Zone is pushing for the development of a “regulated blockchain,” akin to Ethereum, with government-backed regulators in control. This initiative is designed to pair the security, transparency, and programmability of blockchain technology with the benefits of real-time, on-chain regulation. Zone’s vision is that with the advent of regulated blockchains a new era of inclusive finance will emerge. They provide an appealing third option in which financial services follow the law without even needing to try. Although Zone’s propositions depend on variables outside its control, the company is attempting to change the world financial infrastructure as a whole.
Bridging Traditional Finance and Blockchain Technology
Zone plays to serve as this interpreter between old-world finance and the new-world blockchain ecosystem that’s emerging. The firm connects banks to each other, makes trading in these assets easier and keeps track of everything simpler, too. Zone’s infrastructure creates a seamless environment for different financial entities to interact, making sure transactions are processed quickly and securely.
During a transaction, if something goes wrong or someone wants to dispute a charge, that’s where Zone becomes essential. Zone’s CEO, Obi Emetarom, elaborated that when a transaction fails, Zone assumes the risk and goes after the failed transaction to recover lost funds.
the switch has to communicate with both banks to figure out what happened. - Obi Emetarom, Zone CEO
This ability to at a moment’s notice quickly identify unexpected problems and act upon them is highly important in maintaining trust, and thus reliability, in the financial system.
Zone’s innovation has been celebrated far and wide for its quantum leap forward. Others go as far as to say that it’s the best thing to happen since the development of Nigeria Inter-Bank Settlement System (NIBSS). This comparison highlights just how big of an impact Zone’s technology can have on the financial landscape.
The Vision for a Regulated Blockchain
Zone’s vision goes beyond its present day function as a purely administrative intermediary. The company is at the forefront of developing a private and regulated version of blockchain. This new progressive approach combines the benefits of decentralized technology with important government accountability. This centralized regulated blockchain would be similar in nature to existing public platforms like Ethereum, with one key difference.
The most important difference between the two is in how regulation is integrated. Zone’s regulated blockchain also aims to establish an operating environment that guarantees financial services operate compliantly by design. This intentional approach makes compliance an early priority rather than an afterthought. Implementing this approach would fundamentally change the calculus for financial institutions. This makes it easier to align with regulatory obligations, all while taking full advantage of blockchain’s benefits.
“A regulated blockchain would be like an Ethereum where different participants would be products — whether it is a B2C payment product, lending, investment, or even insurance — and run them on this compliant environment,” - Obi Emetarom, Zone CEO
Zone’s white paper, authored by Emetarom, imagines a future where blockchain technology and proactive regulation are combined. Along the way, it focuses on both the positives and pitfalls of this new, exciting approach. By producing a more compliant ecosystem, Zone aims to encourage increased innovation, economic inclusion, consumer protection, and participation in the financial system.
Implications for Regulatory Bodies
The introduction of a regulated blockchain could have significant implications for regulatory bodies like the Securities and Exchange Commission (SEC). This kind of platform would offer a useful tool for the SEC to help enforce its rules and guidelines. By embedding regulatory requirements directly into the blockchain ledger, compliance is natively built into the solution itself.
This method can accelerate the regulatory process, thus lessening the burden of compliance on financial institutions and regulatory pressure. This is a step they can take now that will greatly increase transparency and accountability. Every transaction and action users take on the blockchain will be subject to regulatory scrutiny.
Zone’s regulated blockchain is EVM-compatible, which allows solidity smart contracts Ethereum applications to live and work on Zone as well. This backwards compatibility allows developers to easily port their current applications over to the controlled blockchain. In doing so, it helps to grow the ecosystem and ignite more innovation.
