The former head of policy for the development of the crypto currency exchange Coinbase and partner of Klein Berkman Center at Harvard University, John Collins, believes that crypto-startups has grown beyond the sandbox, and it’s time to create the greenhouse.
Startups have grown out of their sandbox
Collins notes that regulatory “sandbox” for innovation in financial services has been very helpful, especially in the lack of action from the state they should be installed.
But not all officials supported the establishment of a favourable environment for nascent kriptonyte. In a recent speech, Maria Vullo, head of the Department of financial services new York, touching upon various topics related to the landscape of financial services noted that the use of financial technologies provides companies with the right to exemption from regulatory norms, as the government has to manage risk and protect consumers. In relation to the regulatory sandbox, she spoke very sharply:
“Sandbox is a game for kids. Adults have to play by the rules, and if you are doing banking, this means that you should be regulated to protect customers.”
However, it is impossible to come up with the same regulatory standards to activities of large banks and conventional mobile apps created for photo sharing on the network. Perhaps the term “sandbox” is not too good and allows some officials to hint at the futility of kriptonyte, but the rapid development fintehnology evidence of the seriousness of the innovation.
It’s time to build a “greenhouse” for start-UPS
According to Collins, many statements about creating a sandbox is not talking about the lack of serious attention that is needed to discuss the terms fintehnology. However, it is time to create special conditions, a kind of “greenhouses”, where innovative solutions in the field of financial technologies will be safe to sow, grow and control. Those that will have big growth potential, can be moved into the real world. Those who fail will be replaced with new seed. Weeds have weed.
Collins argues that the testing stage, in fact, just necessary for the development of good technology. The rejection of this stage hampers the development of the innovation, increases the probability of creating a lack of quality projects and encourages innovators to the grey area where there is no any transparency, including for the regulator.
The latter, instead of prohibitions, you must create a model whereby businesses will be given the opportunity to work provided further validation of the prospectivity of the project and greenhouse conditions will allow to consider the decision in real time.
“First and foremost, you need to create a constructive dialogue between regulators and the Finance industry, forcing the government to reduce the pressure on startups, but to establish norms of control that users lost their precious investment dollars. Regardless of where it takes place, in the greenhouse or the sandbox, one thing remains clear – we do not avoid innovation,” says Collins.
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