Crypto regulation is coming soon to the U.S. There were 96 crypto-related bills introduced throughout the U.S. in the first six weeks of 2022. On March 9th, President Biden signed an executive order on Ensuring Responsible Development of Digital Assets. The executive order signals the Federal government will engage comprehensively. The Order lays out a national policy for digital assets across six key priorities:
consumer and investor protection;
U.S. leadership in the global financial system and economic competitiveness;
Already, lobbying efforts in crypto have heated up. According to a recent study, companies that engage in crypto-related businesses spent at least $4.9 million in lobbying in 2021, up 116% from 2020.
One of the unique lobbying efforts is from the new Lobby3 DAO. It was started by Andrew Yang, a former U.S. Presidential candidate known for championing innovative political ideas. Lobby3 aims to bring the voices of the Web3 community to Washington DC. It also aims to provide greater transparency to the process. Lobby3 token holders will be able to vote and influence which policy ideas and strategic directions Lobby3 takes. So far, the DAO has raised 120 eth (approx. $360,000). The DAO’s goal is to raise 3 million to set up a national advocacy infrastructure.
The novelty of cryptocurrencies requires novel regulatory policies. It has long been clear that applying securities regulations from the 1930s is ill-suited. But it is unknown what final crypto rules or regulations may develop. One thing for sure is there are numerous federal agencies involved across the complex web of U.S. financial regulators. It will also take some time to finalize. For most federal regulations, the rule-making activity involves a several-step process before rules are concrete.
The stakes are high with regulations on cryptocurrency. We are about to enter an age of global monetary competition, where national currencies must earn their place in someone’s wallet portfolio every hour of every day, even among citizens of their own countries, as pointed out Parag Khanna and Balaji S. Srinivasan in the Foreign Policy article Great Protocol Politics. Bitcoin has already proven itself as decentralized and global. Aggressive U.S. regulations on bitcoin and cryptocurrency would push innovation outside the U.S., but no regulations could make it difficult for the mainstream users to differentiate the legitimate projects from scams.