Bringing blockchain into securities markets, Feb. 12–19

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Each Friday, Regulation Decoded delivers evaluation on the week’s crucial tales within the realms of coverage, regulation and regulation.

Editor’s word

Know-how is by and huge not the main barrier — although many within the trade have an honest little bit of hubris about it. Extra essential is that individuals, every time their cash is on the road, get mighty conservative. Which isn’t essentially grasping or unreasonable, however it’s why it was simpler for lawmakers to greenlight electronic mail than digital signatures.

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Conservatism surrounding cash additionally implies that outdated methods must fail in a fairly conspicuous trend for anybody to noticeably discuss reforming and even discarding them. Take into consideration how grotesque the subprime mortgage bubble of 2008 seemed as regulators and information shops dug by means of its wreckage in subsequent years: That’s what it took for Dodd-Frank to cross into regulation.

The entire Robinhood turbulence on the finish of final month just isn’t in the identical league. However any informal observer, uncontaminated by the MBA jargon that exists to justify such shenanigans, can have a look at the occasions surrounding GME buying and selling and know that these markets usually are not as free as we would think about. And possibly it’s for that purpose that we’ve spent a lot time speaking about it, as a result of it’s an intro to standing issues in securities buying and selling that’s attention-grabbing sufficient to show an entire technology of informal observers what short-selling is.

The factor is, the inventory market just isn’t going wherever. However everybody sees on this eye-catching disaster an event to petition for what they need. For the blockchain group, it’s been a chance to think about how one can disintermediate securities buying and selling and even facilitate same-day settlement of trades — securities tokens in different phrases. Others have, nevertheless, used it as a chance to disown traditional securities altogether. However, extra low-profile than the Robinhood affair, this week has seen various developments that deliver crypto into securities markets and securities markets onto blockchains.