From Biden’s Executive Order to Bitcoin Miami, One Thing is Clear, Blockchain Regulation Is Here.

Trent Fowler
Apr 20, 2022

Crypto fever is rippling across hedge funds, venture firms…and for the first time, D.C. policy circles.

Earlier this month, a marquee roster of investors and lawmakers headlined Bitcoin Miami to discuss regulatory pathways for digital assets. While this year’s conference hardly sacrificed spectacle, the underlying message from many of the keynote speakers was unmistakable: cyrptocurrency has come of age, and the era in which it operated with almost no oversight is over.

“What we’re missing is policy,” Shark Tank star Kevin O’Leary told the audience. “When we get policy, and the regulator regulates, that’s not a negative thing.”

And O’Leary was not alone in giving voice to this idea. Senator Cynthia Lummis, (R-WY), is one of the few members of this rapidly-aging Congress who understands and encourages the growth of crypto and digital assets. Her remarks included words like “rules” that in the past would have sent shudders down the spine of the traditionally anti-government crypto community.

“It’s truly a legislative framework that we hope will provide the sandbox for innovation to occur but also put some regulatory parameters, so you all know the rules of the road,” said Lummis of her crypto bill currently moving through the halls of Congress. “It includes privacy components, consumer protection components, taxation components…”

Even a few years ago, such a comment would likely have generated boos. Not this time.

Regulatory Tailwinds are Imminent

What’s clear is that policymakers are not only discussing crypto regulation, they are actively formalizing it. Last month, the Biden administration signed an Executive Order directing government agencies to research the implications of cryptocurrency for US national security, consumer protection, and technological innovation.

The directive is poised to impact this fast-growing sector significantly, helping frame best practices guidelines for companies in advance of more comprehensive rules from legislative bodies. As it stands, the current lack of regulatory clarity often leaves companies in the space guessing about the impact of securities laws while interpreting the legal status of the services they provide on a case-by-case basis.

Buyers Beware

Cryptomania is reaching a fever pitch–as evinced by billboard ads at ballparks and bitcoin ATMs luring curious consumers at corner 7-Elevens–and it’s tempting for even the most skeptical and stodgy traditional financial institutions to want a piece of the action. But buyers beware. These institutions would be wise to consider how their investment in crypto will be impacted by regulatory clarity, compliance, and industry efforts to protect the space from bad actors.

Digital assets have grown into a roughly $3 trillion emerging financial market, providing the unbanked with access to financial services and fueling innovation in the US tech sector. While cryptocurrency will always have its roots in Satoshi Nakamoto’s cypherpunk writings and an ethos focused on individual sovereignty, it has also become the foundation for an alternate financial system that is rapidly changing the world.

So as tens of millions of fresh consumers race to join this new global economy, it’s only a matter of time before “the regulator regulates.” Plan accordingly.

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