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Internet "should be a place where the government makes every effort … not to hinder it, so as not to harm it," said former President Clinton in 1997.
That was a precursor statement to the release of a seminal report from the US government, called Global framework for e-commerce. His central thesis was known as the "Do no harm" policy. It consisted of specific recommendations for not taxing, regulating or limiting the (hence) embryonic and key promise of the Internet: global e-commerce.
Not only did the report prescribe US policy, it also called on all countries in the world to consider the same approach, because it was understood that electronic commerce had no boundaries, so its success was interdependent with global cooperation.
Previous historical
Although more than 20 years old, that relationship is a fascinating reading as a context for the normative drama that is unveiling around the blockchain today.
Had it not been for this policy, the United States could have created new taxes for e-commerce, limiting it with new regulations, imposing duties, limiting the type of information transmitted, controlled development standards and licensing requirements imposed on service providers. Rightly, none of this happened.
Without a doubt, that position was the right call. What followed this period was a massive explosion of growth in the United States over infrastructure, Internet technologies and applications, probably a significant factor that helped explain why the United States suck the superpowers in Internet-related activities. , before the other countries.
For the context, here are some noteworthy highlights of the report.
"With the expansion of the Internet, many companies and Internet users fear that some governments impose extensive regulations on the Internet and electronic commerce.
Governments can have a profound effect on the growth of Internet commerce. With their actions, they can facilitate electronic commerce or inhibit it. Knowing when to act and, at least important, when not to act, will be crucial for the development of e-commerce.
We should not, for example, assume that the regulatory frameworks established over the last sixty years for telecommunications, radio and television are adapted to the Internet. Regulation should only be imposed as a necessary means to achieve an important goal on which there is a broad consensus. Existing laws and regulations that may hamper e-commerce should be reviewed and modified or eliminated to reflect the needs of the new electronic age. "
Fast forwarding until 2019. Enter the blockchain.
Do or do not damage?
The analogies are surprising, but the US government and the main regulatory bodies are late in decisive action. They are not recognizing that the blockchain shares features similar to the Internet and e-commerce of the mid-1990s.
Today blockchain technology is still immature, so it needs to further enlarge its wings before being prematurely confined to a lower impact environment.
Two years ago, in April 2016, the CFTC commissioner J. Christopher Giancarlo (now the president) he gave an illuminating speech at the 2016 DTCC Symposium where he challenged regulators to take Internet lessons into account and adopt a similar policy stance as set out in the 1997 Global Electronic Commerce Framework. He also suggested that regulators of all parties meet and agree principles ", a brilliant idea.
Here are some key passages of that speech:
"Regulators have a choice in this sense." I believe we can follow a regulatory path that weighs on industry with multiple expensive regulatory frameworks or one in which we meet and establish uniform principles in an effort to encourage investment and development. innovation of distributed Ledger technology.I prefer the second approach.
Likewise, "do no harm" is the right approach for DLT. Once again, the private sector must drive and regulators must avoid hindering innovation and investment and provide a predictable, consistent and direct legal environment. We need to avoid prolonged regulatory insecurity or an uncoordinated regulatory approach, as well as the rigid application of existing rules conceived for a "past technological era".
Unfortunately, judging by what actually happened from that speech, President Giancarlo's calls fell on deaf ears or were not taken seriously; and not from a lack of goodwill on his part.
Not surprisingly, the biggest winds against it came from the Securities Exchange Commission (SEC), which took it upon itself to be the Grinch of the blockchain regulation. They stole the lion's share of the normative thunder, while throwing the baby with the bath water.
The Blockchain regulation is at risk of a "Do Harm" outcome, based primarily on the SEC approach.
Ray of hope?
More recently, on December 20, 2018, members of Congress Davidson and Soto presented a new account, the taxonomy law of tokens (H. R. 7356), "To change the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security, to direct the Securities and Exchange Commission to implement some regulatory changes regarding digital units guaranteed by public-key cryptography. . "
That bill introduces a ray of hope that could potentially put a stick in the rays of the senseless SEC trajectory.
Instead of driving with hope, optimism and openness, the SEC has instilled fear in the markets by issuing a series of mixed actions, publishing unclear statements and sending cryptic messages through occasional speeches. They divided and conquered the blockchain industry by tightening the participants, without sharing any original thought.
The SEC is stuck in the old paradigm of trying to classify all the special cryptocurrencies (ie tokens and an invention key blockchain) as default titles, despite being nebulous about what actually is a non-security.
At the macro level, the opposite of what happened in 1997 is currently being destroyed. In 1997, the United States led the world in thought and practice, related to the regulation of electronic commerce. Today, other nations are taking a leading role in adopting progressive policies and regulatory implementations for blockchain technologies.
For example, the Japanese Financial Services Authority (FSA) has already received 190 cryptocurrency exchange licenses applications, and is currently reviewing them. Switzerland has published a well-defined one token classification framework and continues to be a friendly jurisdiction for the "foundation" model to govern ICOs, having cracked the code on how to manage the process. Singapore, Gibraltar, Malta and the Cayman Islands, although minor jurisdictions have taken positive steps and are welcoming entrepreneurs with open arms.
This outburst of international activities is sending US innovation to foreign countries. Unfortunately, the United States, known for the best technology boot ecosystem, finds itself handicapped and suffocated by hostile regulatory actions. These other jurisdictions have a legal advantage, but they fail to replicate the liveliness and depth of experience in the US business environment.
The SEC could use a history lesson by reviewing the Global framework for e-commerce and its impact. By his own admission, incoming President Clayton noted that he was not asked about the blockchain during his confirmation hearings in March 2017, using that point to remind us of the novelty of the topic as an excuse for the slow inertia of the SEC with it. Meanwhile, the SEC continues to paint the industry with a broad brush, while not showing flexibility for change.
On the contrary, the CFTC, which had a considerably more advanced knowledge of the subject, is still trying to find out more and has recently published a RFI by making 25 questions on ethereum, the second most significant cryptocurrency after bitcoin.
When will the United States assert its global blockchain leadership? Time is ending.
Image of the US flag through Shutterstock
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