Regulatory Power Struggles Redraw Global Map for Blockchain Development
Industry leaders warn that regulatory divergence between major jurisdictions will determine where blockchain innovation, investment, and institutional adoption ultimately take root
The push to redefine technology governance and financial oversight is accelerating as blockchain shifts from a niche experiment into a strategic economic infrastructure. While policymakers struggle to keep pace, builders argue the real catalyst is not innovation itself, but the regulatory vacuums—and overreaches—shaping adoption worldwide.
In this emerging environment, technology leaders warn that compliance frameworks are no longer passive guardrails but active determinants of which countries will attract investment, talent, and next-generation financial platforms. They caution that the divergence between permissive, innovation-driven jurisdictions and overregulated markets is becoming a defining global fault line.
“Regulation on its own is harmful,” said Arthur Breitman, co-founder of Tezos, a blockchain platform launched in 2014 that enables on‑chain governance and upgrades. “This entire industry has existed because regulation is bad. A lot of financial regulation is predicated on controlling intermediaries, and once you remove intermediaries, the technology becomes less subject to those constraints.”
Vugar Usi Zade, Chief Operating Officer of Bitget, a global digital asset exchange serving more than 120 million users, argued that clarity—not constraint—is what drives meaningful adoption.
He warned that excessive legal overhead stifles builders, noting he would “rather hire three developers than three lawyers,” highlighting how compliance burdens can slow innovation.
Regulatory Shifts
During a panel moderated by Laura Estefania, Chief Executive Officer of Conquista, at the London Blockchain Conference on October 22, speakers discussed emerging regulatory pressures.
The session, titled “TradFi 2.0: Building Blockchain Rails,” examined how traditional finance—often referred to as TradFi, the long‑established banking and capital‑markets system—is being reshaped by regulatory change.
Estefania guided the discussion toward regulatory inflection points, and speakers emphasized that the most dramatic transformation is occurring in the United States. Breitman described an aggressive phase in which regulators attempted to bring the industry to a halt.
“Several branches of the US government have tried really hard to shut down the entire crypto industry,” he said. “They lost against Ripple, they lost against companies, they lost a bunch of cases. It was predicated on really bad legal theory.”
Nakul Chandraraju, Vice President, Business of Corporate Development at MNEE, a technology company focused on stablecoin infrastructure and payments, said the reversal reflects a structural shift. He noted that the renewed environment provides entrepreneurs with room to grow.
“For the first time ever, there’s actually an attempt at providing clarity and a framework to operate within,” he said. “What you’re going to see now is this rush towards partnerships.”
Industry participants said the renewed openness is also driving a realignment of partnerships. Chandraraju explained that the US market is moving toward cooperative models, noting that “no one company can provide all of your solutions,” and that the environment now encourages collaboration between legacy institutions and digital‑native firms.
This shift sets the stage for a broader comparison of how different regions are responding to the same technological pressures.
Speakers also contrasted the approaches taken across major jurisdictions, noting differences between regions that encourage experimentation and those that prioritise strict compliance.
Breitman said this global divergence stems from deeper structural choices. He argued in reported speech that technology sectors tend to advance fastest when rules are technologically neutral, warning that countries risk falling behind if oversight preserves legacy intermediaries. He pointed to recent US policy reversals as evidence that jurisdictions can adjust when regulation inhibits innovation.
Decentralisation vs. Institutional Control
A parallel debate is taking shape over the long‑term trajectory of financial infrastructure.
Lasha Antadze, founder of Rarilabs, a company building cryptographic access‑management systems for digital assets, grounded his concerns in what he described as a structural risk.
“My fear is that stable coins and the rails that we’re all now discussing will be abstracted by the same institutions, and that will bring in adoption as quickly as we might have ever seen,” he said.
He warned that if this happened, users would experience blockchain through interfaces that look indistinguishable from today’s banking apps.
“All you’re going to interact with is the same app,” he said, explaining that users would not realise a blockchain system was operating underneath. In that scenario, he warned, “the beauty of this cryptographic key management” would be lost. “I don’t want that reality to happen.”
Breitman added that the most defensible blockchain use cases remain those tied to core protections.
“Think of escaping a war zone with people trying to pat you down,” he said, explaining that the ability to carry one’s assets securely—such as by memorizing a recovery phrase—cannot be replicated by traditional systems.
As the sector navigates these competing pressures, developers and policymakers face a defining question: whether blockchain’s next decade will be shaped by decentralised networks or recast through centralised institutions leveraging the technology for their own efficiencies.
Future Governance Outlook
Looking ahead, many speakers argued that future governance models will depend on how effectively technology preserves user agency while still delivering institutional‑grade reliability.
Antadze said the challenge is ensuring that “we never compromise at any level” on the principles of cryptographic ownership, even as applications become more streamlined.
He warned that the industry risks reducing decentralisation to a “hidden backend” if applications are designed to mask the underlying cryptographic controls from users.
Other participants noted that consumer expectations will also shape the next wave of governance decisions. Chandraraju emphasized that consumers are not buying technology—they are buying outcomes.
“People want something they can put in front of their customers with as little friction as possible,” he said, arguing that adoption depends on clear value, not technical detail. This shift could create pressure on policymakers to strengthen interoperability and reduce regulatory fragmentation.
Breitman suggested that the most consequential changes will come from treating blockchain as a commodified backend rather than a consumer‑facing brand. He argued that as transactions become faster and cheaper, builders may apply the technology to “gaming, web applications, or anywhere a ledger is useful,” broadening its reach while reducing visibility.