Why RegTech Is A Major Boon for Space Exploration
Updated: Mar 31
According to The Space Report 2020 Q4, there were only 114 orbital and 31 suborbital launches in 2020 globally. It can take five to seven years to plan and execute one launch, and regulatory compliance remains a considerable barrier to entry. Some of these delays are due to strict safety standards, while some are based on inefficiencies throughout the Compliance process itself.
On October 15, 2020, the Federal Aviation Administration (FAA) released the final version of commercial launch and reentry regulations. One of the main changes is that companies can now receive a single license for multiple launches of the same vehicle from different launch sites. Yet major industry players highlighted that there are still many outdated and sometimes even conflicting regulations that make it difficult to do business. Some expressed a need for a more interactive process between the FAA and the Commercial Space Industry.
This is where private Space companies would benefit immensely from Regtech. Regtech refers to regulatory technology and the application of innovative automation tools to make handling regulatory compliance straightforward. Traditionally, this term is used in the financial sector, but Distributed Ledger Technology (DLT), which has been around for over a decade, has the potential to truly streamline the approval process for launches and other Space missions.
The logistics of launching satellites and other vehicles require suppliers, manufacturers, service providers, operators, and regulatory authorities to work together. Since there is no single party responsible for the full launch process, the peer-to-peer nature of distributed ledgers would upgrade the current legacy systems and streamline cooperation. Distributed ledgers reduce the amount of work involved in approvals, administrative tasks, and quality checks. They also decrease the potential for fraud and increase communication security between parties. They allow everyone to have input in rulemaking decisions and are a powerful mechanism for achieving consensus between parties.
RegTech is already changing the financial world with activity-monitoring tools, regulatory reporting systems, data risk management, and fraud prevention. Utilizing these benefits for Space companies would significantly cut time and costs for this $423.8 billion industry and bring humanity closer to interstellar travel and trade.