A Crucial Moment for Crypto Legislation
Smart rules for the new technology can unleash a wave of innovation like the one the 1996 Telecommunications Act fostered for the internet.
By Pat Toomey
The New York Stock Exchange in Manhattan, June 5. Photo: Michael Nagle/Bloomberg NewsThe internet of the mid-1990s looked quite different from today.
Amazon sold only books, Google didn’t exist, and there was no practical way I could use it to help expand the restaurant chain my brothers and I had begun in Pennsylvania.
The World Wide Web was an interesting idea, but few fully understood how much it would revolutionize our daily lives.
That changed when Congress passed the Telecommunications Act of 1996, the first set of rules and guardrails around the development of the internet.
The law enabled telephone and cable companies to offer broadband services.
Congress’s action opened markets to competition and gave companies the clarity they needed to develop services for new technologies and scale them across the country.
By 2014 broadband providers had made $1.4 trillion in capital investments to build the internet’s infrastructure.
Under clear, light-touch regulation, the internet flourished and America became the tech capital of the world.
Fast forward three decades, and a new technology is poised to have an equally profound effect on how business is conducted on the internet.
Crypto and the underlying blockchain technology have similar potential to the internet’s all those years ago.
But unlike the well-defined, light-touch regulation of the early internet, the absence of clear rules, combined with the dubious assertion of jurisdiction by hostile regulators such as the Securities and Exchange Commission, has had a chilling effect on crypto innovation.
Thankfully, Congress is close to changing this.
On June 17, the Senate passed the Genius Act, a sensible regulatory road map for stablecoins—cryptocurrencies designed not to fluctuate in value.
While an excellent bill, it isn’t sufficient to address all the innovation happening in the crypto space beyond stablecoins.
We need both a stablecoin bill like the Genius Act and broader legislation that would create a market structure regulatory framework for issuing, trading, settling, clearing and owning crypto tokens in general.
Last year, Sens. Cynthia Lummis (R., Wyo.) and Kirsten Gillibrand (D., N.Y.) introduced comprehensive market-structure legislation, and this past week Senate Banking Chairman Tim Scott (R., S.C.), Sens. Lummis, Thom Tillis (R., N.C.), and Bill Hagerty (R., Tenn.) released a set of principles for market structure legislation, highlighting the momentum behind this concept.
Crypto is more than stablecoins—and more than tokens.
The blockchain technology that underpins it is already changing not only finance, but the foundational systems that support the things we use everyday.
Just as apps run on smartphone operating systems, countless apps can run on blockchain infrastructure.
Look no further than IBM’s work with blockchain technology to improve global supply chains and trade, or how Audius, a music distribution platform, uses the blockchain to expedite direct payment to artists and puts decision-making power in their hands.
Or think of Mastodon, a decentralized social-media platform that nobody owns or controls, where members can maintain the value of their followings and content.
The applications and opportunities stemming from blockchain could be as transformative as the internet itself.
Regulatory ambiguity is the enemy of innovation.
Smart crypto legislation can encourage innovation and protect consumers.
Lawmakers must capitalize on the bipartisan momentum in the digital asset space.
The passage of the Genius Act would provide regulatory clarity for stablecoins and could revolutionize the payment system.
It’s essential, but only the start of a comprehensive crypto regulatory regime.
One potentially fast and effective option for Congress to consider is to attach a market structure bill to stablecoin legislation, giving crypto developers, not only those building stablecoins, the framework they need to keep innovating safely on our shores.
Other countries, such as the U.K. and Australia, already have adopted such frameworks for crypto.
By passing both stablecoin and market-structure frameworks, Congress can ensure U.S. technological leadership while bolstering innovation and consumer protections.
Mr. Toomey, Republican, served as a U.S. senator from Pennsylvania, 2011-23. He is a member of Paradigm’s Policy Council and a member of the Coinbase Global Advisory Council.
0 comments:
Publicar un comentario