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Recap
In our previous article ( Review of Ethereum Governance for Ethereum Blockchain Development), we discussed Ethereum governance for blockchain application development.
In this article, we learn about the effect of government regulations on Ethereum blockchain development.
Government regulations
Many observers of the cryptocurrency investment felt quite relieved after the United States Securities and Exchange Commission (SEC) issued a no-action letter on April 3, 2019, to confirm that the tokens that were issued during the startup’s Initial Coin Offerings (ICOs) are not securities. As a matter of fact, over 80% of ICOs are Ethereum backend tokens and run on the Ethereum blockchain network. Tightened government rules, policies, or regulations on ICO and cryptocurrency are always viewed as the headwind thought to pose huge challenges regarding the growth of Ethereum, blockchain, and cryptocurrency. It is always debatable. On one hand, it is an effective crowdfunding approach for startups so that they can raise funds for developing innovative products, services, and solutions. Any tight control may put a brake on the innovation and adoption in this space. On the other hand, many also welcome moderate regulations to these emerging investment instruments since it will raise the bar for ICO offering, and hence makes the Ethereum network and cryptocurrency market more robust and much healthier.
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Stablecoins, which we discussed briefly before, may provide a much different perspective than ICOs for government regulators since they design the cryptocurrency governance and regulatory framework. Nothing extraordinary has come out of this yet. However, one thing is probably true, no matter which way the wind blows: solutions in compliance with existing KYC-AML rules, policies, and regulations are always worth investing in.
Next Article
In our next article ( Review of Mainstream Adoption for Ethereum Blockchain Development), we discuss the adoption of Ethereum on the mainstream.
This article is written in collaboration with Brian Wu who is a leading author of “Learn Ethereum: Build your own decentralized applications with Ethereum and smart contracts” book. He has written 7 books on blockchain development.
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