Page 56 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Use of functional approach to implement laws and regulations
Working Group Technology, Innovation and Competition

Workstream Distributed Ledger Technology
Audience for recommendation Regulators in DFS

Any changes to laws and regulations across multiple sectors should use a functional approach to ensure that
there are no technology-specific constraints to implementation of new technologies.

Often regulations are technology-specific, be they for various payment instruments or automation. This silo’d
regulatory approach and associated laws and regulation is challenged in this multi-sectoral environment.

Distributed Ledger Technologies may expand this universe of potential regulators by linking multiple sectors
and requiring regulatory coordination. This has been evident in multi-regulator approaches to the emergence
of the Bitcoin DLT.

In anticipation of the emergence of DLTs in their market at scale, regulators and legislators should plan for using
a functional - rather than an institutional or technology-specific - approach to regulation and amendments to
existing legislation.

This would avoid situations of institutional- and technology-specific laws and regulations that could potentially
constrain innovation and implementation of new technologies.

50