A Turning Point for Web3 and, Perhaps, Democracy
Today’s Executive Order on digital asset policy represents a landmark for the web3 community. It signals a long-term commitment by the White House to support innovation and American leadership in the space, and — at a moment when democracies are facing unprecedented challenges — it moves web3 closer to realizing its potential as the next generation of a more open, democratized, decentralized internet. It also marks the culmination of an extraordinary amount of work.
In October, we issued a call for a national strategy to develop web3 technology. We saw the need to bring intention and order to a fragmented regulatory landscape and jumpstart a long-overdue debate around how open societies should use technology. Over the last five months, we’ve engaged with hundreds of stakeholders in industry, government, and civil society with the goal of moving that conversation forward.
As is often the case in policy, progress comes slowly, then all at once. Today, as democracies confront the greatest threat to global order in this century, we had a breakthrough. The Executive Order will inaugurate a serious, sustained discussion about how to build the policy architecture of a better internet. This is a debate Americans deserve.
That conversation can’t start soon enough. Democratic institutions are struggling to meet the challenges imposed by the pandemic and recovery. By their own numbers, federal agencies made $281 billion in improper payments in FY 2021. That figure doesn’t include an estimated $70-$400 billion that went missing from COVID-19 relief programs. Meanwhile, our current anti-money laundering regime costs $30 billion annually while failing to prevent an estimated $300 billion of illicit transactions. It would be tough to design a system with more failings than the status quo.
Web3 represents a more efficient, accountable alternative to broken legacy systems. In time, it could provide the digital infrastructure needed to power true stakeholder capitalism, helping to align incentives, ownership, and governance in ways that generate better outcomes for our communities. The opportunity to build that future is too important for the United States — or other open societies — to ignore.
Democracy rests on a shared commitment among citizens to work together, and in this regard the EO achieves something significant: it provides an informed directive from the President himself for government, the private sector, and civil society to consult and collaborate in order to get web3 right. We are eager to work with the Administration and Congress to achieve that goal.
The struggle unfolding in Ukraine has reminded us of the stakes. Last fall, after extensive deliberations, the Ukrainian government became one of the first in the world to embrace web3. Since the Russian invasion, officials in Kyiv have received more than $60 million in digital assets to purchase MREs, bulletproof vests, and night vision goggles to defend their nation. (This is more than the $54 million in assistance initially pledged by USAID.) An NFT auction using the Zora protocol raised $6 million to aid Ukrainian civil society. The Arweave blockchain harnessed its immutable architecture to preserve records of war crimes for future prosecution and protect vital records from Russian attacks. In just days, these technologies have emerged as important implements in the arsenal of democracy, and the web3 community is working with the government of Ukraine to do even more.
As web3 proves its worth in Ukraine, the Executive Order will provide a framework for bringing its transformational benefits to the United States and other democracies. Realizing the potential of these technologies will be a generational undertaking. It will require sustained effort, investment, and collaboration across all sectors of society. But the opportunity to build a better internet just got real.