The regulated blockchain would enable faster adoption of cryptocurrency like bitcoin that would revolutionise the financial services.

Few years back, Bitcoin, the first cryptocurrency created a spark of controversy and sensation over the news. The governments in many countries were against its use, some even claiming it as the biggest scam in the history of finance. Many have feared its use as a threat of terrorism, money laundering, or increased illicit activities.  But despite the criticism, Bitcoin has gained much popularity over the years.

The cryptocurrency is a form of digital payments which are usually, secured by cryptography and are based on Blockchain networks.

Understanding Blockchain

A blockchain contains blocks, which is governed by digital information and usually run by a series of computer systems. Blockchain network stores information about the transaction by a customer like date, time and the amount spent on the recent purchase. Instead of using the name for recording the name of the customer, it uses digital signature for storing the information about the participants of transactions. It uses a unique code, known as ‘hash’, which is created by using different algorithms, for storing information amongst different blocks.

Unlike in the banking system, the blockchain is decentralised and is not authorized by banking system. It is public and users can add the blocks added with the help of a computer network, mobile app or software.

Today the application of Blockchain has been widely popularised in the field of medical industry, engineering, and financial industry. A global blockchain PwC survey states that 84% of respondents are actively involved in blockchain and 30% of the respondents see china as the blockchain leader. Today there are almost 2,500 crytocurrencies with more than $252.5 trillion trading in the market.

However, as the blocks are usually added in a chronological manner at the end of the chain, and is not private, one of the major concerns with the use of unregulated blockchain network is the absence of security. The PwC survey regarding Blockchain cites that 46% of the respondents fear that lack of trust would lead into delay of adoption.

With the help of a regulated network, the issue of the absence of security can be rectified.

Regulated Blockchain Network

A regulated blockchain network would enable the government for winning the voter trust, saving money, businesses to minimize fine and reducing operating costs. A forecast by Gartner states that blockchain will generate an annual business value will grow to US$176 billion by 2025 and to more than US$3 trillion by 2030.

One of the major applications of the regulated blockchain network is while using digital currency. The PwC survey has seen Blockchain to be the emerging industry for blockchain application. As the demand of digital currency or cryptocurrency has been emerging in the markets globally, with giants like J P Morgan and Facebook introducing its own cryptocurrency Libra and Calibra, it is very much evident that regulated blockchain would be responsible for regulating cryptocurrencies.

Despite the ban by China, Russia and Colombia over cryptocurrencies, People’s Bank of China (PBOC) has deployed this technology into branches of its four cities. Welcoming the blockchain technology, the European Union has signed a legislation, “5^th Anti-Money Laundering Directive Law” into law on January 2020, thus making crypto-currencies and crypto services under regulations for fighting terrorism and money laundering.

With the help of regulating blockchain, the negative impact over the investors, industries and markets, which most often due to bad government decisions and media, would be diminished. It would also reduce the environmental impact because of the paper.

Thus, if properly regulated, the blockchain network would be adopted in a much faster rate by the governments around the viable, Its application would enable to reduce operating costs and invest on things and areas that would need necessary attention.