On February 25, Bitcoin Association Founding President Jimmy Nguyen joined a virtual panel for Albany Law School’s “Blockchain and Cryptocurrency: The Legal Framework and Future Trends” webinar.
The panel, moderated by Will Trevor, Albany Law School’s Assistant Dean and Director of Online Programs, covers a range of topics that lawyers, prospective lawyers, and any individual or business that needs to navigate the laws surrounding blockchain and digital currency would find useful.
Nguyen was joined by four other panelists, Albany Law School adjunct professor Debbie Hoffman, Ketsal PLLC partner Josh Garcia, Shutts & Bowen LLP partner Daniel Stabile, and Straight Up Capital founder and managing partner Sean Keefe.
The group of panelists begins by defining some of the jargon in the blockchain and digital currency industry, explaining what words like ‘blockchain’ actually refer to – particularly in a legal context – and the discrepancies between words that are commonly, and incorrectly, interchanged.
“Bitcoin, blockchain, and digital currency—the term I prefer instead of cryptocurrency—sound very new to people, but they really combine concepts that have existed for a long time,” Nguyen said. “Blockchain is simply a form of ledger, a record-keeping system to record transactions of payments but as we’ll learn today, also data, which can be used to create much more powerful business applications such as smart contracts or tokens of other assets.”
Hoffman concurred, saying that blockchain and digital currencies are not synonymous. She noted, “If you know nothing else about Bitcoin and blockchain cryptocurrencies, you should be able to tell the definition of the two are different.”
After setting the stage by giving the audience some clarity around what the industry-jargon refers to, the panelists fielded several audience questions that took a deeper dive into blockchain and digital currency legislation, such as if blockchain and digital currency are legal, how they are regulated, how successful the regulations are, and what good-uses for a blockchain are.
“Is it legal? When you ask that question, there are a lot of ifs or buts,” Hoffman explained. “There are laws all over the world that regulate cryptocurrencies in different ways. I think of money transmission laws because that’s kind of the most basic way to think about it, but there are all kinds of other laws that come into play: securities laws, taxation laws—if you can go through every different aspect of laws, there are different ways they can be applied. We don’t necessarily have a wide variety of guidance yet in the U.S.”
Daniel Stabile added, “Certain uses of cryptocurrency are illegal—you can’t use it to extort people. But I think more importantly, for the purposes of this discussion, is that different businesses that deal with cryptocurrency are regulated in different ways, depending on what they’re doing.”
“I think the overarching trend here is that there’s a recognition by the regulators that we’ve passed a tipping point and blockchain technology is in one form or another here to stay…Gradually, we’re starting to see more clarity.”
The panelists went on to discuss Janet Yellen’s comments about BTC being inefficient, if they believe there will only be one blockchain used in the future, how to get into cryptocurrency law when working at a law firm, and lastly, key trends that lawyers and non-lawyers should be looking at right now.
“If she’s referring to BTC, which is the dominant ticker symbol for Bitcoin that people see in the news—it’s the one that’s risen up 50,000 USD in value—it’s inefficient because the Bitcoin protocol developers that took control of that network chose not to scale the network, so it only does 7 transactions per second on average,” Nguyen said. “That’s why we have this proliferation of many other attempted digital currencies: because they kept the transaction capacity small.”
Sean Keefe offered a slightly different perspective, saying, “I think that Bitcoin is sort of the on-ramp for individuals and businesses to digital transactions. While it is definitely inefficient, let’s be honest: paper cash is also inefficient for transactions.”
Before ending the webinar, host Will Trevor asked the panelists which key trend should lawyers and non-lawyers look at.
For Hoffman, “Continued and innovative uses. Every day, those of us who are in the field see it and think, ‘Wow, who would have thought of that?’”
Garcia mentions non-fungible tokens (NFTs), saying, “It’s impossible to predict, but certainly in the near term, NFTs will affect the whole ecosystem and decentralized exchanges specifically for NFTs are going to emerge more.”
It’s decentralized finance for Stabile, who said, “Decentralized finance generally; removing financial institutions as an intermediary from financial transaction.” Keefe echoed this point, saying, “I really think what we’re seeing right now is the power of the internet and it’s fully globalizing what cryptocurrencies and blockchains are able to do.”
And Nguyen highlighted the power of data. He said, “All of those trends I think are good and key and they can all be encapsulated in one message that I think the audience should open their minds to: all blockchain and digital currency technology is igniting the power of data. The Bitcoin protocol is a data network protocol just like the IP protocol was created to power the internet… Once you open your mind to that, you can open your minds to all the great potential of blockchain and all forms of digital currencies.”
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