Governments in competition for blockchain startups
While the crypto currency sea is calm, with the significant exceptions of China and Indonesia, regulation is a question that will keep reapearing until it is solved.
While the ECB is waiting for the field to mature, other countries and territories are competing to offer the best conditions to the startups of the blockchain ecosystem. Singapore has grown as a major early leader, as has Japan and, until its recent partial ICO ban, South Korea.
Some countries are taking opposing views. Having signed memorandum of understanding the the Singaporean Monetary Authority early this year and attracted several Singaporean fintech startups to establish their EU HQ there, Lithuania has however chosen to repel blockchain startups while simultanoeusly attracting them via conferences and multiple ICO endorsements from political figures. This is a strange situation since Lithuania has taken a very light-touch (or, should we say, 0 regulation) approach towards payday loans and P2P lending, clearly partly due political connections of the players involved in the field. Conversely, Estonia has yet again managed to brand itself as a fintech powerhouse while boasting as few large successes as its small size would suggest.
Switzerland has positioned itself as an early and sizeable leader, yet the relatively advanced age of the players and the conservativeness of the country might not be to everyone’s taste. While it might be easy to meet local financial regulators in Switzerland for a chat, I would imagine their interest will lie primarily in protecting the established players in the field from competition while simultaenously helping them upgrade to blockchain. Of course blockchain startups are too early-stage to pose any real competitive threats at this time.
British overseas territories such as British Virgin Island, Jersey and Gibraltar have jumped on the blockchain bandwagon. However, tax heavens have come under attack lately (Switzerland included). We wonder whether their eagerness towards blockchain is good for the industry or not. Even if successful, probably their impact would be relatively small — all of them are simply incorporation bases lacking tech ecosystems where few would want to live permanently.
For USA, blockchain ecosystem is not such a disruptive effect as in ecosystems that have been starved for venture capital for decades, such as eastern Europe or Asia. New York and SEC have a lot of regulation. Our founder, having been accepted to an International Innovators program by NYCEDC, is having a tough time thinking how to combine the energy of America and New York with a globally based team that could not freely operate (and happily pay taxes) in many parts of America with the current legislation in place.