Will the U.S. Roll out Blockchain Regulations in 2020?
Even in the world’s largest blockchain market, regulations are still underdeveloped. According to industry experts, this might change soon.
U.S. President Trump is “not a fan of Bitcoin.” He doesn’t seem to see much potential in blockchain either, as his proposed budget does not include any government investments in the technology at all.
Nevertheless, the U.S. is still by far the largest blockchain market in the world. In 2019 alone, American companies invested almost 1.1 billion US dollars in blockchain projects – about twice as much as in Europe and nearly three times as much as in China.
One reason why U.S. federal authorities have so far hesitated to explore blockchain on a larger scale is the association of the technology with cryptocurrencies. Especially after the clashes between regulators and Facebook’s Libra team, cryptocurrencies – and thus Blockchain technology – received a somewhat negative reputation.
Insiders expect regulatory changes soon
The lack of support for such a promising technology from the U.S. federal government is surprising, considering that the U.S. has been the world leader in adopting new technologies since the end of World War II. In the 21st century, however, there are many competitors, especially in the field of blockchain: In China, the central bank is about to issue a digital currency; and in Europe, national governments are initiating legislative changes to facilitate its further development. These legislative changes are necessary to provide the basis for innovation as most current legal regimes do not factor in crucial aspects of digital technologies.
Looking at the U.S., at the state level, legislators have taken different approaches, with states like New York, California, Wyoming, and Arizona leading the pack with progressive regulations. Asking industry insiders, the U.S. federal government might also initiate legislative changes soon. Jeff Barroga, CEO of the digital exchange Paxful, says in an interview with Cointelegraph that “more and more elected representatives are finally seeing blockchain technology in a positive light.” He also expects more pilot projects in the coming months.
He might be right – there are crypto advocates even in the president’s immediate environment – for example, his son-in-law and adviser Jared Kushner who invested in Bitcoin himself. Donald Trump’s White House Chief of Staff, Mick Mulvaney, also favored the technology and believes Blockchain could revolutionize the financial industry, the U.S. economy, and the administration.
Crypto has grown too big to be ignored
There are Blockchain-supporters in Donald Trump’s core team, but that might not even matter because he could be pushed out of office this year. Some of his possible opponents are more open to digital currencies, such as billionaire Michael Bloomberg. In his financial policy proposal, he writes: “Cryptocurrencies have grown into an asset class worth hundreds of billions of dollars, yet regulatory oversight still seems fragmented and undeveloped.”
Thus, regulatory changes might soon be underway – with or without Donald Trump. In principle, this should be a positive development, as Blockchain has now reached a market phase in which companies and investors need legal certainty – and the world’s leading economy will not want to fall behind.