One of the cryptocurrency industry’s biggest challenges is the lack of unclear regulations. This is often exacerbated by the lack of a unified message to regulators within the cryptocurrency industry. Some of cryptocurrency’s major players now think they have the answer, creating the so-called Blockchain Association, a lobbying group based in Washington, D.C.
The Formation Of The Blockchain Association
A group of heavy hitters in the cryptocurrency industry has created the Blockchain Association in an attempt to create a unified voice directed at politicians and regulators in America’s capital. This regulatory-focused group includes Coinbase, Protocol Labs, Circle, Digital Currency Group, and Polychain Capital.
The formation of the Blockchain Association was inspired by the lack of a clear, unified message from the cryptocurrency and blockchain industry. Industry insiders often disagree on what form of regulation will be beneficial toward cryptocurrencies and blockchain or if the industry even needs government regulation at all. Insiders often fail to provide a clear message to lawmakers and regulators as a result of this issue.
The Blockchain Association’s goals include educating politicians and the public about what cryptocurrency and blockchain can and can’t do. For instance, lawmakers often misunderstand what cryptocurrency is, which leads to statements that indicate that they have entirely missed the point. Brad Sherman, for instance, called for a ban on cryptocurrency mining and trading last July and was promptly piled on by impassioned crypto investors.
Will Law And Regulatory Action Stifle Innovation?
This lack of understanding among politicians has led to concern that lawmakers and regulators will stifle innovation. The Blockchain Association will likely have to combat propaganda and false information spread by opponents of cryptocurrency and blockchain that include big banks and even some federal regulators.
Regulators are especially concerned about fraud, money laundering, and funding of criminal and terrorist organizations. A recent study has shown that most terrorist activity is funded by cash instead of cryptocurrency, but this has not convinced financial and political leaders who are convinced that the relative anonymity provided by cryptocurrencies are actually helping criminals.
Patent law might also scare off some cryptocurrency insiders who worry that it will be used to establish a monopoly. Some startups like Power Ledger, for instance, will probably hesitate to expand into the US market because Walmart has received a patent for using blockchain to manage the buying and selling of electricity. Any serious lobbying group will have to address issues like existing patent law that could be used to stifle healthy competition and incentives to innovate.
The Blockchain Association could consider expanding its role to not only educate lawmakers and the public about blockchain, but to also challenge existing intellectual property law to ensure that it isn’t misused by large corporations like Walmart. It could also reach out to organizations like the SEC and CFTC, leading regulatory bodies in the U.S. to help create regulations that allow enough freedom for startups that may not be able to afford expensive attorneys to operate. (It’d be nice to reduce bureaucracy and paperwork too.)
The Blockchain Association will likely face the uphill battles of misconceptions, anti-blockchain propaganda, and existing laws and regulations that could be used to stifle innovation and competition in the blockchain industry. However, it’s a good start because it has the potential to create a much-needed unified message to lawmakers and regulators who often seem baffled or threatened by this up and coming technological advancement.