Government Driven Efforts on Digital Asset Framework

Auther: PlatON James QU @Tokyo

Recording my notes after reading the FACT SHEET: White House Releases First-Ever Comprehensive Framework for Responsible Development of Digital Assets.

Roughly 1/5 adult Americans are investing in 3 trillion dollar crypto market is pretty much impressive, and the crash of TerraUSD remind me of the fear which eventually convinced me the consumer and investor protection is very important, especially under current situation where the gap is so hugh between crypto veterans vs Rockies in this not yet regulated area. Whether need regulation or not is a different topic I think, depends on how people get educated.

Education should be more important than regulation based on my personal view. Good education equipped people who can follow “don’t trust but verify” to avoid traps, those people can also be innovative and contribute more. I am a little bit worried about this article has put priority on regulation and protection, not on education.

For example the regulation bodies such as SEC and CFTC, they are keeping enlarge the team and focus with cost on below 6 topics

• Crypto asset offerings;
• Crypto asset exchanges;
• Crypto asset lending and staking products;
• Decentralized finance (“DeFi”) platforms;
• Non-fungible tokens (“NFTs”); and
• Stablecoins

I believe with enough effort from regulator team, the new regulation framework will be established. Wondering how to spend those effort on education, establish a sandbox, and have volunteers to teach, debate, test out, and educate with each other? Because from my observation, 10 years crypto history has far more innovations than 20 years regulated traditional financial industry. Another concern is a team of experts with traditional background carries too much legacy, like myself, easily to get bounded by regulatory friendly thinking, looping there and cannot innovate much. By calling the decentralized community builders into sandbox, regulator background experts could debate when they demo new ideas. A diversified env is crucial for innovations.

Let’s move on to “FedNow”, will that be a centralized settlement clearing infrastructure? And it is government driven? Any existing public chain can fullfil FedNow’s role? Noticed there will be government sponsored research on next generation cryptography, transaction programmability, cybersecurity and privacy protection, environmental impacts etc. It make sense, sponsor private sector to dive into them will be fruitful.

Here are the two samples highlighted, some of them are for global teams, some are limited to Ths States and British

1. https://regulationinnovation.org/techsprints/dc-regulatory-techsprint-on-aml-2/
2. https://www.fincen.gov/resources/fincens-innovation-initiative
3. https://petsprizechallenges.com/

Overall, it is a good sign having clear focus on financial, legal, technological, data privacy, financial stability, and human rights… Let’s verify later ;)