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To avoid the danger, the United States must be at the forefront of cryptocurrency and blockchain

BlockChainBulletin Staff

Published

6 months ago

on

Blockchain

“Those who came before us made sure this country rode the first waves of the industrial revolution, the first waves of modern inventions and the first wave of nuclear energy, and this generation does not intend to sink in the undertow of the future age of space . We intend to be part of it, we intend to lead it.”

This was President Kennedy more than half a century ago. Even then, he understood better than most that America’s place in the world was tied to our determination to be at the forefront of progress. We were a beacon of hope because the world knew that we would use our technological prowess to expand the rule of law and basic human rights for all people. America’s promise was to ensure that discoveries were used for the good of humanity.

Today, that same spirit still animates some elements of progressive thought. My partner Democrats they are not trying to stifle the emerging industry born of artificial intelligence: they are trying to establish wise and fair rules that ensure both that it is implemented safely and that it benefits everyone, not just the wealthy. They refuse to cede the advanced semiconductor industry to foreign firms, instead helping to push the industry to build “fabs” nationwide in places like my home state of Ohio. On a range of issues, Democrats are determined to keep America ahead.


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But when it comes to blockchain—that is, the new technology that promises to power a new set of secure, decentralized, and transparent applications across a whole range of industries—many Democrats seem to have lost sight of Kennedy’s warning. Having become convinced that various misuses of blockchain undermine its underlying value, Sen. Elizabeth Warren and its allies seem more interested in stifling innovation than harnessing its potential for public good. While their concerns are understandable, their approach is fundamentally misguided.

To some extent, this challenge is less about this technology and more about the appropriate role government should play in shaping innovation. Blockchain, like nuclear fission, jet propulsion and satellite reconnaissance, and, yes, artificial intelligence, can be used for nefarious purposes. But that should not push Washington to try to stifle its development, or push it abroad. What we need to do, instead, is develop a proactive approach to foster its evolution and shape its impact. And that starts by dispelling what fuels public suspicions, namely that cryptocurrencies and blockchain constitute a hidden world of dark, mysterious, and dangerous activity.

It’s easy to see why ordinary people care about new technologies like artificial intelligence and blockchain. All those of us of a certain age saw Terminator when we were (probably too) young. The word “cryptocurrency” seems to connote that systems love Bitcoin or Ethereum were born where the monks were buried in the Middle Ages.

What’s worse is that the criminal fraud perpetrated by Samuel Bankman-Fried has fueled the idea that the industry is inherently corrupt. Today, many have reason to assume that terrorist organizations like it Hamas they are using blockchain to launder funds in ways that responsible authorities cannot trace.

The truth, however, is exactly the opposite. Far from being hidden, financing carried out using the blockchain is entirely decentralized, secure and transparent: this is, in fact, its distinctive feature. Transactions made via this new medium cannot be made without an intermediary because the technology itself creates separate ledgers that can be tracked forever. It is much easier to smuggle money earned from the sale of stolen art than to transfer money via blockchain.

Better yet, blockchain, like artificial intelligence or nuclear physics, can also be used to solve all sorts of other problems. Instead of allowing big tech to control and sell our personal data, this new technology will allow consumers to sell it directly or choose not to sell it at all.

In short, these innovations can, if managed correctly, restore power to citizens who have felt powerless for decades. But to get there we will need a clear, open and understandable regulatory regime. If blockchain will work for the greater good, it cannot be left to the dangers of the wild west. The crazy thing is that blockchain’s biggest proponents realize this: they’re demanding to be regulated.

Realizing that everyone would benefit if Washington established clear rules, those who believe in blockchain are turning to them Congress and federal government regulatory agencies to eliminate the ambiguity that now threatens to impede future growth and innovation. But, to date, Washington has not responded.

Fortunately, Congress is now working to create the kind of regulatory regime that will do exactly that: a bill to ensure that cryptocurrencies are not forced offshore where American regulators are unable to protect the public from those seeking to abuse them . A bill drafted by some of my former colleagues, known as Fit 21, would clarify which of the many federal financial agencies would oversee blockchain applications in the financial world, establish disclosure requirements to protect against a second FTX fraud, and set the necessary guidelines for maintain a safe secondary market for digital commodities. A bunch of smart young progressives, including the congressman from California Ro Khanna, are at the forefront of this issue; they aligned themselves with JFK and Democratic partyit’s old school. But too many of their progressive colleagues have yet to see the light.

Today, Democrats charged with addressing the dangers and opportunities of new technologies often face a false choice. They feel obligated to let it evolve sight unseen, as many free market fundamentalists often demand, or they seek to stifle innovation altogether, as Senator Warren and her allies want to do with blockchain.

President Kennedy made it clear that there is a middle ground.

We can leverage the best of blockchain, preventing our adversaries from developing it offshore and protecting the public from abuse. But to do this we will need to create a clear and transparent regulatory regime to oversee its development.

Fit 21 will allow potentially transformative technology like artificial intelligence to grow safely here in the United States. Here, at last, is another opportunity for America to take the lead. I just hope my Democratic colleagues are on the right side of history. President Kennedy would like it to be that way.

Tim Ryan is a member of the Coinbase Global Advisory Council and co-chair of the Blockchain Innovation Project. He is a senior advisor to the Progressive Policy Institute’s American Workers Campaign.

The opinions expressed in this article belong to the writer.