There were two obvious themes from the recent U.S. Senate and House of Representatives hearings regarding Libra (highlights by TechCrunch):
- our leaders have serious concerns about Libra, specifically because Facebook is involved, and more importantly, and
- our leaders realize the massive implications Libra and blockchain technology have in challenging the dominance of the U.S., both from private enterprise and foreign governments.
Regulators around the world had been dragging their feet in providing clarity and guidelines to blockchain ventures. One of the big accomplishments for the Libra project is that it has put regulators on alert and will force them to move faster. After the announcement of Libra, the blockchain ecosystem grasped the attention of President Trump, Treasury Secretary Mnuchin and Federal Reserve Chairman Powell. Libra has significantly reduced our internal timeline for regulatory clarity and mainstream adoption. The “wait and see” approach is not possible anymore and the reaction proves that authority figures realize that blockchain disruption can no longer be ignored.
One key point regulators need to keep in mind is that the U.S. will be at a serious disadvantage if it over-regulates or works to stomp down the growth of blockchain technology. Not only will there be capital and talent flight to friendlier jurisdictions, but the global dominance of the U.S. could be seriously challenged. Russia, China, and Iran are among the many countries developing blockchain ecosystems to challenge the U.S geopolitical dominance. Many of our leaders are just now realizing that the U.S. will miss out on significant economic benefits and lose geopolitical control if it does not promote blockchain innovators by providing support and regulatory clarity.
Libra will force governments around the world to act and clarify their stance on blockchain technology. In the long-term, the ecosystem will thrive with regulatory clarity whether positive or negative regulation is adopted. Investors and entrepreneurs do not like uncertainty and it is much better to get a “no” than a “maybe.” If governments say “no,” there are dozens of jurisdictions around the world that welcome or will welcome blockchain ventures, but a “maybe” keeps everything on the fence and stifles innovation.
We will likely look back at this time and realize, this is when everything changed. Leaders around the world must pick a side and as history has shown, pushing back on innovation rarely ends well. All things considered and regardless of the regulatory action taken in the U.S., blockchain technology will be an important part of the future and will disrupt everything from banks to government institutions.
Disclaimer: This is not an offering or solicitation. This is not investment, tax, legal, financial or any other type of advice. Please perform your independent research and due diligence.