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Journal Article

Blockchains: Regulating the Unknown


Finck,  Michele
MPI for Innovation and Competition, Max Planck Society;

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Finck, M. (2018). Blockchains: Regulating the Unknown. German Law Journal, 19(4), 665-691.

Cite as: https://hdl.handle.net/11858/00-001M-0000-002E-3258-3
This Article, which takes into account developments up until summer 2017, evaluates the
early days of regulatory engagement with blockchain technology. My analysis unfolds in
three parts. First, I provide a cursory overview of the technology itself to highlight
considerable uncertainties concerning its future. Regulators asked to engage with
distributed ledgers are thus compelled to regulate the unknown. Second, I will introduce a
typology of regulatory strategies adopted to date and highlight their respective advantages
and shortcomings. Third, I will outline a number of guiding principles regulators should
follow in respect of blockchain technology. I will make the argument that despite the
technology's uncertain future, early regulatory engagement is warranted as a young
technology is a malleable technology. As technology develops, law has to adapt. As a
consequence, I put forward a number of regulatory techniques, including a process of
polycentric co-regulation that relies on the regulatory potential of (blockchain) software and
the adoption of a so-called "2 8th regime" at the EU level which may help navigate the
uncertainties of blockchain development and regulation.