A cultural and political shift in Washington is suddenly favoring blockchain technology, one of the most important internet innovations of the last 15 years. Blockchains—the uses of which include but aren’t limited to cryptocurrency—recently received bipartisan support in both chambers of Congress.
On May 23, the SEC approved exchange-traded funds (ETFs) for the spot market for a type of cryptocurrency known as Ethereum. It was the second type of ETF after Bitcoin bringing crypto exposure to traditional investors and authorized by the SEC, crypto’s most incredulous regulator. The same week, the House passed FIT21, a bill meant to provide regulatory clarity for the digital currency industry, which has begged for a decade for clear guidance on how to operate within U.S. law.
Striking the right balance between regulatory compliance and the decentralized finance promised by blockchain-based cryptocurrencies is going to take time. And it will likely never be perfect. President Biden has vetoed the resolution to overturn SAB 121, demonstrating conflict within the Democratic party over how the technology should evolve. However, given the stigma that has clouded blockchain technology’s innovation under the banner of murky crypto failures such as the collapse of Sam Bankman-Fried’s FTX, the sudden bipartisan political interest in crypto-native technology is a remarkably positive development for the future of the new internet.
Today, more than 50 million Americans own some form of cryptocurrency. Even traditional financial institutions are moving on-chain to improve settlement, reduce friction and human error, and improve global accessibility to monetary assets. And yet, there is so much more to blockchain benefits than financial use cases.
In an election year with crypto in the spotlight and both major presidential campaigns reportedly paying attention to crypto, it would be a missed opportunity not to reintroduce our industry and what we’re fighting for.
More than just cryptocurrency
The crypto ecosystem’s advocacy is about much more than new financial products. It’s about a new approach to the internet, based on blockchain technology and often styled as “web3,” that will improve the online foundation that we all use every day to transact, communicate, keep our families safe, and conduct many of the tasks of our day-to-day lives.
Cryptocurrency is just one application of the blockchain, a series of technologies that form a more secure internet as an autonomous platform layer for applications, products, and services.
The primary mission of the communities building blockchain is to protect your data and your privacy and to put control back in the hands of users. Blockchain-based applications counterbalance the power of the Big Tech companies that have been known to abuse their dominant positions as facilitators and middlemen to censor, limit, and unfairly extract value from their customers. For example, if your email account is hosted on a blockchain-enabled decentralized server, it can keep your communications private—rather than being mined by Big Tech in order to serve you advertisements, or blatantly sell your data to third parties. Blockchains provide robust rails for such privacy technology.
Blockchains are even able to mediate some of the risks of AI, democratizing the pipeline for AI models by making them open source, transparent, testable by software developers everywhere, and, as a result, inherently safer.
Blockchains allow citizens to fully and fairly participate in the economy. The possibilities range widely and are often surprising: from a weather company that turns local vehicles like drones, cars, or even tractors into weather sensors, compensating participants with a form of cryptocurrency or an app that unlocks automotive data to empower drivers to make smarter maintenance decisions or sell their car directly to others in the community at fair value.
And in an election year, blockchain has especially relevant applications. Smart contracts can serve as irrefutable proof of identity and on-chain activity, maintaining the integrity of the local ballot process. We can also rely on blockchain as the public record of provenance for intellectual property, which would help preserve the accuracy of verified news organizations and help mitigate the onslaught of misinformation that we saw four years ago.
Given all the current and potential benefits that the blockchain-based new internet holds for our people, economy, and society, it’s no wonder that crypto-native technology is suddenly finding bipartisan favor in Washington.
Government policies that support blockchain technologies, while providing guardrails to deter bad actors, will encourage the progress, innovation, and entrepreneurism that are inherent to our national ethos.
As Americans consider how their government can support a better future, the message from the blockchain community has never been louder: our government owes its citizens a commitment to keep our edge as the technical innovators of the free world.
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