the biden administration can change the world with new crypto regulations

The United States government is currently falling short in its approach to regulating the fintech and blockchain sectors.

For the past four years, the absence of a defined regulatory structure has left the development and progress of cryptocurrency products in a state of uncertainty. Individuals with the expertise and foresight to construct solutions for a wide range of users – from individuals to major financial institutions and governmental bodies – possess the capability to do so. However, without a defined regulatory pathway, the potential for these products to mature and achieve widespread adoption remains unrealized.

Regulatory processes should not be based on conjecture. Since the Securities and Exchange Commission determined in 2019 that Bitcoin (BTC) and Ethereum (ETH) do not qualify as securities, the industry has experienced stagnation. This lack of clarity restricts blockchain innovation to a limited number of cryptocurrencies, despite the industry’s broader scope. Insufficient regulation hinders the substantial possibilities offered by crypto and blockchain technology.

The change in administration offers a valuable opportunity for officials from all political parties to establish transparent policies and regulations that empower banks, fintech companies, and corporations to utilize and safeguard crypto assets, enhancing operational efficiency and improving the customer experience.

We can draw insight from past successes. The passage of the High Performance Computing and Communications Act (HPCCA) in 1991, a bipartisan initiative championed by Senator Al Gore and signed into law by President George H.W. Bush, serves as a relevant example.

This legislation facilitated the growth of companies such as Amazon, eBay, Yahoo, and Google, establishing the U.S. as a pioneer in the early stages of the internet. The introduction of web browsers in 1993 and the subsequent emergence of the dot-com era in 1994 solidified the U.S.’s position as a hub for innovation.

The browser fundamentally altered the landscape. It generated new employment opportunities, spurred economic growth, and fostered the development of technological categories that were previously unimaginable. A comparison of the top 100 Fortune 500 companies in 1991 versus 2020 reveals a dramatic shift; technology was a minor factor in 1991, with IBM as the sole tech representative, while by 2020, the list was largely comprised of technology leaders like Microsoft, Apple, Alphabet, Facebook, and Salesforce.

Companies within the top 100 have collectively contributed nearly three million jobs, with many holding leading positions in market capitalization. Even amidst a challenging year, successful technology IPOs such as DoorDash, Snowflake, Asana, and Palantir have continued to emerge.

Innovations we now consider commonplace, including Google, the iPhone, Uber, Salesforce, Spotify, and Postmates, were made possible by the HPCCA. We now have a chance to replicate this success with a bipartisan effort centered on crypto innovation, supported by both the public and private sectors to ensure clear regulatory guidelines. Effective regulation will facilitate innovation, enabling companies to create new products, maintain U.S. competitiveness, and attract further investment.

The increasing adoption of crypto and blockchain is undeniable. Prominent companies like PayPal, Square, and Robinhood are actively integrating crypto into their platforms, bringing it to a wider audience. The endorsement from these established brands fuels growing interest in the potential of cryptocurrencies and their ability to enhance business operations and customer service.

Leading crypto firms, including Ripple, Coinbase, Gemini, DCG, and Chainalysis, are currently headquartered in the United States. However, regulatory ambiguity may discourage new entrepreneurs from establishing businesses within the U.S., potentially leading them to choose jurisdictions with clearer rules.

A clear understanding of the regulatory framework is essential for continued innovation. Developers can build upon open-source technologies, entrepreneurs can launch new ventures and develop innovative products, and investors can provide capital to support these endeavors.

It is vital that the most groundbreaking crypto and blockchain companies are developed and expanded within the U.S., creating value and opportunities for American citizens. Just as in the early days of the internet, the future of this industry remains uncertain, but adaptable regulations can unlock significant potential.

The Biden administration has a significant opportunity to shape new policies and legislation, providing clear direction that will accelerate innovation in fintech and crypto for generations to come. The administration could:

• Establish a national digital banking licensing charter – similar to Singapore’s model – to simplify the licensing process for fintechs seeking approval for crypto, lending, and payment services. Currently, U.S. companies must navigate a complex state-by-state licensing system, incurring substantial legal costs and delays.
• Provide definitive classifications for digital assets, derivatives created through smart contracts, and stablecoins.
• Form a bipartisan public-private sector working group, led by forward-thinking experts like Andrew Yang, to collaborate on groundbreaking legislation that mirrors the impact of the HPCCA on internet companies.
• Appoint a Securities and Exchange Commission chair who genuinely prioritizes innovation while safeguarding consumers and the integrity of the markets. The current SEC’s stated support for innovation has not translated into meaningful action; every crypto project it has engaged with has either failed, declared bankruptcy, or been left with valueless assets.

Regardless of the regulatory path chosen, ongoing collaboration between policymakers, regulators, and the industry is crucial to ensure that the growing number of fintech and blockchain users continue to benefit from best-in-class solutions with appropriate consumer and market protections.

It is evident that this technology is enduring, and I trust that elected officials will recognize its potential to drive substantial progress within the financial industry. Just as with the HPCCA, thoughtful regulation can simultaneously protect consumers and markets while empowering U.S. companies to create transformative innovations.