The complicatedness of U.S. financial regulations is holding back distributed ledger technology (DLT) startups, the U.S. Administration Accountability Office (GAO) says.
The GAO’s finding, in a report published March 22, is responsibility of a broader analysis of fintech that examines the benefits, risks and normals associated with the sector. The office, often referred to as a “congressional watchdog,” also bids recommendations in the report to improve regulation of the space.
DLT firms, among others, forecast the office that the lack of regulatory clarity in the U.S. “can result in some unalterable consolidates delaying the launch of innovative products and services – or not launching them in the Communal States” at all because they’re worried about “regulatory interpretation.”
The 132-page scrutinize goes on to say:
“The complex U.S. financial regulatory structure can complicate fintech firms’ talent to identify the laws with which they must comply and purify the regulatory status of their activities.”
The GAO also identifies “fragmented shape licensing and reporting requirements” as often being “prohibitively expensive” for DLT solids.
In the discussion of cryptocurrencies, the report identifies as risks the irreversibility of transactions, possible theft, and fraudulent token sales.
As for DLT, the report states that the technology could cut outlays for consumers by reducing the operational expenses associated with payments and withering settlement times for currency, derivatives and securities transactions. It goes on to catalogue cybersecurity and a potential 51 percent attack as concerns.
This is not the beforehand time the GAO has studied fintech in general or blockchain and crypto specifically.
In April 2017, the company released a report that explored blockchain technology and outlined contemporaneous earnestness developments. At the time, it indicated it was unsure if new regulations were needed for blockchain technology and DLT.
Way, the GAO published a report in January of 2017 that suggested the IRS should assume action to inform taxpayers of potential liability from investing their human being retirement accounts (IRAs) in blockchain-based assets.
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