Governor of New Hampshire, Chris Sununu, announced that he’s creating a commission to evaluate the state of cryptocurrency and make recommendations on how it can be regulated while also fostering innovation.
Having spent the last six years engaged in the policy of digital assets, I have learned that the makeup of a commission determines the effectiveness of that committee. It is one thing to say that one aims to foster innovation, but it is another thing entirely to actually foster innovation.
In order for this commission to accomplish both goals and to simultaneously regulate an industry while promoting it the industry must have representation on the commission. Particularly in the world of digital assets, there are technical aspects that are truly difficult to understand if you haven’t been immersed in financial technologies. That isn’t to take anything away from legislators and bureaucrats. Some of the industry’s greatest advocates are legislators.
However, there’s a difference between understanding conceptually how digital assets work and functionally understanding the technology behind, for example, how an exchange operates or understanding how the custody of digital assets functionally differs from the custody of traditional assets. There are well-funded startups in the industry that don’t fully understand the task at hand. For that reason, the governor should have technical advisors related to the commission, even if they aren’t full members or voting members.
These advisors could be people who serve as resources to explain how ideas might work in practice. Even the best intentions don’t fully translate when enacted in the real world. We regularly see laws enacted with the intention of fixing problems, which result in chaos. Many of those situations can be avoided with the proper planning and expertise.
It is important to bring the best and brightest together when regulating digital assets. Blockchain technologies, which serve as the basis of cryptocurrencies, are transformational. They will fundamentally change the way we interact with our financial system. In fact, they are so fundamentally critical to our future that the vast majority of the world’s countries are exploring establishing their own CBDCs (central bank digital currencies), which would be digital assets backed by the government.
The best set of regulations would be based on how the industry works on the most intricate levels. It could be the difference between a commission that just produces a report and a commission that offers New Hampshire a roadmap into the future. I urge Governor Sununu to build a commission that will offer ‘the granite state’ a host of new opportunities in fintech.
Richard Gardner is the CEO of Modulus. He has been a globally recognized subject matter expert for more than two decades, offering complex insight and analysis on cryptocurrency, cybersecurity, financial technology, surveillance technology, blockchain technologies and general management best practices.
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