One major challenge that has troubled the entire blockchain ecosystem is the absence of regulations. The architecture on which this technology and its products are built is decentralized.
If decentralized, then control is barely in place as prices, worth and value of assets are so volatile making people gain and lose money easily. And in some cases, when there is a massive loss, no one can be held responsible.
In the Nigerian Blockchain space, SiBAN was created in 2020 as a primary stakeholder organization to help drive the regulation of the blockchain industry. The President, Senator spoke about the evolution of tech globally and how it has changed how we do business and interact with people. He narrowed it down to the present revolution – blockchain technology.
Senator opined that thanks to blockchain, decentralization is bringing new and exciting utilities for investors, innovators are having fun, and “regulators are in a gruesome situation because things are not in their control anymore.”
The move from centralization to decentralization has changed a lot of things bringing with it risks and opportunities. For the losses, both “consumers and investors are losing money,” the speaker reiterated.
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The Case of Luna and Celsius
Luna and Celsius‘s crashes are an example of the losses that have happened in the blockchain space and one reason for this loss is the lack of adequate regulations to control the activities of these organizations.
For the Luna crash, there have been national legal actions carried out against the team members behind the project. The US, as well as South Korea, are two nations that are carrying out investigations on the Luna project.
These two crashes caused FUD (Fear Uncertainty and Doubt) in the global economic space, explained the President of SiBAN. But then, should we wait for the government to regulate the industry to reduce the recurrence of such dilemmas?
Blockchain Regulation: Why and How?
For the speaker, the reasons why there is a need for regulation are to foster integrity in the blockchain and crypto space, provide regulations where there are none, and be responsive to changing market dynamics.
On the modus of operating these regulations, he said that we don’t have to wait for the government to do it for us. We have to self-regulate. “The idea of self-regulation is to preserve market integrity, protect regulators as well as ensure that you have a fair, transparent, and efficient market,” says Senator.
This has made SiBAN, one of the major players in the Nigerian blockchain ecosystem, create a code of conduct that other stakeholders can use to carry out activities related to blockchain.