Republicans jockeying to challenge Joe Biden for the presidency will face off in their third debate soon. One quality this office demands is the ability to drive American technological innovation forward. A new book by Todd White and Ralph Benko — with a foreword by blockchain’s inventor, W. Scott Stornetta, and a preface by Bitcoin core developer Jeff Garzik — tells us how to do that with blockchain.
When most laymen think of blockchain, they think of cryptocurrency. Fortunately, White and Benko’s book “Blockchain With American Characteristics” fills us in on its other potential use cases, including ensuring that billions of dollars in federal disaster relief aid go to its right recipients rather than getting siphoned off in waste, fraud and abuse. The authors advocate the proper kind of tax treatment to avoid crippling one of the Biden administration’s marquee objectives.
As White and Benko point out, China is keenly aware of the importance of driving blockchain innovation noting, “In October 2019, Chinese president Xi Jinping, the leader of America’s premier rival, threw down the gauntlet. ‘It is necessary to strengthen basic research, enhance the original innovation ability, and strive to let China take the leading position in the emerging field of blockchain, occupy the commanding heights of innovation, and gain new industrial advantages.’”
America can win this race for technological supremacy. But will Congress allow it to do so?
To his credit, President Biden took up Xi’s challenge via his March 2022 executive order, “Ensuring Responsible Development of Digital Assets.” Unfortunately, administration officials such as Gary Gensler seem to have missed the memo, as exemplified by the Security and Exchange Commission’s repeated and embarrassing attempts to dismantle Ripple Labs in court.
What will it take to provide a federal framework that unleashes blockchain technology instead of stifling it? White and Benko curated 10 of the easiest, most practical ideas for legislation that would allow the sector to flourish without reducing public protection.
“One of the preeminent thought leaders in the House Agriculture Committee, ranking member Rep. Glenn Thompson, (R-Pa.), has presented a blockchain legislative blueprint that deserves close attention. His proposal states that ‘trading venues would opt into the (Commodity Futures Trading Commission) Digital Commodity Exchange regime or remain regulated under individual state money transmitter licenses.’ This will advance consumer protection and, by reducing compliance costs, provide a major boost to innovation.’”
By dramatically deregulating at the state level by creating the option of federal “one-stop shopping” — the next president can dramatically reduce compliance costs while improving public protection. What’s not to love?
As another example, given the SEC’s aggression against blockchain enterprises — driving billions, maybe trillions of dollars of new wealth overseas in violation of the president’s commitment to onshoring good jobs — it makes sense for Congress to enact White and Benko’s proposed legislation that non-fungible token’s “are no more securities than baseball cards.” The proposal in a chapter partly contributed by industry CEO Greg Meredith makes it explicit that utility tokens are not securities and are thus not subject to SEC jurisdiction.
Above all, the next president should commit to ensuring that America remains the global leader in tech innovation. Blockchain — along with artificial general intelligence, hyperdimensional computing and other emerging technologies — is one of the pivotal sectors that will define the future. If policymakers want to unleash the power of this transformative technology, then they would be wise to study White and Benko’s book to find out how.
Let’s hope the next administration will unchain America by liberating the blockchain sector from antique 20th-century regulations to be replaced with modern 21st-century regulations that will better protect the public while allowing this tantalizing tech sector to flourish.