Early regulations of distributed Ledger technology/blockchain providers: A comparative case study

Abstract

Distributed Ledger Technologies (DLTs) such as Blockchain have been heralded for their potential to fundamentally disrupt traditional industries and longstanding practices in private and public businesses. In the financial sectors, for example, quite a number of novel financial technology (FinTech) services based on DLT/Blockchain have been introduced with cryptocurrencies representing prominent cases. While the already highly regulated financial sectors have emerged as early targets for DLT/Blockchain induced disruption, a diverse set of other areas, such as healthcare record keeping, insurance record keeping, industrial and retail supply chain management, property registries, citizen identification systems, and voting systems to name a few, has also come into the focus of DLT/Blockchain innovation. These new types of services might be in need of both complementary and novel regulations for DLT/Blockchain-based services. Interestingly, smaller jurisdictions such as Gibraltar, Malta, and Liechtenstein were among the first to provide advice and regulation for DLT/Blockchain service provisions. The study compares these early regulatory approaches to each other and discusses the prospects of DLT/Blockchain service regulation based on the study's findings. DLT/Blockchain service regulation appears to incorporate predominantly principle-based rather than rule-based regulations, which makes the regulation enforcement a uniquely individual case-based task.