This week, NEM (XEM) has hit the headlines for its collaboration with ripple, Fetch.AI, and Cardano. The four are looking to create an organization that will help the EU craft the right regulations, in order for the bloc to tap into the full benefits of blockchain technology. This is a big deal and may be the biggest crypto news of 2018.
So, why is this move so important? Well, all through 2018, crypto investors have been frustrated by the declining prices. Prices have taken a major hit despite the fact that, most cryptos have made so much progress in terms of technical development. It is getting clearer by the day that just announcing how scalable, or fast a blockchain is no longer cuts it to excite the market.
The reason for this is simple, adoption is not happening fast enough. Most of the partnerships that blockchain projects have made so far are low level, in spiteof the promising nature of this technology. The reason behind this is the lackof a clear regulatory framework governing this tech. Most major corporationsthat may have an impact on blockchain adoption operate under very strictregulatory environments. This restricts them from going all out in adoptingthis tech.
In essence, the move by NEM, Ripple, and Cardano to form a body that proactively drives the EU blockchain regulatory environment is a smart one. That’s because through this organization, it will be easier for EU policymakers to have a better understanding of blockchain tech, and by extension make laws and regulations that a positive impact on the growth of this tech. With the right regulations, it would be easier for major European companies to adopt blockchain technology in different aspects of their operations.
This is a move that has implications beyond competition between blockchain projects. If the right regulations are in place, all good projects will win. For instance, ripple has been making major in-roads in the banking industry. However, this doesn’t take away the chances of other blockchains winning in this market. A clear example of this being the recent interest in NEM by the national bank of Ukraine.
What’s most interesting is that this move by Nem, Ripple, and Cardano to focus on the EU could have a ripple effect on the rest of the world. That’s because, the EU is one of the most important socio-economic blocs in the world. As such, if through the efforts of these four blockchain projects, the EU adopts the right regulations, other regions of the world would possibly follow. For instance, if EU banks, thanks to proper regulations, were to adopt blockchain at scale, other regions would be under competitive pressure to follow suit. This would mark the beginning of the global regulatory framework that Brad Garlinghouse touched on during last month’s FinTech conference in Singapore.
Clearly, the pivot towards cooperation towards a better regulatory environment is the most strategic move that NEM, Ripple, and Cardano have made this year. This will foster adoption faster than any of the technical advancements they have made this year.