Regulations will always be behind innovations - Anu Honkalinna, Fintech Finland Association
“Regulation brings clarity to the rules on how to play the game in a compliant manner,” believes Anu Honkalinna, co-founder and board member of Fintech Finland Association.
Anu Honkalinna is the expert in insurance and finance business. She will be a participant of the panel discussion “Legal and Regulatory Challenges in Blockchain and its effect on Economy” at the Blockchain & Bitcoin Conference Finland on May 25, talking about crypto environment and legal issues it faces. In the interview, Anu Honkalinna talked about Finland’s blockchain environment and regulations. She described legal challenges blockchain faces and made prospects for its future development.
Interviewer: Blockchain & Bitcoin Conference Finland (BCF)
Speaker: Anu Honkalinna, co-founder and board member of Fintech Finland Association (AH)
BCF: Hello Anu! As you are going to participate in the discussion about legal and regulatory challenges in blockchain, could you tell us what is your opinion on imposing regulations in general? Do you think there might be any positive side to that?
AH: There are many positive sides about regulation. Regulation brings clarity to the rules on how to play the game in a compliant manner. After having worked more then 15 years in finance and insurance businesses, I don’t however, believe in solving matters through excessive regulation. It is also currently more a question of how to implement already existing regulation to blockchain environment than drafting new regulation. A number of regulators across the world have also taken this approach by introducing guidelines on how to do a compliant ICO within the applicable regulation. Without having a clear guideline from the local regulators, the risks of breaching some expectations from the regulatory side will grow and consequently reduce the attractiveness of launching ICOs in countries where the regulatory environment is unclear.
BCF: Tell us about the current situation in Finland, please. How is the blockchain environment changing and where is Finland going in regard of legal regulations?
AH: We have had a number of discussions with the Bank of Finland and the Finnish FSA on what regulations would apply to blockchain environment. Finnish FSA has established a helpdesk to answer questions related to the topic. We have also had discussions with the Bank of Finland and the Finnish FSA on what should be done to clarify the legal framework and also how to attract more e.g. ICOs to Finland. Compliant blockchain business is something that every country should desire more as it generates a lot of other services and consequently innovation but also taxes. It is also interesting to see how the relatively new law on cooperatives will be implemented to ICOs as well as crowd-funding regulation as Finland is one of the countries where crowd-funding is fairly widely used to collect money for establishing businesses.
BCF: If there were no challenges to blockchain and no regulation introduced, what would be different in the level of blockchain development now?
AH: There is already existing regulation that applies to blockchain, it is just a question of understanding the requirements and interpretation of regulation in each country to a new technical environment. Regulation is usually drafted in a way that it is general in it’s scope to allow including also new innovations and technical solutions in order not to get out-of-date too soon. It is clear that due to the time required for drafting new laws, the regulation will always be behind of new innovations. It is also clear that e.g. Anti-money laundering, Know Your Customer and GDPR regulations are applicable to blockchain based businesses as well as securities law to some cases. I think that it is in everybody’s interest to get clear legal environment where the market knows what is expected by the regulator.
BCF: How much, in your opinion, is state economy influenced by the use of cryptocurrencies?
AH: State economy is not yet influenced too much by the use of cryptocurrencies and the majority that is raised in public knowledge is negative like the ponzi schemes, warnings to invest in cryptocurrencies by the central banks and so on. I believe however, that the new technology is here only to grow further. After some time, it becomes more clear what are the benefits of the various cryptocurrencies to the local and global economies and also how these will benefit economy in a longer run.
BCF: As a co-founder and board member of Fintech Finland Association, could you tell us Fintech services changed over the time association exists, please?
AH: As Fintech Finland Association is still quite young, there hasn’t been huge change during the existence of the Association, but clearly the blockchain related topics, ICOs and cryptocurrencies are raising increasing interest both at the Fintech companies, regulators, law-makers and startups. Also, the Fintech startups are increasingly going for global markets directly instead of thinking staying local.
BCF: What do you think about the Finland’s government plan to make cryptocurrency transactions crystal-clear, and stop letting bitcoin holders being anonymous? What impact on cryptocurrency environment can this decision have, in your opinion?
AH: There are a number of legal questions related to anonymous cryptocurrency transactions. Anti-money laundering, Know Your Customer and GDPR regulations have their own impacts to any transfers of monetary value as well as fighting criminal activities. Clearly this would mean a significant change to the cryptocurrency holders and how the crypto market operates currently. Depending on how the other EU regulators and also countries outside EU react, remains to be seen and have an impact to the global cryptocurrency markets.
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