A Framework for an Intrastate Regulatory Safe Harbor / Sandbox
Technology is at its best when used to address fundamental human needs. While the internet represents a technological breakthrough of foundational significance, much of its potential to improve the human condition has not been realized.
Today, Blockchain technology is being hailed as the new internet. This technology provides a secure, transparent, efficient, and inclusive fabric for exchanging anything in real time. The challenge of this new internet technology is to improve upon the shortcomings of its predecessor by delivering concrete improvements to the lives of Californians.
To help Blockchain companies and pilot projects pursue this goal, California should institute an Intrastate Regulatory Safe Harbor and/or Sandbox. In the spirit of Opportunity Zones, this safe area of operation would allow Blockchain companies and pilot projects delivering certain public benefits to be granted regulatory exceptions, rights, and clarity for a specified amount of time, subject to investor protections.
Blockchain integration offers an opportunity for government and the broader economy to improve efficiency, transparency, and security, while democratizing resources in a variety of fields.
Potential Safe Harbor/Sandbox Areas: Financial Inclusion; Sustainability and Climate Change; Agriculture; Affordable Housing; Healthcare; Education; Homelessness; Water; Land Rights; Philanthropy; and Data Privacy.
Potential Regulatory Amendments: Clarifying securities designations, licensing for digital currencies, custodianship, investment policy, banking, money transmission, and more.
Grounding a regulatory framework for Blockchain technology safe harbor/sandbox provisions can help position pilot projects and incentivize entrepreneurs to prioritize public benefit at the onset of commercial implementation.
Value alignment with the new internet can help fulfill Blockchain’s promise as a technology — to directly improve the living conditions of all Californians.
As a member of the California Blockchain Working Group, I am seeking open dialogue and conversation with all emerging blockchain platforms in order to help create the proposed Safe Harbor/Sandbox rules for a California Blockchain Innovation Zone.