2023 saw an unprecedented wave of regulatory action around cryptocurrencies around the world, but nowhere was the change more noticeable than in the United States. Preceded by an opening salvo in August 2022, when the Treasury Department imposed sanctions on Ethereum coin mixer Tornado Cash, 2023 saw one crackdown after another, from multiple SEC lawsuits against central exchanges, criminal charges against developers, and even a guilty plea of the industry. most prominent public figurehead.
The message is clear: any lingering doubts about the US government’s willingness to intervene in the sector have been put to rest. As we enter the new year and calls for regulation grow louder on both sides, 2024 is poised to be a turning point in crypto policy – for better or for worse.
To further gauge the state of affairs, CryptoSlate spoke with Nilmini Rubin, Chief Policy Officer at Hedera, whose current work places her in a unique position to provide insights. With a career that spans from the halls of Congress to the West Wing itself, Rubin’s extensive experience in policymaking and technology implementation places her at the confluence of blockchain technology, policy and global market trends.
Conversations
As a participant in several conversations on the Hill, Rubin provided some insight into the concerns lawmakers have, which are many and varied. “Some [policymakers] are just interested in learning the basic technology,” she says. “Others want to dive into the deepest parts of the technology and policy implications,” she continues, further explaining that concerns range from national security, business opportunities, environmental implications and more.
The global perspective, Rubin notes, appears different. “They look at it from a completely different framework. It’s more [about] What are the benefits in general and how do we limit the risks?” This approach, which is common outside the US, reflects a broader, more holistic perspective on blockchain technology. Policymakers in these regions tend to weigh overall benefits against potential risks, seeking a balanced position that considers both technological innovation and its societal implications.
In contrast, Rubin points out that U.S. policymakers often focus on how blockchain fits within current U.S. law and policy. This inward-looking approach is more about integrating new technology into existing frameworks than about reevaluating or adapting these frameworks to enable new capabilities. Rubin goes on to explain that discussing blockchain policy with colleagues in Asia, for example, often looks at how different regions such as Europe or Britain have addressed similar issues, indicating a more comparative and globally informed approach.
In explaining why U.S. policymakers may not adopt a similar global perspective, Rubin suggests it is largely a matter of focus. ‘They are really thinking about the United States. They think about their constituents,” she says. This constitution-oriented approach can sometimes limit the scope of their policy considerations to domestic affairs, potentially overlooking broader global perspectives or innovative approaches adopted elsewhere.
Applications
While many view the crypto space as a world characterized by high risks and hyperbolic expectations, Rubin emphasizes that Hedera operates from a position of real-world application, with little interest in the secondary market value of the token. It has so far found special applications in agriculture and carbon dioxide tracking, both of which not only have huge markets to serve but can also benefit from extensive capabilities for environmentally conscious business practices.
Rubin highlighted Dovu, a marketplace built on the Fonterra platform, which allows farmers to spend tokenized carbon credits. This innovation offers a twofold benefit: it provides farmers with a new revenue stream by monetizing the carbon sequestered in their soil and contributes to environmental sustainability. The process involves farmers planting crops outside their usual areas and receiving credits for the additional carbon capture. What sets this system apart is its transparency and accountability, as blockchain technology allows accurate tracking of where each carbon offset comes from, avoiding greenwashing.
Rubin emphasized that while the conversation around these technologies often focuses narrowly on the fluctuating values of cryptocurrencies as assets, the real value lies in what each asset does and what it is for. Regarding the market price of a crypto asset, Rubin says:
“That’s not what it’s about at all. The intention is that companies can flourish. It’s not about ownership. And so we want to show how people use the technology. The crypto is just a fuel to power the network.”
She explained that unlike the Web 2.0 model, which relies heavily on advertising for funding, blockchain technology (or, in Hedera’s case, hashgraph technology) operates on a different paradigm. It uses the smaller fees associated with the exchange of information as a financing mechanism. This approach not only has a global reach, but also requires rapid processing, for which cryptocurrency becomes a more practical tool than traditional currencies, especially when we consider the limitations of standard banking hours and transaction approvals.
2024 and beyond
Looking to the future, Rubin expresses moderate optimism about the progress of blockchain regulation in the US. She states, “I am hopeful that something will come through that will help advance the regulation of blockchain and cryptocurrency in the US.” Her optimism is based on growing awareness among policymakers and an increased level of discourse around crypto policy in Washington. However, she recognizes that things in Washington don’t happen easily or quickly, so her optimism is tempered with caution.
Until then, she and others must keep working to move the conversation forward where it counts. The intent, as Rubin outlined, is to highlight the broader utility and richness of blockchain technology for policymakers. The aim is to ensure that any regulations developed to govern this space are drafted in a way that recognizes and leverages the potential of the technology so that both consumers and businesses can benefit.
“We want policymakers to understand the richness of the technology so that the regulations they put in place can ensure that the technology benefits consumers. If they only think about it by addressing fraud committed by bad actors, they may be throwing the baby out with the bathwater. We definitely don’t want that to happen.”
There is a delicate balance to be struck in regulation: protecting against fraud and abuse by bad actors without stifling the innovative and useful aspects of the technology. In a year when headlines have been dominated by bad actors – and there has been no shortage of them – Nilmini Rubin and her colleagues remind US lawmakers every day not to lose sight of the technology’s many wonderful applications when the bad actors are swept away. away.