AML Expert Juan LIanos: Either an Industry Regulates Itself, or It Gets Regulated
"In any industry, either it regulates itself, or it gets regulated externally. It's a choice," Juan Llanos, RegTech and Anti-Money Laundering expert says.
By: HODL Finance
The product must be accompanied with an education of the consumer about why the new product or service is better or how it compares to alternatives.
Embodying the spirit of the regulation
"If you are a serious, responsible, innovator, you have to implement basic safeguards for consumers and comply with, at a minimum, the basic regulations. At the same time, you definitely have to start working heavily on influencing the redesign of regulation for the new technology,"
According to Mr. Llanos, "You launch a product, even if there's no regulation, you need to embody the spirit of the regulation, by being transparent with consumers, respectful of their privacy, protective of their money. You execute fast, you have a consumer support function, responding to requests, you build an infrastructure of service, even if there is no regulation."
"Regulation is actually a combination of three elements - the actual designing and communicating of the policy, the oversight of the execution of the policy, and then the enforcement. When something goes wrong, what happens? How do we execute the rules that are embedded in the policy?", Mr. Llanos adds.
This is the so-called "RegTech" - Regulatory Technology. It means "how can we apply technology to communicate policy, execute oversight and enforce that policy?" It's about automation of rules and processes so that regulation becomes more efficient.
"RegTech is about endogenous regulation, which means how an industry adapts or incorporates technology to regulate itself from inside, by self-applying and self-enforcing regulations"
The dilemma of globally operating businesses in the crypto economy and beyond is country-specific regulation. Mr. Llanos gives aviation standards as an example: "It's the perfect example of a harmonized body of law and regulation, adopted all over the world." The same approach could be applied in other areas and that would open up new opportunities for businesses.