Keynotes & Proceedings of BBA’s 4th Blockchain International Scientific Conference ISC2022
Conference Theme: “Expanding the Possibilities, Exceeding the Vision”
As governments move towards closer crypto regulation and national adoption of Blockchain, the 4th Blockchain International Scientific Conference shows the direction of travel.
European, UK and Commonwealth leaders spoke of the benefits of blockchain for their societies and economies at The British Blockchain Association’s annual conference – and how legislators are now approaching regulation in both a new light, and under the cloud of war.
In recent weeks, governments around the world have announced the beginnings of national regulatory policies surrounding blockchain and cryptocurrencies. At the ISC2022, UK, European and Commonwealth legislators described how they are coming closer to understanding these technologies’ implications for society and the economy. The conference also featured ground-breaking blockchain research abstracts presentations from researchers at some of the world’s most eminent and prestigious universities and DLT think-tanks.
Professor Naseem Naqvi, Conference Chair and President of the British Blockchain Association posed a possible solution to the regulatory challenges:
The challenge for policymakers and regulators is that things are moving at a very, very fast pace and they don’t want to be left behind,” he said. “And equally, they don’t want to make decisions that are only evidence-based in their own geography – they are interested in what is happening everywhere else. Innovation is moving much faster than anticipated.”
Yet in 2022’s conference there was no room for pessimism. “It’s always important to see all of these new technologies in terms of how they can interact with one another,” said Lord Holmes of Richmond, who is a member of the Science and Technology Select Committee and a wide variety of specialist Select Committees across Assistive Technology, FinTech, AI, 4IR and blockchain.
“How they can operate in concert to truly transform so many elements of our life; the public space; our public places; our state and society, our economy – for public good; public growth; social growth and economic growth. There is real potential. And there is no need for rose tinted spectacles. There is certainly a great case to be rationally optimistic.”
For The Right Honourable Martin Docherty-Hughes MP, Chair of the All Party Parliamentary Group on Blockchain and a lead contributor to the UK Blockchain Roadmap, some of this optimism lay in how transparency and trust can be rebuilt in both the public and private spheres.
“There are huge opportunities to work across sectors collaboratively to ensure that the positive societal impacts of the differing applications of the technology make a real difference to communities such as mine here in Clydebank and across all of these islands – and are not merely for those in the silos of political and economic power,” he said.
The Right Honourable John Glenn MP, Economic Secretary of the Treasury and City Minister is Minister of State with responsibility for government policy in banking and financial services. He saw opportunity in “… distributed ledger technology as well as fintech, cryptoassets and stablecoins and the potential for a central bank digital currency. All parts of that key plank of a technologically advanced financial services sector.
“I think you need to be very excited about this,” he said. “And we want to pull out all the stops to deliver on those opportunities.”
He added: “In the context of the financial market infrastructures and the real plumbing that underpins markets we are not being naive about this. We recognise that there are potential challenges it will be vital to navigate and also to do this in the right way. So last year we ran a call for evidence that asked the industry for their views on the use of DLT in financial markets, and that was part of a wider consultation on crypto assets and stablecoins and the responses that we got emphasised – as you might imagine – the improvements that could be made in DLT if DLT was used to provide the infrastructure services that underpins financial markets – And these highlighted some key views from stakeholders.
“We’re in the process of working out where changes to legislation should be targeted to ensure they have the biggest impact. And we’re aware that the only way to reach the right solution is to continue our close cooperation with regulators and industry, and that will require testing and experimentation to ensure that DLT is implemented safely and successfully.”
These legislative and regulatory attitudes approaches are clearly having effect. Professor Sarah Green – Law Commissioner of Commercial and Common Law at the UK’s Law Commission – has just published her UK Smart Ledger Contracts Report.
“The reason [the issue of Smart Ledgers] has come to the Law Commission is because perhaps surprisingly, from a non-lawyer’s perspective, the law isn’t actually very clear or certain at the moment. In England and Wales, which is the remit of the Law Commission, it’s not actually very clear what legal rights arise from transactions in relation to those things, and that applies both to the transactions themselves, the smart contract, and also the property consequences of those smart contracts.
“I certainly know for a fact that they’re being grappled with by many others. I and my team sit as observers on other jurisdictional bodies that are dealing with these issues and we’re all asking the same question: Are smart contracts enforceable, can they be enforceable, should they be enforceable? And as a consequence of that, what is the nature of your right in a digital asset?
“We published an advice on smart contracts to government in November of last year. When we started that project, we were just asked to decide whether or not the English law of contract could accommodate smart contracts and what reforms would be necessary if it didn’t. And happily, once we looked at this over the space of a year – we talked to stakeholders from across the board.”
“The users of smart contracts, their legal advisers, the technologists who developed the platforms and contract law academics – it became obvious to us that the common law of contract can actually accommodate smart contracts, and certainly didn’t need legislation.
“So we didn’t we didn’t need to write a new statute or even to change current statutes that there is enough in the common law of contract that can be flexible and adapt to smart contract issues.”
External factors are also driving the adoption of new attitudes at government level. Martin Docherty-Hughes said that he believed if we want to continue as participants in a democratic state, “we need to defend it, in any shape or form. So I think you’ll see a huge change in terms of the interests of legislators [in blockchain and cryptocurrencies] in the weeks and months ahead.“
He was of course referring to the Russian invasion of Ukraine.
“I’ve been heartened to hear in recent days the crypto sector especially raise concerns as to how democratically elected legislators can ensure a wave of sanctions on the Russian Federation must include a range of applications built on the blockchain, including cryptocurrencies.
“I believe this highlights the need, at least from my perspective, for vigorous regulation, not only to enable a level playing field for industry, but to defend the technology from nefarious opportunists who would willingly utilise it without concern for the negative impacts on our democratic way of life.
“I’m afraid from my perspective as a Democrat, that the term disruptive technology is, for me, a mere fallacy, which has been used to reduce transparency, undermine trust and the ability of the majority of citizens to gain the most from a technology such as blockchain. We democratic states, no matter who we are, can no longer abdicate responsibility for our actions and their consequences.
“We all recognise the need to ensure that blockchain is fit for purpose, to enable services to be delivered, for businesses to innovate and to enable, not disrupt trust or transparency.”
Giving an EU perspective, Professor Dr Philip Sandler, Head of the Frankfurt School of Blockchain Centre at the Frankfurt School of Finance and Management, said this was already having effect on the regulation of crypto exchanges.
“We see the Ukraine and the Russia war unfolding. We see that there is increasing pressure on crypto exchanges to also execute sanctions. Apparently Coinbase, Binance and all the other companies are confirming that they are also applying these sanctions towards sanctioned people.
“So what we see here is that there is some kind of regulation dynamics now existing. But we also have to admit that that because of regulation of the last years, the regulative pressure on crypto exchanges is now existing such that they have to follow the sanctions and they have to also.
“The way to regulate what’s going on in the market is to regulate the companies in the market, which are providing gateways from us as human beings into the blockchain.”
But away from war and financial markets, the 4th Blockchain International Scientific Conference also shed light on how government and regulators are beginning to regard blockchain as a public good in relation to the functioning of the state.
Dr Roger Koranteng, Head of Public Sector Governance for the Commonwealth Secretariat addressed the audience by saying that blockchain provided: “State of the art opportunities to delve into deep-rooted challenges of our generation. In the future, the requirements, application and implication of blockchain in the public sector are yet to be fully understood, but blockchain is generating much interest because of the potential it holds to transform the way government works and to create trust in government.
“Blockchain solutions and its disruptive potential cannot be overstated. It has the potential for key functions such as the verification of identity, the registry of assets, the certification of transactions. Corruption is strongly associated with intimacy, hidden transactions and distortion of the laws. Blockchain, on the other hand, provides transparency and immutability.
“Corruption is associated with centralisation and misuse of power. And blockchain brings new dimensions to the decentralisation of power.”
This sentiment was echoed by the President of Pakistan in a recorded video address to the conference. His Excellency Dr Arif Alvi said: “The most effective part is the fact that no change can happen when distributed ledger entries are made. This would reduce incompetence. This would reduce ability to make any change or the ability to corrupt the system. I think there is tremendous scope in Pakistan as more and more of you bring in technology, the more and more it is possible that it takes out issues out of human interaction and trust the technology behind it.”
Brian Scudder is the new Deputy Secretary of the British Blockchain Association. He can be contacted for membership enquiries at email@example.com.
Established in 2017, The British Blockchain Association (BBA) is a not-for-profit organisation that promotes evidence-based adoption of Blockchain and Distributed Ledger Technologies (DLT). BBA has authored the UK’s National Blockchain Roadmap in July 2021 and is home to The JBBA – Journal of The British Blockchain Association, the Centre for Evidence-Based Blockchain (CEBB), BAF – The Blockchain Associations Forum, BBA Fellowships (FBBA), and other world-class blockchain initiatives. Check out BBA’s 2021 Year-in-Review.