The cliché is that the only things unavoidable in life are death and taxes. We can probably add new technology to the list, too. Artificial intelligence (AI), the metaverse, autonomous vehicles, flying cars – they’re all coming.
Lawmakers, if they want to be on top of a paradigm shift, should approach tech regulation in a way that is thoughtful, perceptive and comprehensive. But reaching consensus in our statehouses is challenging and finding any sort of common ground in Washington, D.C., is virtually impossible.
Can the Metaverse be Regulated? What Crypto Community's Reaction to Biden’s Executive Order Tells Us
Making matters worse, a comprehensive approach to tech policy typically occurs only after some crisis forces legislators’ hands and the media is all over them, only increasing the risk that the law is hasty or ill-conceived.
While new regulatory frameworks will be needed in some areas of Web3 – the version of the internet driven by blockchain – there are other areas where innovators and investors can move the ball forward on the basis of existing laws and regulations, all the while simplifying the task for policymakers.
So let’s talk about technological neutrality.
By “technological neutrality” in the context of Web3 and tech innovation, we mean this: If new technology enables activities that are mostly the same as existing activities, let’s start with an assumption that the law treats the two activities similarly.
Said differently, wherever possible, the law should be neutral to the tech and any variations in legal treatment should come from (and be tailored to) material variations in the business or risks associated with the technology.
U.S. President Joseph Biden’s recent executive order on crypto, while leaving a whole lot unsettled, gives an implicit nod to this approach when declaring, “same business, same risks, same rules.” The crypto community will likely hate the approach the Securities and Exchange Commission (SEC) takes, but at least it’s now in a context we can all understand.
In Web3 and crypto, regulators and innovators alike have at times gotten this backward. For instance, in the midst of the initial coin offering (ICO) boom; an SEC chair once said every ICO token he had seen was a security. That suggested, although digital tokens on distributed ledgers are infinitely variable and could represent anything from book club points to stock in a corporation, legal risks in Web3 stem from the technology rather than what lawyers call a substantive activity.
Continue reading: https://www.coindesk.com/layer2/2022/06/16/the-case-for-technological-neutrality-in-web3/
Lawmakers, if they want to be on top of a paradigm shift, should approach tech regulation in a way that is thoughtful, perceptive and comprehensive. But reaching consensus in our statehouses is challenging and finding any sort of common ground in Washington, D.C., is virtually impossible.
Can the Metaverse be Regulated? What Crypto Community's Reaction to Biden’s Executive Order Tells Us
Making matters worse, a comprehensive approach to tech policy typically occurs only after some crisis forces legislators’ hands and the media is all over them, only increasing the risk that the law is hasty or ill-conceived.
While new regulatory frameworks will be needed in some areas of Web3 – the version of the internet driven by blockchain – there are other areas where innovators and investors can move the ball forward on the basis of existing laws and regulations, all the while simplifying the task for policymakers.
So let’s talk about technological neutrality.
By “technological neutrality” in the context of Web3 and tech innovation, we mean this: If new technology enables activities that are mostly the same as existing activities, let’s start with an assumption that the law treats the two activities similarly.
Said differently, wherever possible, the law should be neutral to the tech and any variations in legal treatment should come from (and be tailored to) material variations in the business or risks associated with the technology.
U.S. President Joseph Biden’s recent executive order on crypto, while leaving a whole lot unsettled, gives an implicit nod to this approach when declaring, “same business, same risks, same rules.” The crypto community will likely hate the approach the Securities and Exchange Commission (SEC) takes, but at least it’s now in a context we can all understand.
In Web3 and crypto, regulators and innovators alike have at times gotten this backward. For instance, in the midst of the initial coin offering (ICO) boom; an SEC chair once said every ICO token he had seen was a security. That suggested, although digital tokens on distributed ledgers are infinitely variable and could represent anything from book club points to stock in a corporation, legal risks in Web3 stem from the technology rather than what lawyers call a substantive activity.
Continue reading: https://www.coindesk.com/layer2/2022/06/16/the-case-for-technological-neutrality-in-web3/
