Jack Ma says Europe is too worried about tech and has created excessive regulations. While that might be true in some areas, blockchain businesses often face the opposite challenge.
Chinese e-commerce giant Alibaba has launched its next blockchain project. This time, the company wants to build a blockchain-based intellectual property system for global enterprises and brands. It’s not the first time Alibaba is venturing into blockchain. Earlier this year, its financial arm Ant Financial Services has set up two blockchain subsidiaries.
While the war for technological leadership between the US and China has recently gone into the next round with 5G, blockchain might be the reason for the next fight. And what happens in Europe? Not much, if you ask Alibaba founder Jack Ma.
Ma says Europe is obsessed with tech regulations. He believes the challenging regulatory environment is the reason why Europe has not produced any massive tech firms the same way that China and the U.S. have. Which it hasn’t: Amazon could soon be worth more than the entire DAX 30 combined. And regulations might be part of the problem.
Regulations: A balance between too much and too little
According to Ma’s opinion, Europe has created regulations that are too tight for tech companies to innovate. At the Viva Tech conference in Paris, he said: “Everything they do is full of rules and laws. And everything they think about, they start to worry. When they worry, they make rules and laws.”
Ma is right with what he says, but he is also wrong. In certain areas, European regulations are way more complex than needed. Businesses complain about the stringent data laws ensuring consumers’ right to privacy. The newly published guidelines aimed at maintaining ethics in artificial intelligence have also not been warmly welcomed by everyone.
However, concerning blockchain technology, businesses ask for more regulation, not less. While many other tech sectors seem overregulated, European lawmakers have so far been slow when regulating blockchain technology.
Lack of regulation can create an abundance of problems. Investors don’t participate because they are unsure about the long-term prospects, companies hesitate to innovate if they don’t know whether or not they can bring their solutions to the market, and in many parts of Europe, blockchain businesses can’t even open a bank account.
Thus, Ma seems to be oversimplifying the challenge. Yes, too much regulation creates unnecessary burdens for startups and hinders innovation, and that happens in Europe in many areas. But lack of regulation can create a legal limbo that leads to hesitation and uncertainty.
China is no role model; Liechtenstein’s blockchain act aims at the right balance
Ma points to Chinese entrepreneurs and says Chinese businesses “start to solve the problems, then think about rules and laws.” He added, “I worry about the worries of Europe. Africa does not worry. Asia does not worry. What are they worried about?”
With that said, China is not exactly a Mecca for tech entrepreneurs either. The government has banned the use of cryptocurrencies and closely supervises all sorts of corporate activity.
So finding the right balance between too much and too little regulations is not that easy. Liechtenstein has moved ahead with the blockchain act and tries to find that balance. Time will tell if Liechtenstein’s approach will be successful.
Ma is right in pointing out that attitude is key. “If you think the technology revolution is a problem, I’m sorry to say a problem just started,” says Ma. “If you think it’s an opportunity, the opportunity just started. The only thing is your mentality. If the mentality is now a worry, you’ll worry all the time.”