BitOoda Geopolitical Analysis, 4/27/2020: Policy Options to Advance the U.S. Digital Assets Market
Our recent assessments on the launch of China’s ‘digital belt and road’ as a key part of its overall economic strategy, increased attention on global CBDCs, and the path forward for the Digital Dollar have garnered a good amount of attention among our clients and partners. Several have reached out to ask us what should be done to address some of the issues we raised. While a full answer to these complex questions would require a book-length response, we did want to offer a snapshot of five actions we would recommend if the U.S. were to develop a coherent strategy to position the country as a leader in the formation of the future digital economy:
1. Move forward with the development of the Digital Dollar. Former CFTC Chair Chris Giancarlo’s recent op-ed laid out a roadmap and the need for this initiative, which we see as an essential component of any policy designed to maintain U.S. global economic leadership in the coming era of digital currencies.
2. Modernize the U.S. regulatory framework. Given (1) the differing views within Congress and its failure to advance the handful of digital asset-related bills that have been proposed, (2) the existing web of ambiguous jurisdictions among federal regulators that oversee some aspect of digital assets, and (3) the fact that U.S. securities laws and existing regulations do not adequately reflect the complexities of digital assets, we would suggest creating a new White House-led Task Force dedicated specifically to developing a government-wide plan for modernizing the country’s legislative and regulatory framework to fully integrate digital assets into U.S. economic strategy and policy.
3. Raise the profile and influence of industry associations. If utilized effectively, independent standard-setting organizations, such as ADAM, can serve as a critical link between industry and government, providing the ground-truth knowledge, in-depth expertise, and focused communications needed to enable a more successful public-private partnership at the national level.
4. Seek allies to build an alternative foundation to China’s national blockchain network and digital currency. Given the current momentum in favor of CBDCs, the U.S. should reach out to potential partners to support the development of a G7-led digital economic infrastructure that could serve as an alternative to a China-dominated future. In addition to Japan and South Korea, we would suggest engaging with India, where the Supreme Court recently struck down the banking ban on crypto exchanges, and which is developing a national blockchain strategy; given the size of India’s economy, its focus on technology, and its often-inharmonious relationship with Beijing, India could be an important counterbalance to the growth of China’s digital economic power.
5. Promote the maturation of the digital asset market infrastructure. U.S. regulators and economic policymakers need to enable U.S. firms to continue to develop an infrastructure that promotes the functioning of a fair and orderly digital asset market, facilitates and encourages the introduction of new and more forward-looking products and platforms, and provides effective but adaptable oversight of the delivery of services to institutional customers in a compliant and trusted manner.
We at BitOoda see it as part of our mission to drive the evolution of digital asset markets by continuing to innovate and introduce sophisticated financial instruments and strategies for institutional participants, and to deploy our deep expertise to advise clients and projects across the ecosystem. We appreciate the continued engagement as we offer our insights to customers seeking to follow the geopolitical aspects of crypto, and to policymakers seeking to improve the digital asset landscape.