Crypto Discussions at Highest Level: The OECD's Love of Blockchain Obscures Its Fear of Bitcoin

On Sept. 4 and 5, it held its first-ever Blockchain Policy Forum in Paris, where a range of public officials and private leaders came together to meet, to network and, most importantly, to explore just how blockchain technology is being and will be used by businesses and governments.

The OECD's first foray into reports and policy recommendations regarding blockchain came with its June 2014 working paper, "The Bitcoin Question: Currency Versus Trust-Less Transfer Technology." Like many traditional institutions that represent the mainstream global economy, the general position expressed by the report's author was that Bitcoin is "Volatile" and has "An important scalability problem," and that "a raison d'être for Bitcoins is to carry out illegal activities."

"The most prominent example of a blockchain thus far is Bitcoin. Bitcoin is a non-permissioned or public blockchain, meaning that there is no restriction on who can spend Bitcoin or take part in verifying the authenticity of blocks of transactions in the blockchain."

"The potential transparency offered by a market-wide blockchain might also help firms in oligopolistic markets to coordinate tacitly without any direct or indirect contact, or any agreement to do so. Might full access to observe a market-wide blockchain constitute a 'plus-factor' that competition authorities might consider to suggest that parallel conduct was the result of coordination among the parties?".

The paper also placed specific attention on the use of blockchain to facilitate anti-competitive behavior, on monopolies in the cryptocurrency industry - e.g., mining companies, crypto exchanges - on setting technical standards, and on ensuring competitive neutrality in the face of subsidies for blockchain adoption.

Titled, "The OECD and the Blockchain Revolution," it urged policymakers to be "Proactive and forward-looking" in how they treat blockchain from a regulatory standpoint, and to work closely with "Key stakeholders" - i.e., people and groups within the industry - on drafting appropriate standards and laws.

On Sept. 4 and 5, it held its inaugural Blockchain Policy Forum - which, as the name suggests, had the aim of discussing the best practices and constructive policies related to the use of DLTs. Accordingly, it kicked off with a 'high-level' talk on how blockchain tech can be harnessed to produce 'better policies,' with OECD Secretary General Angel Gurri?a providing the opening remarks, in which he stressed the need for international cooperation and alignment on how blockchain technologies are developed, used and regulated.

"So there are technical differences, but in general parlance, we generally talk about the blockchain industry as a blanket term that includes distributed ledgers. Blockchains are a subset of distributed ledgers, the key difference being, instead of updating the decentralized ledger transaction by transaction, they do it almost in a batch process [] When people talk about blockchain or they talk about DLT, they really do so, at least in a general business purposes, as [two things] that are synonymous."

Even though the first-ever Blockchain Policy Forum didn't produce any concrete guidelines or proposals on how businesses, institutions and nations should work with DLT, the fact that it has taken place is an important step for blockchain technology.

With the idea and practice of blockchain spreading, the prospect of positive standards being introduced by the OECD and other governmental - or intergovernmental - organizations moves closer, as does that of increasing blockchain adoption more broadly.