Crypto Infrastructure and the Internet Age

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This episode of Money Reimagined takes the discussion home for an inside look at how new, disruptive technologies and governments interact. This discussion will be joined by hosts Michael Casey and Sheila Warren from the World Economic Forum and Marvin Ammori, who is best known for his work on questions of net neutrality and internet freedom. Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission and founding director of the Digital Dollar Foundation, rounds off the panel.

“My background is really 20 years of work on the internet,” said Marvin Ammori. “And I remember in the early days of the internet a kind of deja vu popped out for everyone. The internet started with all the bad stuff. Congress couldn’t believe that there was porn on the internet. We had to protect the kids from the number one that people noticed on the internet.

“And indeed, the first big case on the internet had the [U.S.] The Supreme Court upheld Congress’s action. Just about any website would have needed to get your credit card number and verify that you are 18 years old to proceed. The internet would have been for adults only. ”

Marvin continued, “The whole development of the Internet would have been different, but luckily the Supreme Court has been pushing back on Congressional action under the First Amendment. But the first impulse from Congress 20 years ago with the internet was, “Let’s paralyze this thing.” […] We saw all the tremendous benefits, things that we could never have imagined back then. When it comes to cryptocurrency, we see something similar. “

See also: A Battle for Bitcoin’s Soul with Jill Carlson and Raoul Pal

“The first wave of the Internet was an information Internet. Interestingly, this developed into a federal regulatory structure that was really a pretty easy zone because of our First Amendment protection of freedom of expression, ”said former CFTC chair Christopher Giancarlo. “So the internet didn’t offer much resistance in the first case, I think. Marvin is absolutely right. There were certainly calls in Congress to ban pornography, but at the end of the day the President’s Democratic White House [Bill] Clinton [and] The Republican Congress under Newt Gingrich came up with the approach “do no harm”.

“And the internet blossomed and many of the lessons were,“ Don’t ask permission, ask forgiveness, ”“ Keep going until you break something. ”And the first wave of the internet, the information wave, flourished quite successfully.

“We are now in a new construct that we are actually talking about, the Internet of ‘Valuables’, whoa … Well, it’s a completely different construct. We have at least three federal bank regulators who regulate the inventory of people’s valuables, market regulators in Washington. And then at every state level.

“And so this new wave of the Internet does not encounter a regulatory light zone. It actually runs into a regulatory heavy no-go zone. And we saw the collision. I mean just look at these [initial coin offering] Challenge a few years ago. This was a statement from one regulator that they haven’t given a floor to this new internet of value. [… It’s] A product of our past and our approaches and our constitutional freedoms, but also these new technologies, new waves and the Internet, old constructs face new challenges that we have not often worked through successfully. “

On December 18, the U.S. Treasury Department released a proposal to expand the Financial Crimes Enforcement Network’s requirements for identity surveillance and reporting by crypto exchanges. Under these proposed new rules, this powerful agency known as FinCEN would require an exchange to collect names and home addresses from the owners of private, self-managed digital wallets that receive more than $ 3,000 worth of cryptocurrencies every day, and special reports on Submit currency transactions to any wallet that receives more than $ 10,000 per day.

The announcement sparked criticism from the crypto community and digital rights activists. Many saw it as an attack on privacy. As of this recording, more than 7,500 comments have been posted on the FinCEN website. This is more than two-thirds of all public comments the agency received on various rules and proposals from 2008.

Then, on Monday last week, the Office of the Currency Auditor, which sets and coordinates federal banking rules, offered a rule change that was much more favorably received in the crypto community.

The OCC said banks could now use stablecoins to conduct payments and other activities, including stablecoin tokens issued on public blockchains like Ethereum. There have been some breathless comments on how integrating the old world of banking with the new world of decentralized finance is paving the way for a new global financial system of programmable money.

To many, this seemed like an odd routine for good and bad Washington cops. Is the Trump Administration for or against crypto?

But for Michael Casey there is a lot more coordination here than you think.

“There’s a common theme about how both rules fit into geopolitical tensions that digital currency technology is stirring up. We’ll discuss later this week why one of our guests today is Christopher Giancarlo, former chairman of the Commodities Futures Trading Commission, now Senior Counsel at Willkie Farr & Gallagher and, among other things, founding director of the Digital Dollar Foundation. As someone who knows the ropes in Washington and ponders how the US should prepare for a world of digital currencies, what he learns will be invaluable.

“The other question that arises is, how can we forge a more constructive relationship between the crypto community and policy makers, not just in the US but in the global environment where this technology exists?

“For this we brought in Marvin Ammori, the Chief Legal Officer for the decentralized exchange protocol Uniswap. Not only does this role give Marvin a solid foothold in the regulatory concerns of the crypto community, but we believe his previous influential work for the internet tech industry developing a common framework for net neutrality laws contains real lessons on how to do it Doing things right. And as an influential activist for digital civil rights, questions of privacy and digital autonomy are right here in his wheelhouse. “