Governments have nothing to fear from blockchain and should adopt the technology as a tool not a policy issue, says OECD secretary general Angel Gurria.
Speaking in Paris at a blockchain forum hosted by the Organisation of Economic Co-operation and Development, he explained that the blockchain that is the underlying technology of cryptocurrencies is really part of a wider digital revolution.
Although the blockchain is linked in most people’s minds with Bitcoin and other cryptocurrencies, governments should be thinking about using the tool to improve processes rather than a financial problem.
Governments must set up policies and consider choosing blockchain for implementing these policies, Gurria explained.
“If they want to be successful in regulating blockchain, the governments should understand what the technology does,” he said.
“Blockchain is not a policy, blockchain is not a regulation, blockchain is a tool. And the idea is to what extent can we make the tool a standard so that when it is a generally accepted standard, it can then become part of the regulatory process. This way it can become mandatory in the regulations, so it can serve the police purposes better.”
Gurria also discussed the motives of the early backers of cryptocurrency technology, who wanted governance that would bypass traditional institutions like banks, courts, or state administration by eliminating their role.
“However, many of blockchain’s current uses have also raised legal and regulatory issues that still require a ‘trusted third party’ – that is, government. In financial services and within the broader economy, governments have a clear role to play in making sure that markets are fair and orderly. They need to do this in a policy environment that also allows promising innovations to develop,” he said.
The speech is a milestone for blockchain developers as Gurria is an influential official whose organisation acts as a pathfinder for the OECD’s member states.
These include the USA, Japan, UK, European Union and South Korea.
Common policies, such as the new common reporting standard for tax data swapping between countries were instigated and developed by the OECD.
Gurria’s support for the blockchain suggests wider discussion is going on between governments regarding the technology’s uptake.