December 13, 2016
From Fin Ops Report

by Chris Kentouris

Can smart contracts be made smart enough to be accurate, ensure the right balance between confidentiality and transparency, and reach widespread acceptance?

Yes, but not without a lot more work. That is the consensus of a group of blockchain developers, advocates and analysts that spoke and attended a recent event held by the Wall Street Blockchain Alliance (WSBA) at New York Law School in New York. For all the talk of proof of concepts and pilot programs, the use of smart contracts on blockchain technology is still limited to a handful of financial applications. C-level executives apparently haven’t been sold on its merits and are worried about moving beyond the development stage.

However, even fixing practical obstacles won’t ensure that C-level management will be willing to make the investment. One common hesitancy — the lack of explicit regulatory guidance — shouldn’t exist at all. “The fact that the contract is written in code doesn’t require any new rules. It is the function for which the contract is used which determines the applicable regulations,” explains Richard Levin, director of the Financial Technology practice at the law firm of Polsinelli in Denver. “That could be registration as a broker-dealer, exchange or investment adviser with the Securities and Exchange Commission. Likewise the Commodities Futures Trading Commission could require registration as a dealer or exchange.” Of course, when in doubt, Levin recommends asking for a no-action or interpretative letter as a precautionary measure.

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