Between President Biden’s crypto executive order in March, the crash of Terra Luna and most recently the bipartisan crypto bill released in June, the crypto industry has witnessed a number of seismic events in recent months. Although it remains to be seen what kind of balance is struck between regulation and totally free markets, it’s promising to see such regulatory recognition of crypto’s growth and how mainstream the industry has become. It’s a clear signal that the industry is here to stay.
But to continue driving this technology forward, companies need further guidance — and soon. We’re on the brink of a monumental moment for the industry — making it more critical than ever for crypto firms to lend their voices to the ongoing debate to get us to the next chapter of industry growth.
Before diving into where the industry is going and what’s needed to get there, let’s first assess the current crypto policy landscape. For an industry only a decade old, blockchain has made an impact far beyond its years. It's experiencing tremendous grassroots adoption at a retail level, more recently leading to attention from Wall Street investors and Capitol Hill. This spotlight has led to debates at the state and federal levels across the U.S., with policymakers scrambling to learn more about the technology and how to best protect consumers while encouraging innovation.
While the jury is still out on how to strike this happy medium, progress is being made. Just weeks ago, Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) introduced the Responsible Financial Innovation Act, a landmark bipartisan bill aimed at creating a durable regulatory framework for digital assets. It is one that encourages “responsible financial innovation, flexibility, transparency and robust consumer protections while integrating digital assets into existing law.”
It’s the most forward-thinking, comprehensive legislation the industry has seen to date, and on the heels of President Biden’s crypto executive order, signifies that Washington recognizes blockchain technology has long-term potential as an American economic engine. Despite this forward movement by both sides of the political aisle to develop clear standards needed by companies, investors and developers, there are still a few roadblocks ahead of us.
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For starters, blockchain is a technical topic, and there are many facets to the technology. Even as someone with a background in aeronautical engineering, I find myself continually learning and being challenged by the subject matter. Now imagine you’re a policymaker with 20 other pressing issues affecting your constituents. It requires time and energy to get a grasp on the key blockchain issues — let alone the other issues and sectors being tracked.
In addition, there are a lot of cooks in the kitchen with the issue of regulation touching so many players — with national security, banking, finance, tech, compliance and intellectual property all part of the discussion. This has led to a host of regulatory agencies and oversight bodies each vying for a slice of the pie.
To overcome these obstacles, the industry must engage with these key stakeholders at every level to move the crypto policy needle. A great starting point would be getting involved in advocacy groups. By doing so, blockchain companies and their leaders can serve as resources to elected officials and their staffers when it comes to complex terms like DAOs, NFTs, layer-1 protocols and the like.
But that’s just a start. There are a host of other ways for everyone in the crypto ecosystem to get involved, from sharing policy recommendations on your company blog to hosting town halls with state legislators and the local community. Ultimately, engagement from across the industry will be key to shaping clear and commonsense rules of the road for all.
As we continue to make inroads individually and collectively, it’s imperative that we remain a core part of the ongoing discussion to build a comprehensive framework, with the end goal of protecting consumers while encouraging innovation.
Jae Yang is the founder and CEO at Tacen, a company specializing in crypto compliance.
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.