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Republican Leader Claims Blockchain Can Make US Government More Efficient

The Minority Leader in the U.S. House of Representatives Kevin McCarthy believes blockchain will make the Congress more efficient and transparent.

Rep. Kevin McCarthy, the current Republican Minority Leader in the United States House of Representatives, said on Tuesday, March 12, that blockchain can make the U.S. Congress a more efficient and transparent place.

Speaking to the Select Committee for Modernization of Congress, McCarthy said that blockchain technology has changed the paradigm of security in the financial world:

“Blockchain is changing and revolutionizing the security of the financial industry. Why would we wait around and why wouldn’t we institute blockchain on our own, to be able to check the technology but also the transparency of our own legislative process?”

The lawmaker also suggested that Congress use “21st century technology” to make the government more friendly, but at the same time more accountable. “We have an opportunity to take this window to make this place more effective, more efficient, and most importantly, more accountable,” he concluded.

McCarthy became a member of the U.S. House of Representatives in 2007, serving as House Majority Leader from 2014 to 2019, and as House Minority Leader since January 2019.

The Select Committee for Modernization of Congress was established during the 116th Congress in early 2019. Democratic congressman Derek Kilmer chairs the committee, which forms recommendations for modernizing the legislative branch.

As Cointelegraph reported in October, U.S. Representatives Doris Matsui and Brett Guthrie proposed a new bill, dubbed the “Blockchain Promotional Act 2018,” to the House of Representatives. The bill aimed to create a working group to study the potential impact of blockchain across the policy spectrum, and to establish a common definition of the technology.

More recently, the state of Wyoming passed two blockchain-related bills. The first laid groundwork for storing so-called certificate tokens representing stocks on a blockchain “or other secure, auditable database,” and permitted their digital transfer. Another acknowledged the establishment of special purpose depository institutions to serve blockchain-related businesses, as they are often unable to receive services from federally-insured banks.

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US Federal Government: Confusing Regulation For Crypto, Full Clearance For Blockchain

With more influential voices in academia and politics speaking out against burdensome federal regulations, is change imminent?

Individual US states seem to be in competition for the title of the most crypto-friendly in the Union – Ohio’s recent announcement of imminent crypto tax payments being the latest example. Meanwhile, federal authorities remain in disarray with regard to how to define, let alone consistently regulate digital assets.

It is not just stakeholders and crypto buffs who bemoan the disorderly state of federal policies: their usual talking points have been recently validated by academics. In an article forthcoming in a Journal of Financial Transformation, University of Arkansas Law School professor Carol Goforth weighed in with an opinion that essentially summarizes what experts have been airing all along. Goforth notes that there are at least four distinct federal regulators that oversee various aspects of digital assets’ issuance and, each with a different interpretation of their nature.

While the Commodity Futures Trading Commission (CFTC) treats crypto as commodities, the Securities and Exchange Commission (SEC) insists they are securities, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) applies currency rules, and the Internal Revenue Service treats digital money as property.

Skeptical of the possibility that these regulatory powers get consolidated anytime soon, Prof. Goforth calls for increased coordination between the agencies in an effort to introduce a more nuanced, rather than ‘monolithic,’ approach to various crypto assets. In other words, her proposed remedy is to treat such assets on a case-by-case basis, contingent upon their functionality and their users’ motivations. But have there been any signs of such change of heart in the US regulators and policymakers as of late?

At least in one instance, yes. On December 11, CFTC issued a public request for input, seeking in-depth comments on multiple aspects of how Ether and the Ethereum Network operate. The document, which will generate feedback to fuel the work of the Commission’s LabCFTC initiative, includes a list of 25 items pertinent to Ethereum’s purpose, functionality, scalability, security, and even the details of the system’s imminent shift to proof-of-stake consensus mechanism.

While the news got the community agitated, it’s not immediately clear what will come out of the regulator’s renewed interest in Ethereum’s fundamentals. Some observers, like MIT Technology Review’s Mike Orcutt, suggested that the development might endanger the prospects of the long-anticipated ETH futures.

What appears to be the CFTC’s effort to rethink the status of a single asset might not be indicative of broader concerted push towards “a more nuanced approach.” Other US regulators haven’t made similar moves, while some produced signals are indicating that they are still very much in line with the good old catch-all approach. For instance, consonant with their usual trope, recent remarks by a Department of the Treasury official stressed the need for crypto industry players to strengthen anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) infrastructure.

US Congress

There is always hope that legislators on the Capitol Hill will lead the charge towards a better regulatory framework. Indeed, in the last few weeks, the blockchain-minded members of Congress have been on the move, making waves in the media and announcing proposed bills.

On Dec. 6, US Representatives Darren Soto and Ted Budd introduced two bills aimed at preventing crypto price manipulation and optimizing regulatory framework: The Virtual Currency Consumer Protection Act of 2018 and the U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018, respectively.

Both include recommendations to the CFTC that prescribe a set of regulatory changes. The first bill outlines possible scenarios of price manipulation in the crypto markets and advances remedies, whereas the second one calls for a comparative study of regulatory arrangements in other national contexts, with the view to improve the current domestic ‘burdensome regulations that may inhibit innovation.’

The last few weeks have also seen the rise of a new star of crypto legislation, at least in terms of generated publicity. Even though not a formal member of the Congressional Blockchain Caucus, Representative Warren Davidson of Ohio came into the spotlight at least twice in the month of December so far. First, speaking at the Blockland Solutions conference in Cleveland, Davidson announced that he was planning to introduce a bipartisan bill that would create a new asset class for tokens, thus enabling the feds to regulate initial coin offerings (ICOs) more efficiently.

A week later, during an interview to NPR, Davidson said that the border wall between the US and Mexico could be crowdfunded, suggesting that one of the mechanisms for that could be blockchain and issuance of ‘wall coins.’

The executive

While financial regulators and lawmakers are taking time to figure out ways to better handle the realm of digital assets, many federal agencies that are not concerned with monetary matters are exploring the uses of blockchain technology to aid their day-to-day operations.

With increasing interest to supply chain logistics as one of the most widely discussed non-financial blockchain applications, the news emerged that the feds are eyeing DLT-powered provenance tracing tools to increase food safety.

Amid the outbreak of E. coli associated with romaine lettuce originating from a California farm that took a while to trace and had the authorities introduce a blanket warning, the US Food and Drug Administration (FDA) took steps towards improving its tracking tools. The agency hired Frank Yiannas, formerly Walmart’s food safety boss, as its foods and veterinary medicine deputy commissioner. Just a few months ago Yiannas oversaw first trials of Walmart’s blockchain-powered tracking system, and he is now expected to introduce a similar solution with the FDA.

The United States Department of Homeland Security (DHS) took an interest in two blockchain applications relevant to the scope of its activities. One is related to forensic analysis of transactions: apparently concerned about the potential of ‘privacy coins’ like Monero and Zcash to help criminals escape the same level of scrutiny that is already available for bitcoin transactions, the DHS kicked off pre-solicitation process for parties potentially interested in supplying solutions capable of dealing with such “newer blockchain implementations.”

Another matter of the agency’s interest is germane to the licensing and certification functions performed by its three subsidiaries: the US Customs and Border Protection (CBP), US Citizenship and Immigration Services (USCIS), and Transportation Security Administration (TSA). In an effort to improve the documentation flow, the DHS calls for startups to offer blockchain-powered solutions that will help combat fraud, counterfeiting, and forgery of digital documents.

In the defense field, the US Air Force Institute of Technology (AFIT) unveiled an app designed to train members of the armed forces to develop and run blockchain-based supply-chain solutions. Recognizing that such supply chains will most likely be prevalent in the future military logistics, the Air Force partnered with several private contractors to build a system preparing personnel for their new functionality. Among the decisions that they will learn to make is what incentive structure best suits a given task, or whether a system should be permissionless or permissioned.

Meanwhile, the research arm of the US military, the Defense Advanced Research Projects Agency (DARPA), is looking to explore potential uses of permissionless distributed ledgers. In preparation for a workshop scheduled for February 2019, the agency solicits information on a range of blockchain-related topics, including security and centrality of distributed consensus protocols.

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US Congressman is Working On a Bill To Exempt ICOs and Cryptos From Securities Laws

United States Congressman Warren Davidson from Ohio has announced plans of introducing legislation that will regulate ICOs (Initial Coin Offerings) and cryptocurrencies as a different asset class thus exempting them from current securities laws. Mr. Davidson represents Ohio’s 8th District and can be considered as a voice of reason when it comes to the topic of crypto and ICO regulation in the United States.

The legislation has not yet been made public but Mr. Davidson promised that it would be soon as there was an urgent need to provide clarity into the new industry. He added that ICOs and cryptocurrencies provided an alternative method for entrepreneurs to raise capital.

Warren Davidson announced his plans this past Monday at the Blockland Solutions Conference held in Cleveland, Ohio. The four day event was from the 1st of December till the 4th and included the following list of prominent speakers.

  • Joseph Lubin – Ethereum Co-founder and Founder of Consensys
  • Mark Hurd – CEO, Oracle Corporation
  • Jerry Cuomo – IBM Fellow, Vice President, Blockchain Technology, IBM
  • John Donovan – CEO AT&T Communications
  • Jeremy Gutsche – CEO, Trend Hunter AI and bestselling Author
  • Jason Kelley – General Manager, Blockchain Services, IBM
  • Beth Mooney – Chairman and CEO, KeyCorp
  • Larry Sanger – Wikipedia Co-founder and Chief Information Officer of Everipedia
  • Nick Szabo – Inventor of Smart Contracts and Bit Gold
  • Alex Tapscott – Author, Blockchain Revolution and Co-founder of Blockchain Research Institute

Republicans Leading the Charge for Clarity from the SEC Regarding Cryptos and ICOs

To note is that Warren Davidson is a member of the Republican party. Members of the party have been noted to be the most vocal in demanding clarity from the Securities and Exchange Commission (SEC) with regards to how to regulate Bitcoin and other cryptocurrencies in the United States.

Back in August, Davidson had invited 32 cryptocurrency organizations to discuss ICO regulation. The round-table discussion was held on the 25th of September at Capital Hill. A recording of the discussion is available on the popular video streaming website of Youtube through this link.

What are your thoughts on the possibility of Congressman Warren Davidson introducing legislation that exempts ICOs and cryptos from the current securities laws? Please let us know from the comment section below. 

[Image courtesy of davidson.house.gov]

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.

The post US Congressman is Working On a Bill To Exempt ICOs and Cryptos From Securities Laws appeared first on Ethereum World News.

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US Congressman is Working On a Bill To Exempt ICOs and Cryptos From Securities Laws

United States Congressman Warren Davidson from Ohio has announced plans of introducing legislation that will regulate ICOs (Initial Coin Offerings) and cryptocurrencies as a different asset class thus exempting them from current securities laws. Mr. Davidson represents Ohio’s 8th District and can be considered as a voice of reason when it comes to the topic of crypto and ICO regulation in the United States.

The legislation has not yet been made public but Mr. Davidson promised that it would be soon as there was an urgent need to provide clarity into the new industry. He added that ICOs and cryptocurrencies provided an alternative method for entrepreneurs to raise capital.

Warren Davidson announced his plans this past Monday at the Blockland Solutions Conference held in Cleveland, Ohio. The four day event was from the 1st of December till the 4th and included the following list of prominent speakers.

  • Joseph Lubin – Ethereum Co-founder and Founder of Consensys
  • Mark Hurd – CEO, Oracle Corporation
  • Jerry Cuomo – IBM Fellow, Vice President, Blockchain Technology, IBM
  • John Donovan – CEO AT&T Communications
  • Jeremy Gutsche – CEO, Trend Hunter AI and bestselling Author
  • Jason Kelley – General Manager, Blockchain Services, IBM
  • Beth Mooney – Chairman and CEO, KeyCorp
  • Larry Sanger – Wikipedia Co-founder and Chief Information Officer of Everipedia
  • Nick Szabo – Inventor of Smart Contracts and Bit Gold
  • Alex Tapscott – Author, Blockchain Revolution and Co-founder of Blockchain Research Institute

Republicans Leading the Charge for Clarity from the SEC Regarding Cryptos and ICOs

To note is that Warren Davidson is a member of the Republican party. Members of the party have been noted to be the most vocal in demanding clarity from the Securities and Exchange Commission (SEC) with regards to how to regulate Bitcoin and other cryptocurrencies in the United States.

Back in August, Davidson had invited 32 cryptocurrency organizations to discuss ICO regulation. The round-table discussion was held on the 25th of September at Capital Hill. A recording of the discussion is available on the popular video streaming website of Youtube through this link.

What are your thoughts on the possibility of Congressman Warren Davidson introducing legislation that exempts ICOs and cryptos from the current securities laws? Please let us know from the comment section below. 

[Image courtesy of davidson.house.gov]

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.

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Twitter CEO Tells Congress It's Exploring Blockchain in Bid to Fight Scams

Twitter CEO Jack Dorsey told a Congressional committee Wednesday that the social media company is exploring blockchain solutions for its platform.

Dorsey was responding to a question from California Representative Doris Matsui during a House Committee on Energy and Commerce hearing that focused on alleged bias against political conservatives on Twitter.

“You previously expressed interest in the broad applications of blockchain technology, including potentially in an effort to verify identity to fight misinformation and scams,” Matsui remarked before asking: “What potential applications do you see for blockchain?”

Dorsey replied that “we need to start with problems we’re trying to solve for our customers and look at all available technology,” going on to say:

“Blockchain is one that I think has a lot of untapped potential, specifically around distributed trust and distributed enforcement. We haven’t gone as deep as I would like just yet in understanding how we might apply this technology to Twitter but we have people thinking about it today.”

That the company is looking at possible solutions for shoring up digital trust using blockchain is perhaps unsurprising, given recent events.

As reported by CoinDesk and many other outlets, Twitter has been ground-zero for identity scams that seek to defraud users out of their cryptocurrency holdings. Through the use of copycat accounts and what researchers say is a massive botnet, would-be fraudsters have sought to trick users into sending their coins to fictitious accounts.

During the hearing, Matsui remarked about a previously-reported plan that calls for the Department of Commerce to create a blockchain workign group.

“As I previously announced in this committee, I am soon introducing legislation to direct the Department of Commerce to convene a working group of stakeholders to develop a consensus-based definition of blockchain,” she said prior to asking Dorsey about the social media firm’s work with the technology.

Image via House of Representatives video

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin-Friendly US Senate Candidate Defeated in Republican Primary Elections

U.S. Senate candidate Austin Petersen, who is known for his Bitcoin (BTC) advocacy, lost the Republican primary election Aug. 7.

According to unofficial results published by the Missouri Secretary of State, Petersen lost the battle to Attorney General Josh Hawley, who received 58.6 percent of the 663,553 votes. Hawley will go on to face to Democratic Missouri Sen. Claire McCaskill in the general election. Petersen tweeted:

“Sorry I couldn’t pull out a win for us, friends. My faults as a candidate are my own, and not the fault of our activists. I am not a perfect messenger. One day soon I believe we will see more leaders who rise up and fight for our cause more fiercely and more successfully than I.”

In February, ABC News reported that Petersen’s campaign for Senate received 24 donations in Bitcoin amounting to just under $10,000 total. One such donation was reportedly the largest BTC donation ever received in a federal election.

Upon the receipt on Dec. 20, the contribution of 0.284 BTC was purportedly converted to U.S. dollars. At the time the donation was worth over $4,500, putting the donation over the Federal election limit of $2,700 per individual. The candidate’s website explained that the first $2,700 would go toward activities in the primary election, while the remaining amount would be used in the general election. Petersen’s campaign manager Jeff Carson said on his behalf:

“I think it goes without saying we’re going to see a lot more of [cryptocurrency] in terms of campaign contributions and campaign financing… Austin is personally a fan of competition in the marketplace, even when it comes to our currency. With the rise of cryptocurrencies like Bitcoin, it was a no brainer for us to use those.”

Petersen’s campaign represented an opportunity for crypto advocates to have a lawmaker on their side on Capitol Hill, as some members of Congress call for increased control and others characterize crypto outright as a refuge for “charlatans and scammers.”

Some American lawmakers are taking a more tempered approach to digital currencies, even becoming hodlers themselves. Earlier this week, Cointelegraph reported that the Chair of the Judiciary Committee of the U.S. House of Representatives revealed that he has holdings in Bitcoin, Ethereum (ETH), and Bitcoin Cash (BCH). Congressman Bob Goodlatte (R-VA) reported that he owns between $17,000 and $80,000 in crypto on his mandatory annual Financial Disclosure Statement.

Meanwhile, Libertarian Party candidate for Wisconsin governor Phil Anderson said in July that he will accept BTC donations despite the state’s Ethics Commission’s finding them a “serious challenge” to compliance with state law. Anderson stated that  his decision to accept BTC does not mean his party is “thumbing [their] noses at the [commission],” as he believes they are abiding by the law.

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US: Chair of House Judiciary Committee Discloses Ownership of Cryptocurrency

The chair of the Judiciary Committee of the U.S. House of Representatives may be the first member of Congress to disclose that he owns cryptocurrency, Sludge reports Aug. 6.

Congressman Bob Goodlatte (R-VA) reported that he owns between $17,000 and $80,000 in digital currency in his annual Financial Disclosure Statement. Goodlatte filed the statement on May 10, a month before the U.S. Ethics Committee issued new rules about disclosing digital currency holdings.

Per the new rules, all House Members must disclose their own and their spouse’s crypto holdings valued over $1,000, and report over $1,000 worth of crypto transactions within 45 days. According to the statement, the Congressman has principally invested in Bitcoin (BTC), with some holdings in major altcoins Ethereum (ETH) and Bitcoin Cash (BCH).

Goodlatte’s son, Bobby Goodlatte Jr., is reportedly an angel investor in San-Francisco-based crypto exchange Coinbase, however it is unclear when and how much he invested in the company.

For some lawmakers in the U.S. Congress, cryptocurrencies are an object of suspicion or outright derision. At a hearing this spring, Representative Sherman of California went so far as to call cryptocurrency “a crock” adding that they can only serve to “help terrorists and criminals move money around the world.”

While some regulators and lawmakers have called for tightening regulations on digital currencies, there are several members of Congress who are proponents for the industry. Bitcoin-friendly Congressman Jared Polis is known for the establishment of the Congressional Blockchain Caucus, a group that aims to further expand blockchain technology and promotes a laissez faire regulatory approach.

Senator Mark Warner earned a reputation as a crypto-bull in forecasting the market’s capitalization to exceed $20 trillion by 2020. “I was an early investor in cell phones back in the ’80s, and I believe blockchain has the potential to be just as transformational as cell phones. As our government begins to look at crypto, I don’t think you can separate cryptocurrencies from the technology they’re based on,” he said.

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US Lawmakers Want FinCEN Mandate to Explicitly Cover Crypto

A new Congressional bill would update the mandate of the Financial Crimes Enforcement Network (FinCEN) to include a specific focus on cryptocurrencies.

The FinCEN Improvement Act (H.R. 6411), filed jointly by U.S. Congressmen Ed Perlmutter (D-CO) and Steve Pearce (R-NM) on July 18, directs FinCEN to look into how cryptocurrencies might be used in terrorism or other illegal activities, in addition to working with tribal law enforcement agencies and other terror financing schemes.

Specifically, it includes language reflecting “matters involving emerging technologies or value that substitutes for currency, and similar efforts.”

It states:

“Although the use and trading of virtual currencies are legal practices, some terrorists and criminals, including international criminal organizations, seek to exploit vulnerabilities in the global financial system and are increasingly using emerging payment methods such as virtual currencies to move illicit funds.”

FinCEN, which operates under the U.S. Treasury Department, is set to “safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities,” as stated on its website.

Pearce said in a news release that the new directives would “ensure” FinCEN’s ability to “continue their vitally important mission in the dynamic world environment.”

The proposed bill comes years after FinCEN first published guidance for money transmitters working with cryptocurrencies. Firms in the U.S. that undertake such activities are required to register with FinCEN, and more recently, the agency said that exchanges which handle tokens sold during initial coin offerings (ICOs) must also comply with its regulations.

“This is an important step in modernizing FinCEN and ensuring our law enforcement and intelligence communities can detect and prevent criminals and terrorist networks from using virtual currencies to move illicit funds or carry out cyber warfare,” Perlmutter said last week.

Image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.

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Don't Let the Crypto Circus in Congress Fool You

Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.


Progress?

Judging from the most eye-catching headlines from two separate hearings on Capitol Hill Wednesday, it’s tempting to conclude there has been little of it from U.S. regulators and legislators in their comprehension of cryptocurrencies these past five years.

In fact, Rep. Brad Sherman’s laughable suggestion during a House Financial Services Committee hearing in the house that the U.S. ban mining and purchases of bitcoin could suggest we’ve gone backward since bitcoin was first discussed in Congress in the fall of 2013.

At that time, the sight of Jennifer Shasky Calvery, then-director of the Financial Crimes Enforcement Network (FinCEN), telling bitcoin exchanges and wallets they needed to register with FinCEN, was ultimately viewed positively by crypto enthusiasts. In showing that regulators like her weren’t inherently hostile to cryptocurrencies, Calvery’s comments led to a doubling in bitcoin’s price over the following two weeks to more than $1,100 in early December.

Now, five years on, some officials do sound a bit hostile.

At the same hearing that Sherman attended, Federal Reserve Chairman Jerome Powell said cryptocurrencies are “great if you’re trying to hide or launder money.” Had he noticed how the FBI had traced the bitcoin transactions of the 12 Russians indicted last week for trying to tamper with U.S. elections?

The folly of his position was indirectly identified over at the other hearing, where Chairman of the House Agriculture Committee Michael Conaway — who presumably did not intend to take a dig at the Fed Chairman — joked, “As long as the stupid criminals keep using bitcoin, it’ll be great.”

It’s best to look beyond the eye-catching headlines, however. In the wider context, it’s clear that we have actually come some way forward in regulatory comprehension of this technology. And that’s a good thing.

The sheer frequency with which governments, both here and in the rest of the world, are engaging on the topic is itself acknowledgment that it’s an important development that’s here to stay. It’s hard to keep track of how many hearings, symposiums, workshops and conferences are either sponsored by governments or attended by their officials. Consider also how dozens of law firms, a community that’s constantly interacting with both regulators and legislators, either have crypto practices or are doing research and education into how the law should deal with this issue.

The folks at Coin Center and others in the crypto space who’ve been engaging with regulators since 2013 remark that non-political staff members from the Securities and Exchange Commission, the Commodity Futures Exchange Commission and various other agencies are now much more comfortable using the language of this industry than back then.

This is the gradual way that change occurs within the creaking bureaucracy of Washington.

The influence of a parallel market

Part of this shifting tide reflects the unavoidable reality of crypto markets, which have grown massively since 2013.

Skeptics who cite a lack of clear real-world applications for cryptocurrencies and blockchain technology fail to see that the trading in bitcoin and tokens they dismiss as hollow speculation represents such an application. It marks a major shift in how money is gathered, exchanged and allocated.

Notwithstanding problems of measurement, the almost $300 billion that CoinMarketCap says is the crypto market’s total market capitalization is a historically significant figure. Even after its correction from a high above $800 billion in early January, the number belies the presence of an emerging, parallel capital market.

Much of that market will get shaken out and hundreds of coins will die, but others will emerge and, amid a mix of earnest offerings, scams, game-changing business models, big dreams and total flops, a unique new, gatekeeper-less market for ideas will arise.

It’s much like the Wild West, perhaps, but the Wild West gave rise to the vibrant, innovative economy of Northern California. Is something similar happening here in a more geography-agnostic way?

And, over time, there has been real human growth, too. Worldwide usage and trading, despite the market correction since January, remain many times larger than they were in 2013. Coinbase and Blockchain.com alone are now running more than 20 million wallets each. There are more than 200 crypto exchanges, where more than $16 billion is changing hands daily in dozens of countries. The dollar amounts are still small compared with the trillions traded in traditional fiat capital markets, but they are by no means insignificant.

These numbers mean that governments are compelled to pay attention to this sector. Powell might be currently saying that crypto markets are too small to threaten financial stability, and therefore for the Fed to regulate them, but he will keep being pestered by lawmakers and their staff, as well as those of other government agencies, for his opinion on them.

Why? Because too many people and too much money is engaged in this industry for anyone in politics and policymaking to ignore.

International competition

Adding to this is the matter of global competition.

Various jurisdictions are taking stances that proactively encourage crypto and blockchain development, in part because they’re eager to attract some of that capital flow and in part because they want to promote innovation.

Singapore, Switzerland, Malta and Bermuda are all emerging as important new domiciles for ICOs. In recognizing concepts such as utility tokens, they are leading what I described two weeks ago as a global policymaker awakening to the innovative possibilities for new forms of economic design and value exchange.

Meanwhile, Japan has encouraged cryptocurrency transactions with some clear and fair regulations around them. And South Korea has just offered new tax perks to blockchain startups.

This is the backdrop to Wednesday’s testimony from former CFTC chairman Gary Gensler – now a lecturer at MIT’s Sloan School of Management and, with me, an advisor to the Digital Currency Initiative at MIT Media Lab – in which he urged legislators to enact clear rules for ICOs and cypto-tokens to instill confidence in the sector and avoid an innovation exodus.

When a respected former regulator says an industry like this matters, it resonates with the Washington crowd.

Yes, it’s baffling that Rep. Sherman and his ilk can still, after all this time, believe it would be a good idea to ban bitcoin, a decentralized, authority-less system for communicating information. Perhaps he was doing the bidding of his campaign donors, the top three of which in 2018 are from traditional finance and payments companies.

In any case, he’s irrelevant to the evolution of this industry. In the end, people like him will be overwhelmed by the many more who get it.

Image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.