Prominent cryptocurrency and blockchain companies have created a new lobbying group in the United States called the Blockchain Association. The group plans to advocate for industry-friendly laws and increased acceptance of cryptocurrencies, which have long suffered from a reputation for illicit activity and fraud.
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Big Names in Crypto Look to Advocate for the Industry
The Washington, D.C.-based trade association says it will advocate for blockchain- and cryptocurrency-friendly laws and work to educate the public and media on the benefits the technology provides. It has industry heavyweights Coinbase, Circle, Digital Currency Group, Polychain Capital, and Protocol Labs as founding partners, and will open the door to new members in the future.
The group made the announcement on their blog, saying that:
“Our objective is to create a pro-innovation environment for the industry, meeting the growing global demand for accessible, transparent and democratic financial and technical systems. To do that, we’ll foster collaboration between the community and industry leaders, educate policymakers and the public on the benefits of blockchain and related technologies, and advocate for public policy that cultivates and enables innovation and improves lives.”
The group also announced it had hired Kristin Smith, who previously worked as an aide to the former Republican Senator from Maine, Olympia J. Snowe. Smith previously lobbied on behalf of online retailer Overstock.com, which began accepting bitcoin payments in 2014.
The Blockchain Association will be the first lobbying group in the American capital to represent the businesses who are developing blockchain technology, which was popularized by the cryptocurrency bitcoin but now has applications in other fields. The Coin Center also works on similar issues, but is more of a think tank and research center than a lobbying group.
Reversing Negative Conceptions of Cryptocurrencies
It’s telling that the group named itself the Blockchain Association instead of the Cryptocurrency Association, as the latter has a decidedly unsavory ring to it amongst the public and in some influential circles. Warren Buffet famously called bitcoin “rat poison squared,” and his partner Charlie Munger said it was equivalent to trading in “freshly harvested baby brains.”
New York University professor and economist Nouriel Roubini has also been a vocal opponent of cryptocurrencies, saying in a debate with Ethereum co-founder Joseph Lubin that a token-based financial system, like many altcoins have proposed, is like going “back to Stone Age of barter” and calling proof-of-stake “vaporware.”
It should be noted, however, that the reputation of bitcoin and other cryptocurrencies has improved over the last year, at least among some, with the entrance of regulated bitcoin futures and investment from traditional financial institutions.
Blockchain Just Sounds Friendlier, Though It May Not Be Accurate
All the same, the term “blockchain” still has a more wholesome sound to it, even though, upon closer inspection, most of the members of the Blockchain Association are firms whose business relies upon the trading of cryptocurrencies. With the exception of Protocol Labs, all of the Blockchain Association’s founding firms are involved in promoting cryptocurrencies as financial assets. Coinbase is one of the largest crypto exchanges in the U.S., while Circle is a mobile payments network that is backed by investment bank Goldman Sachs and cryptocurrency mining manufacturer Bitmain.
The CEO of Digital Currency Group, Barry Silbert, previously founded SecondMarket, which allowed for the trading of restricted securities in public companies. Silbert later sold SecondMarket to Nasdaq before going on to found Digital Currency Group. The company maintains a broad portfolio, having invested in Coinbase, digital currency investment firm Grayscale, and bitcoin development firm Blockstream, among many others.
Without the cryptocurrency angle, blockchain technology is just another kind of database system. And given how the U.S. government has taken a light-touch approach to even highly influential technology firms such as Facebook or Google, it doesn’t seem like a variant of a widely accepted technology has much need of a voice in Washington.
With Crypto Fraud Continuing, Can Lobbying Turn Things Around?
This week, the American Securities and Exchange Commission (SEC) announced that it was taking enforcement action against hedge fund Crypto Asset Management LP for operating as an unregistered investment company while falsely marketing itself as a the “first regulated crypto asset fund in the United States” last year. That news follows multiple enforcement actions and criminal investigations in recent years by the SEC and regulators around the world against financial scams based around cryptocurrencies.
It remains to be seen how effective the Blockchain Association will be in turning around the popular perception of cryptocurrencies. But the group notes it is open to regulation, saying that it will “encourage regulatory solutions that protect consumers and support innovation.” At the very least, it should open a dialogue with government officials and the public that could discourage bad actors from further using cryptocurrencies to defraud investors.
Have your say. Will the Blockchain Association be successful in increasing acceptance of cryptocurrencies and blockchain technology? Or will the reputation cryptocurrencies have acquired prove difficult to change?
Images via Pixabay
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