Last week, PYMNTS reported that José Manuel Campa, chair of the European Banking Authority (EBA), had voiced concerns over regulators’ inability to hire and retain the talent needed to oversee the crypto assets market.
Part of the challenge for regulators is that the knowledge and experience necessary to deal with the crypto sector are in limited supply. As the industry has accelerated at pace, demand for the limited crypto talent pool has increased.
See also: EBA Chair Says Staffing Is ‘Major Concern’ for Crypto Regulation
The industry now finds itself in a place where regulators are competing with the very organizations they seek to regulate for the best staff.
PYMNTS recently interviewed the CEO of Nigerian blockchain startup AppZone, Obi Emetarom, an entrepreneur who has experienced firsthand the difficulties in sourcing talent with the right knowledge and skills. In fact, Emetarom listed the shortage of experienced crypto professionals as the biggest challenge that AppZone faces today.
Read more: Stablecoins, CBDCs Face Big Hurdles Before Knocking Out Fiat
But Emetarom made sure to distinguish between talent and expertise. He said that “there’s raw talent everywhere, […] it’s more about refining that talent [so that it] has developed the right level of expertise to be able to support all of these innovations and execute them.”
Like many in the industry, AppZone’s approach to the challenge of hiring in the crypto space has been twofold.
On the one hand, the pan-African company has had to cast the recruitment net further afield, as Emetarom put it, “opening up the sourcing, and [going] beyond the local or regional boundaries.” On the other hand, they’ve doubled down on recruiting and training raw talent with the goal of developing the blockchain experts of tomorrow.
Challenges for the Future of EU Crypto Regulation
The EBA’s concerns over the current dearth of crypto professionals are similar to the ones faced by businesses like AppZone, but with one key difference.
Technical skill sets are relatively transnational, and this opens up the possibility of hiring remotely, a growing reality for a broad range of software companies. Legal expertise, however, tends to be focused on specific jurisdictions.
In the European context with which the EBA is concerned, European Union law makes up an entire field of legal practice, with dedicated degree programs, training schemes and career trajectories for those who enter it.
Because EU regulators require experts with a very specific combination of legal and technical knowledge, training can take years, and by necessity, the talent pool is geographically concentrated in Europe.
What’s more, as Campa acknowledged in comments reported by the Financial Times, the “very dynamic” nature of the crypto sector makes anticipating the shape of future innovation difficult to impossible.
Related: European Banking Authority Chair Needs Staff to Govern Crypto
And between now and 2025, when the EU’s Markets in Crypto Assets (MiCA) legislation is set to come into effect, the industry may well have moved on to the next thing. While legislators have made efforts to future-proof the MiCA framework, when it comes to interpreting the new rules, regulators will need staff that can keep up with the pace of innovation.
See also: ECB Urges Quick Implementation of MiCA
In this respect, collaboration between regulators and industry leaders will be essential. The FinTechs that are developing the crypto assets and blockchain technologies of tomorrow are the ones best positioned to advise on the kind of knowledge that regulators need to cultivate today.
As the market for crypto assets matures, regulators, FinTechs and other stakeholders are having to find their place in the emergent ecosystem, which also brings other technologies into the fray.
For example, the MiCA legislation will require those operating in crypto asset markets to declare information on their environmental and climate footprint. However, the kind of RegTech needed to accurately report the environmental impact of complex financial instruments like multi-asset crypto funds is itself in its infancy.
Read more: EU’s Landmark MiCA Legislation Hits Stablecoins Hard
If the MiCA legislation is to wave in a system that is robust enough to create stability yet flexible enough to adapt to invention, the EU will require highly skilled and sufficiently staffed regulators.
So, the EBA chair’s recent intervention appears to be a call to arms. Ultimately, all parties that want to see the European crypto sector thrive have an interest in cultivating that highly skilled talent pool.
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