Regulating crypto firms: 'It's important that policymakers are involved,' says Web3 Foundation COO

Bertrand Perez, chief operations officer of the Web3 Foundation, one of the firms behind the Polkadot blockchain, said a certain level of regulation was necessary in the crypto space as long as those responsible left room for innovation.

Speaking to Cointelegraph at the Paris Blockchain Week on Wednesday, Perez said he saw a few areas of concern when it comes to regulating the space, including a recent draft bill from the European Parliament on non-custodial wallets but overall, those in the industry are trying to help policymakers to understand Web3. According to the Web3 Foundation chief operations officer, some lawmakers are still making decisions “too fast or without having education” on the space. However, the Facebook-backed Libra project in 2019 may have been the catalyst many in the EU needed to understand the urgency to move forward with a regulatory framework.

“We need to be aware that we need to evolve in a world where regulation is not necessarily bad,” said Perez. “You need certain level of regulation for protection, right? The key point is where you draw the line and we try to help drawing the line in a place that makes sense for the regulators so there are enough frameworks and protections from their perspective while leaving innovation growth.”

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The Web3 Foundation COO added that the narrative around crypto used for illicit activities was one of the major problems influencing lawmakers. Once that was debunked, according to Perez, regulators could “start talking digging more into the technology” and address different features and applications in a framework:

“I think it's important that policymakers are involved. Not only regulators because policymakers are really the representative of the people [...] I would tell them that we are here facing a real paradigm shift in terms of technology, we're maybe in front of something bigger than the internet and the value that that can generate is at least the value of Internet.”

Related: What the hell is Web3 anyway?

Perez, a former senior director at PayPal, was the director-general of the Libra Association — later rebranded to Diem — before joining the Web3 Foundation in September 2021. Ethereum co-founder and Polkadot and Kusama creator Gavin Wood, who coined the term Web3 in 2004, heads the foundation and claimed to have been developing blockchain bridges and additional parachains for the project.