Lack of Understanding and Legal Frameworks Are Main Impediments to Blockchain Adoption

NEW YORK, Jan. 25, 2018 -- A survey of C-level corporate executives conducted by RANE found that many lack a clear understanding of the technology or benefits of blockchain, a distributed ledger that can permanently record transactions between two parties. This lack of understanding, combined with concerns over a lack of clear regulatory guidelines, could potentially hinder more widespread adoption of blockchain technology.

The survey was crafted in coordination with the Center on Sanctions and Illicit Finance (CSIF) at the Foundation for Defense of Democracies (FDD) following the publication of a memo, “Leveraging Blockchain Technology to Protect the National Security Industrial Base from Supply Chain Attacks,” written by Drs. Samantha Ravich and Michael Hsieh as part of FDD’s Cyber-Enabled Economic Warfare project.

The RANE survey of Chief Compliance Officers, General Counsels, CFOs, CISOs, and CIOs across the financial services, consulting, healthcare, technology, manufacturing, legal, industrial, and security industries, found that over 60% of respondents have not yet adopted blockchain. Other highlights of the survey include the following:

• Of those who have not adopted the technology, roughly 40% said either they don’t understand the technology, or don’t see how it could be useful for their company.
• 23% of respondents cited a concern over lack of clear legal and policy frameworks governing blockchain applications, including half of those firms currently in the process of incorporating the technology, who say they still require additional understanding of security controls and protections before finalizing the implementation.
• Of those who responded that unclear legal and policy frameworks were the main impediments to blockchain adoption, 83% were from the financial services industry.

FinCen issued broad guidance in 2013 requiring cryptocurrency exchanges to follow the same regulations as money service businesses.

According to Yaya Fanusie, director of analysis at CSIF and an expert in the RANE Network, most financial authorities are being careful to not prematurely over-regulate the blockchain space. This hesitation to create more precise guidelines for the technology’s evolving applications has left firms wondering how to navigate the regulatory uncertainty. It is unclear how nascent blockchain technologies may fall under established regulatory mandates such as Dodd-Frank, FINRA, SEC regulations, and the “right to be forgotten” under EU’s General Data Protection Regulation (GDPR).

The survey was conducted in October, 2017.

About FDD’s CSIF

FDD's Center on Sanctions and Illicit Finance (CSIF) expands upon FDD's success on the use of financial and economic measures in national security. CSIF provides critical research, policy, and subject matter expertise in the field of national economic security and the critical intersection between illicit finance and national security, including money laundering, terrorist financing, sanctions evasion, proliferation financing, cyber crime and economic espionage, and corruption and kleptocracy. This includes understanding how America can best use and preserve its financial and economic power to promote its interests and the integrity of the financial system while examining how America's adversaries may be leveraging economic tools and power. Learn more at www.defenddemocracy.org/csif. 

About RANE

RANE (Risk Assistance Network + Exchange) is an information and advisory services company that connects business leaders to critical risk insights and expertise, enabling risk and security professionals to more efficiently address their most pressing challenges and drive better risk management outcomes. RANE members receive exclusive access to a global network of credentialed risk experts, community-enabled network intelligence and proprietary content, and a range of support services and risk management programs. Learn more at www.ranenetwork.com.

Contact:
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