ethereum is convinced that Blockchain and digital assets are one and the same; one cannot be conceived without the other.
“I think Chinese regulators have tried to separate blockchain from cryptocurrencies and the reality is that if you don’t have digital assets, then your blockchain is fake and no one is going to care about it,” Buterin explains in the interview.
On the other hand, he understands that Singapore regulators intend Discouraging speculation in cryptocurrencies, without resorting to a direct ban.
In this regard, he acknowledges that it can be very difficult for regulators to find a balance between legislation that favors growth and, at the same time, prevents bad actors from entering the industry. However, for Buterin, There are always ways to do it right.
On balance and friendly regulations, the founder of Ethereum points out that the “biggest risk” of this approach is precisely that it attracts bad actors. As an example, he presents the case of Do Kwon and Terra, which They fled the Chinese ban, to land in Singapore.
How to protect the crypto community from bad actors
In his interview, Vitalik explains that the Bitcoin community loves any powerful person who supports Bitcoin, which for him is crazy. In this context, he took the opportunity to criticize again the adoption of Bitcoin by El Salvador.
Vitalik Buterin explains that not comfortable with Bitcoin adoption because Nayib Bukele's government is not “totally democratic” and does not “respect people's freedom.”
Buterin believes that the Ethereum community es more selective with those who promote the tokenRegarding bad actors, the only thing the community can do is support the good projects and publicly oppose the bad ones.
This approach does not eliminate the need for regulators to add safeguards and the community “educates” usersHowever, the open nature of blockchain limits the prevention of access by bad actors, so this is an issue that will need to continue to be addressed.
