Episode 30: Bringing Policymakers and Blockchain Together

In this unique episode, Andrew and Fahad speak with Kristin Smith, Executive Director from the Blockchain Association in Washington D.C. They dive into blockchain, cryptocurrencies, and how policymakers are addressing emerging technologies.

Hosts: Fahad Shoukat and Andrew Wolfe

Today's Guest: Kristin Smith, Executive Director of Blockchain Association

Kristin runs the Blockchain Association, where she leads the crypto industry’s development of a strategic roadmap for public policy. She is an experienced policy professional, with senior-level experience in both House and Senate offices as well as private sector experience advocating for companies in the telecommunications, Internet, and other tech-focused industries. Kristin holds an MBA in Finance from NYU’s Stern School of Business and a graduate degree from Georgetown University.

The Blockchain Association is a trade association representing the interests of the open blockchain and cryptocurrency industry before Congress and policymakers in Washington D.C.

Our guest in this episode is the Executive Director of the Blockchain Association, Kristin Smith. Interacting between public policy and disruptive technology, such as cryptocurrency, is an exciting place to be because the policies haven't been built yet and the dynamic is continuously changing.

The work that the Blockchain Association is doing is so important because this technology is really complicated. When dealing with non-tech background policymakers, it's important to have a voice in the room who is able to communicate the key ideas in a way that people understand. If we want to get a better public policy that supports the development of this technology, you have to show up, present ideas and ask for help. Having a trade association here on the ground is important for the companies that came together to launch it.

Concerns about Blockchain in the Public and Private Sector

  • When it comes to Blockchain itself, it's got a good reputation. However, when you get into open blockchain networks fueled by cryptocurrencies that flags are raised.
  • Before Facebook announced Libra back in the summer, there weren't many policymakers taking the technology seriously. After that, they realized that big companies that we trust or don't trust are getting into the arena. All of a sudden it was real and they realized they would have to address it. Some have concerns and are addressing them through legacy policy ideas, others are approaching it through a fresh lens.
  • There's been a shift this past year where people are realizing the potential of technology and even though it's not figured out, they're ready to dialog about it to ensure that consumers are protected, but the US is staying competitive.
  • Blockchain is well received in the private sector, but there are concerns especially when it comes to regulations. There is faith in the technology, but they are running into this roadblock of not knowing when or what regulations apply.

Politics and Blockchain

  • Emerging technology doesn't come up too often on the campaign trail. The Blockchain Association does outreach to different campaigns to help educate politicians.
  • On the Presidential level, there are a handful of candidates who say positive things about blockchain and crypto. Andrew Yang accepts crypto distribution and talks about the importance of creating policy to foster the technology. Tulsi Gabbard co-sponsored legislation which would help the industry get clarity.
  • We want the US to be competitive. It's what's going to drive the next big wave of innovation. Everyone running for a political office wants the US to be an economic force in the world. There's also good messaging about reducing reliance on middlemen and making things more efficient, opening up not only financial services but web platforms to more competition and access. We're working and doing outreach to make sure campaigns have what they need to make an informed decision.

Emerging Technology and Regulation

  • Automation is an age-old concern. People fail to understand that automation opens up new opportunities in these  concentrated areas. New tech like crypto and AI opens up the possibility of innovation. We're hopeful that it opens up a new economy that gives more opportunities and provides a variety of needed services.
  • AI is scary for people because it's easy to see how people could be replaced, but having applications of AI built over data will hopefully lead to new innovation and make things better for everyone.
  • Tech mantra stated by Zuckerberg, "Move fast and break things." Tech people don't often think about policy. That mantra does not sit well with policymakers in DC. They want to think and debate and then maybe act later if it's necessary. There's a natural tension between the tech industry and Washington D.C.
  • Tech leaders must acknowledge this about policymakers, we have laws for a reason. You can't have total disregard for the government and goals.
  • Ultimately, it's a conflict of speed. Tech companies want to move fast, policymakers are on a different time schedule and it's difficult to figure out.  For example, there have been multiple bills introduced to stop the progress of Libra.
  • 3 companies disrupting the industry and not really getting punished for it:

                1. AirBnB

                2. Uber

                3. Scooters

  • This quick take-over strategy worked for them because people were looking for those solutions - cheaper, faster rides, unique places to stay. When something is able to get out there quickly, it's hard to push it back into the bottle.
  • It gets more complicated with tech, blockchain, and crypto because the timelines are longer. There are crypto things in the works now, but it takes years to build. You can't just launch and instantly have a lot of users.

Attitudes Toward Crypto

  • Different cryptocurrencies have different functions. There are a handful of dollar-backed stable coins. These are crypto tokens where there is a reserve that holds a dollar for every digital dollar issued. The technology marketplace has already created a solution to keep the US dollar strong.
  • There can be a world where you can have the benefits of crypto and the dollar. There are so many other things that crypto networks can do too.
  • Stable-coins will be the bridge to bring blockchain together. Libra has really forced that conversation. We are quite a few years off from technology that really threatens the dollar.
  • We'll see more measures in place to protect consumers. There are regulations in place for the crypto-futures market, but not a lot of federal regulation over the crypto-spot markets.

Protecting the Blockchain Industry

  • Criminals are typically the first to exploit an industry. The financial crimes Enforcement network made it clear that certain on-ramps and off-ramps were subject to anti-money laundering rules.
  • For lawmakers on the Hill who don't understand the technology, the easy thing to do is talk about the negative. Even though there are a lot of rules in place to go after the bad guys, it's still a theme that comes up frequently with lawmakers. The key is to create the policy we need without stifling the innovation we want in this space.

Looking Ahead

  • 2020 could be the year we start to see thoughtful, comprehensive proposals introduced, debated, and considered.
  • On the industry side, we hope to see some of these projects launched where lawmakers have the "ah-ha" moments to help fuel their needs.
  • Blockstack out of New York is really exciting. Application platform based on the idea that users can control their own information as they interact with different applications. It protects consumer privacy. Policymakers are really concerned about that. This technology could solve a lot of existing problems.

Build Thoughtful Software
Fahad Shoukat
Written by

Fahad Shoukat

Fahad has a B.S. in Electrical Engineering and an MBA. He brings over 15+ years in Business Development, Strategy, Sales, Product, and Marketing in various industries such as software development and Internet of Things (IoT). His experiences have led him on an unwavering pursuit to meet thoughtful people and build thoughtful software.