The year 2023 witnessed a slew of regulatory actions pertaining to cryptocurrencies globally, but it was the United States that experienced a seismic shift in its approach. With notable instances such as the Treasury Department’s sanctions on Ethereum coin mixer Tornado Cash in August 2022, the US intensified its crackdown on the crypto industry throughout 2023. This clampdown encompassed multiple SEC lawsuits against central exchanges, criminal charges against developers, and even the guilty plea of a prominent figurehead in the industry. The message conveyed by these actions was unequivocal: the US government is now resolute in its willingness to intervene in the crypto space. As the year 2024 commences amidst escalating calls for regulatory measures, it is poised to become a transformative period in crypto policy. To gain insights into the current state of affairs, CryptoSlate recently spoke with Nilmini Rubin, Chief Policy Officer at Hedera. Rubin’s extensive background in policy-making and technology implementation, spanning from Congress to the West Wing, situates her at the intersection of blockchain technology, policy, and global market trends.
Rubin emphasizes that the concerns voiced by policymakers encompass a wide range of issues. Some seek a basic understanding of the technology, while others delve deep into its intricate workings and policy implications. The areas of concern touch on national security, business opportunities, environmental implications, and more. Comparatively, the global perspective on blockchain technology appears distinct. Rubin observes that policymakers outside the United States approach the subject from a broader viewpoint, focusing on the general benefits and risk mitigation. This approach, prevalent in regions such as Europe or the UK, seeks a balanced assessment that considers both technological innovation and its impact on society. Conversely, US policymakers often concentrate on how blockchain fits into existing US law and policy frameworks. Consequently, their approach revolves around integrating the new technology rather than reshaping the frameworks to embrace novel possibilities. Rubin notes that when discussing blockchain policy with counterparts in Asia, there is often a comparative analysis of how Europe or the UK has dealt with similar issues, highlighting a more globally informed approach. This inward-looking disposition of US policymakers stems from their primary focus on their constituents and domestic concerns.
While the crypto space is often perceived as high-risk and characterized by exaggerated expectations, Rubin underscores that Hedera operates from a standpoint of real-world application and places little emphasis on the secondary market value of its token. Hedera has already found practical applications in agriculture and carbon tracking, both of which possess sizeable markets and stand to benefit from enhanced eco-conscious business practices. The example of Dovu, a marketplace built on the Fonterra platform, demonstrates the potential dual advantages. It enables farmers to issue tokenized carbon credits, thereby generating a new revenue stream by monetizing the carbon sequestered in their soil and contributing to environmental sustainability. Notably, this system prioritizes transparency and accountability by utilizing blockchain technology to precisely track the origin of each carbon offset and mitigate the risk of greenwashing. Rubin emphasizes the need to shift the conversation surrounding these technologies away from the volatile values of cryptocurrencies as assets and instead focus on their underlying purpose and functionality. She explains that the true value lies in how these assets enable businesses to thrive. Unlike the Web 2.0 model reliant on advertising for funding, blockchain technology, such as Hedera’s hashgraph technology, operates on a distinct paradigm. It leverages lower fees associated with information exchange as a funding mechanism. This global approach necessitates swift processing, making cryptocurrency a more practical tool than traditional currencies, especially considering the limitations imposed by standard banking hours and transaction clearances.
Looking ahead, Rubin expresses measured optimism regarding the advancement of blockchain regulation in the US. She believes that progress can be achieved as policymakers become increasingly aware and engage in elevated discourse on crypto policy in Washington. However, Rubin acknowledges that the path to change is neither easy nor swift in the realm of policymaking. As such, her optimism is tempered with caution. She and her counterparts must continue their efforts to shape the conversation in critical avenues. Their objective is to elucidate the widespread utility and potential of blockchain technology to policymakers, ensuring that the resulting regulations acknowledge and harness its capacity to benefit consumers and businesses alike. Rubin underscores the importance of policymakers appreciating the richness of the technology in order to develop rules that facilitate this consumer-centric vision. In the pursuit of safeguarding against fraud and misuse by bad actors, regulations should strike a delicate balance that fosters innovation without stifling the beneficial aspects of blockchain technology. Against a backdrop dominated by negative actors, Rubin and her colleagues serve as constant reminders to US lawmakers to not lose sight of the countless positive applications of blockchain technology.
As the crypto landscape rapidly evolves, US policymakers are facing crucial decisions that will shape the future of the industry. With Nilmini Rubin’s insights into their concerns, perspectives, and the broader potential of blockchain technology, policymakers are better positioned to navigate the complex terrain and develop regulations that enable innovative solutions while protecting the interests of consumers and businesses. The year 2024 will shed further light on the trajectory of crypto policy in the US and determine whether it fosters growth or poses unnecessary obstacles.