Emerging Tech Regulation: Navigating the Complex Path to Innovation and Adoption

GM! This week, we want to share our thoughts on regulation & why it is an important factor in harnessing the benefits of emerging technologies such as AI & web3. 🔒💡

• ✅ Protects market integrity

• ✅ Protects consumers from harm

• ✅ Facilitates growth 📈

• ✅ Promotes competition 🤝

• ✅ Enables the path to mass adoption

How are regulators responding to emerging technologies?
🔄 It's a mixed bag. One extreme is jurisdictions imposing an outright ban on cryptocurrencies & ChatGPT, while the other extreme lacks regulation & a clear framework. Neither approach delivers positive outcomes - they either stifle innovation (ineffectively), drive a talent exodus, or create a wild west where scammers can act with impunity.

The most effective jurisdictions:

Consult with the market before setting policies & rules to understand the full context, technology, & risks

Make full use of sandboxes to explore technology in a safe environment. ⚖️ Take a proportionate approach 🚀 Adopt the technology to enhance their own effectiveness 🏢 Or even, in some cases, establish regulators tailored to address the technology involved (e.g., VARA - Dubai’s Virtual Assets Regulatory Authority) 🌐 Align with global standards as they emerge, considering many products & services generate global risks (e.g. cross-border payments)

Who or what needs to be regulated?

As it's a dynamic landscape, it's hard to know for sure. Consider the example of money & web3. Currently, the vast majority of money-related transactions or activities are regulated. Now, new forms of digitally-native money are being created (e.g. CBDCs, stablecoins, free-floating currencies such as Bitcoin, etc.), & both tangible & intangible assets are being turned into financial instruments through being tokenised.
As it's a dynamic landscape, it's hard to know for sure. Consider the example of money & web3. Currently, the vast majority of money-related transactions or activities are regulated. Now, new forms of digitally-native money are being created (e.g. CBDCs, stablecoins, free-floating currencies such as Bitcoin, etc.), & both tangible & intangible assets are being turned into financial instruments through being tokenised.

What does this all mean for growth & innovation? 🚀💡

The increased burden on regulators (the FCA already stretched supervising 50,000+ firms) will pose challenges for businesses seeking authorisation. Many businesses may unintentionally engage in regulated activities, burdened by high compliance costs & complexity. Additionally, limited access to affordable regulatory advice from legal & advisory firms further compounds the issue.
However, there is a light at the end of the tunnel. At MIN3, we see the use of AI as a major opportunity to democratise advice. Imagine a language model with a simple Ask Me Anything (AMA) function, generating accurate, up-to-date, & understandable responses with clear recommendations. And the best part? Low (or even no) fees & accessibility for all. 🌐✨
This is just the beginning of an iterative process, but we know there is real value in removing significant barriers to entry. Watch this space.