The head of Australia's top securities watchdog said earlier this month that blockchain technology will have "profound implications" for how government officials regulate the marketplace.
Greg Medcraft, who has led the Australia Securities and Investments Commission (ASIC) since 2011, was speaking before the Official Monetary and Financial Institutions Forum Roundtable, a discussion forum for public and private finance institutions, at a meeting in London on 15th February.
In his speech, Medcraft discussed the impending "digital disruption" in capital markets, with a particular emphasis on blockchain technology. He argued that regulators need to move to better understand these changes and how to respond to them.
"Given the speed of change – we need to think about that tool kit now," he said.
He spoke about how the potential adoption of the technology in capital markets could boost market efficiency, cut transaction costs, improve transparency and improve access to those markets for both investors and companies looking to raise money.
Medcraft went on to say that blockchain tech has the possibility to reshape how regulators like ASIC operate, but expressed caution against over-regulation – echoing a refrain from a growing number of regulators worldwide, as well as comments he himself has issued in the past.
"Blockchain will have profound implications for how we regulate. We will need to find the right balance between speed of execution and streamlining of business processes. As regulators and policy makers, we need to ensure what we do is about harnessing the opportunities and the broader economic benefits – not standing in the way of innovation and development."
The ASIC chief also offered details on some of the actions the Australian securities regulator has taken in response, including surveillance of firms and products released in the market and the development of methods for bringing forward enforcement actions in cases that involve blockchain data.
"We are working to understand how enforcement action can be taken where a transaction entered into here or overseas is recorded in the blockchain," he said.
Ultimately, Medcroft noted, regulators need strike the right kind of balance, concluding:
"We want to help industry to take advantage of the opportunities on offer, whether it is from blockchain technology, or other innovations – but not at any price."
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