The Blockchain Revolution’s Impact On Financial Regulation


Financial regulation is a form of supervision, which subjects financial institutions to certain requirements, restrictions and guidelines. Aiming to maintain the integrity of the financial system, this may be handled by either a government or non-government organisation.  

Financial regulation has also influenced the structure of banking sectors by increasing the variety of financial products available. Financial regulation forms one of three legal categories which constitutes the content of financial law, the other two being market practices, case law. 

Although with the newest asset class taking the investment world by storm is cryptocurrencies, a digital coin that runs on a blockchain and a lack of regulation is its biggest appeal. This is because it’s being accounted for and traded on the internet through a system known as Blockchain where geographical or political borders aren’t a factor. And transactions might be sent from any place and received at any point in the world. 

Where they can be exchanged at ever lower cost, even though nominal transaction processing fees may be incurred; however the net fees are significantly less than the conventional method of regulated banking. 

Using cryptocurrency and Blockchain, you can enjoy all the benefits of transparency, security and no permission of any third party. This is because of its decentralised system that it uses, which doesn’t rely on a third party service to hold the customer’s funds. Instead, trades occur directly between users (peer to peer) network through an automated process.  

With Blockchain by allowing digital information to be distributed but not copied, it allows for far more privacy. As information doesn’t have to go through one point and can instead pass through a variety of points. And it’s much more difficult to track information across the network. You’re therefore easily able to protect your identity or online information. 

Whereas with digital currency in a centralised system it’s more regulation base as a lot of confidential information about users is kept in centralised networks. This data may get lost, hacked or be transferred to law enforcement agencies at court request.  

Since cryptocurrency is not bound by the exchange rates, interest rates, transactions charges or other charges of any country; like the traditional currency. Cryptocurrency operates at the universal level and hence makes transactions quite easy. Those are just some of blockchain impact on financial regulation.  


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