Evolving Regulatory Frameworks: Blockchain as a Form of Trust—Comparative Evidence

Firms and governments are interested in regulatory experiments in order to minimise compliance costs and improve business and regulatory efficiency. Blockchain presents many hopes for achieving the aforementioned objectives but presents many risks in the area of privacy and cyber risks. Considering its regulatory and business organisational features, it can be considered a regulatory tool that supplements, complements and substitutes law. In the area of AML, Blockchain can be employed to verify, validates and transfer information between two or more stakeholders. The aim of this chapter is to understand the organisational features of the four most prominent Blockchain networks and understand how and when firms and their associated Blockchain-based system operate. In order to do so, this chapter compares Blockchain features with national and international current regulatory frameworks for Blockchain. Results show that Blockchain does not undermine the role of the government, but it reinforces its role when the rule of law is weak or absent. Moreover, considering that technological actors can evolve into a digital sovereign, governments need to carefully assess the risks of this novel technological framework and set the right rules of the games that benefits all consumers and businesses.