When we founded Blockchain Association five years ago it was an open question whether or not the digital assets industry could make effective use of a trade association to argue its priorities in front of Congress and other federal regulatory agencies.
Kristin Smith is the CEO of the Blockchain Association.
Some of the most persistent questions in Washington D.C. at the time were whether crypto would still be around in a few years, rather than asking complex questions about market structure, taxing non-fungible tokens (NFTs) or if code is protected by the U.S. Constitution. While those issues are still up for debate, it’s clear that crypto’s staying power is not.
As Blockchain Association marks five years since its founding, it’s worth pausing to reflect on the past half-decade and look forward to the challenges that will likely define the industry’s success in arguing its case in U.S. capitol in the years to come.
From President Donald Trump’s anti-Bitcoin tweets, to meteoric market gains in and sobering losses, to the collapse of the Terra blockchain and then FTX – all overseen by an increasingly hostile Securities and Exchange Commission (SEC) that seems dedicated to pushing the American crypto economy offshore – the digital assets industry experienced major moments of disruption over the past several years.
Nevertheless, even amidst these dramatic moments, crypto adoption continues to grow. Multiple presidential campaigns have felt compelled to issue statements of support for the domestic digital assets industry. And even though the resultant reports are less-than-kind to crypto, it remains notable that the Biden administration felt the digital assets ecosystem was important enough to issue an executive order directing federal attention to study the technology and recommend responsible regulation.
What, then, will the next half-decade hold for crypto in Washington? It seems foolish to make any sound predictions given the cinematic ups and downs of the past five years, but there are several areas where the Congress, the White House and federal regulatory agencies will likely focus.
Money laundering pain points
The first, and perhaps biggest, long term issue relates to anti-money laundering (AML) efforts. While federal law enforcement agencies have become quite adept at tracking illicit transactions on blockchain networks, high profile cases such as the ongoing action against the developers of Tornado Cash demonstrate the salience this issue has across the government.
While some tech-driven solutions have recently been suggested to ameliorate the concerns of law enforcement while maintaining the pro-privacy protections of services like Tornado Cash, the AML issue is likely to persist as a pain point in the federal government’s general acceptance of crypto’s broader use.
Crypto-specific bills, pro-crypto politicians
The second issue is the most likely path to pass legislation through both the House and Senate, and into law. While crypto advocates were right to celebrate the milestone this past summer of multiple crypto-specific bills being voted out of their respective House committees, the now-pressing question of the fate of those bills in the House and then the Senate must be considered.
As the saying goes: personnel is policy, and it’s important to try to encourage pro-crypto thinkers to enter government service
Is there enough common ground between the current set of elected officials in these chambers to come to agreement on new crypto regulation? Time will tell as we watch this set of bills make their way to a full House vote, and perhaps beyond, but it’s a reminder that supporting pro-crypto candidates for office is the best, longterm strategy we have to change the congressional view of this technology.
We’ve come a long way over the past few years cultivating crypto champions, and we have a better sense than ever of how Congress as a whole thinks about crypto, but there is much more work to be done.
Regulatory sea change
Lastly, with a major election on the horizon, we address the known unknown of federal regulatory personnel. Depending on the outcome of the 2024 presidential election, there could be a sea change at the relevant regulatory agencies, bringing in fresh faces that may have more enlightened perspectives on the development, use and proliferation of digital assets.
Even if the White House does not change hands, recent legal losses at some of those agencies – most notably the SEC – may turn the tide and persuade those crypto antagonists that a different approach is needed as it attempts to corral the domestic industry.
Continued court losses may push staffers out of those agencies as they become frustrated being on the losing team, time and again. Either way, as the saying goes: personnel is policy, and it’s important to try to encourage pro-crypto thinkers to enter government service whenever possible.
5 years ahead
The past five years for the digital asset ecosystem hasn’t always been smooth – but it has galvanized the industry’s strong voice in Washington D.C. At the Blockchain Association, we’re proud to be that voice of the industry with an unwavering mission: to advance the future of crypto in the United States.
We’ll continue to advocate in Washington on behalf of our members – and the industry as a whole – for the next five years, and many more to come.
