The Importance of Regulatory Clarity and American Leadership in the Web3 Era

Speaker 1

Evan McMullen is the most important a former CIA officer, senior advisor to Congress, and currently a candidate for the U. S. Senate. After serving a mission in Brazil and graduating from BYU, he started his career with the CIA, spending much of his service overseas. running counterterrorism and traditional intelligence operations. Following his service, McMullen received his MBA from the Wharton School at the University of Pennsylvania. In 2013, McMullen returned to government service as a senior advisor to the Foreign Affairs Committee and Chief Policy Director in Congress. In 2017, he founded Stand Up Republic, a nonprofit focused on uniting Americans across party lines, defending our democracy, and replacing extremist politicians. He launched his campaign for the U. S. Senate in October of 2021. Evan McMullen.

Evan McMullin

Thank you very much. Thank you to the MTA and to Carl for having me here. And it’s a pleasure to have an opportunity to share a few thoughts with you, but also. Learn from you. I’m relatively new to the space, but have been tracking it as an outsider. Certainly have just some thoughts to share today about regulation and as we go forward, as you continue to innovate.

Evan McMullin

Blockchain and other distributed technologies offer a transformative opportunity, I believe, and I think all of you know very well. I believe our state and our country are are poised to help lead it if we prioritize the value of related innovations over the protection of the narrow interest of established and entrenched incumbents in legacy technologies. Specifically, digital assets create an opportunity to strengthen American leadership in technology and in the global financial system. Leading in this quickly developing space requires encouraging innovation while mitigating the risks to consumers, businesses and the financial system. America should be a leader in establishing a global governance for digital assets that reflects our core values of human liberty and human flourishing. as well as U. S. national security and global economic competitiveness.

Evan McMullin

Technological breakthroughs are often accompanied by a gold rush period. where well capitalized interests quickly drive out other contenders and then dominate a once competitive landscape For example, during the expansion of our country’s railroads, several areas were dominated by just one or just a couple of companies that had little pressure to keep prices reasonable or to main high quality of services. Around that time, telegraph operations were quickly consolidated by Western Union, and later on, ATT came to own Western Union and then to monopolize telephone services as well. Government regulations were eventually enacted to ensure that those enterprises continued to promote the public interest as well. These regulations helped clarify for would-be entrepreneurs what the rules of engagement were, making it easier for them to compete on a more level playing field.

Evan McMullin

Over time, however, people also realized that regulations could have a negative side effect as well. In many cases, excessive regulatory burdens created barriers to entry. And effectively protected these entrenched incumbents and interests. Unfortunately, that dynamic still exists.

Evan McMullin

I saw it for myself while serving as the Chief Policy Director with House leadership. Years ago in the U. S. Congress. And it in one occasion in particular, I remember a lobbyist. Came to meet with me, represented a major industry and the major players in that industry. And when he arrived in my office, he handed me a bill that he had drafted with his clients. And as I sat there with him, it was a relatively short draft bill, so I decided to read it right there. And as I did so, it became clear that The bill that he wanted my support for and bringing to the House floor for a vote in hopes that it would become law, it became clear that that bill was. a set of new, onerous, even crushing regulations for his industry. And at first, I was maybe a bit naive still in the role, and I was bewildered by why this lobbyist representing This industry and the major players in it would want to enact a bill that would enforce, would impose such crushing regulations on his own industry. But I soon answered my own question. The reason he wanted to enact that bill was that he understood that the major established companies in his industries could afford the ones that could afford to hire such a high-powered lobbyist in Washington knew that they had the resources to manage these heavy-handed regulations. They knew that those regulations that they were proposing would be manageable for them, but would prevent new entrants from entering their market. Those regulations would have made it more difficult to recognize revenues and to therefore raise capital in order to grow.

Evan McMullin

Now, I wish I could tell you that this kind of regulatory approach, which I consider to be corruption, was rare, but sadly it is not. And that’s why innovators and new entrants to any industry dominated by entrenched incumbents nowadays, unfortunately, still must work almost as hard to manage that regulatory risk. as they do in building new products and taking them to market. I wish it weren’t the case. It shouldn’t be. Such regulation stifles innovation and even dictates particular technology Choices that often quickly become obsolete. It’s part of the reason that just a few telecom giants dominated the space through the 19th and 20th centuries. For regulation to be effective, a balance must be struck to help clarify and encourage desired outcomes without choosing specific winners and hindering innovation, entrepreneurship and progress.

Evan McMullin

Today, we’re seeing a similar growth trajectory and evolution with the emergence of the Internet. When the Internet became publicly accessible in the 90s, common carrier laws regulated infrastructure. and content providers. Despite these laws, however, value captured by well capitalized interests still took place. As the early web evolved into a place where it became easier for users to publish their own content on social media, and large companies and providers then gained tremendous control over the flow of information. This, of course, includes control over advertising markets, over access to news and entertainment, even the influence over the outcome of elections or conflicts between nations and ethnic groups. as well as matters even as we’ve seen recently of public health. In fact, these dominant centralized players have become a major cause for what I believe is a deepening social and political division that are now destabilizing our country. and threatening the future of our democracy and democracies elsewhere around the world.

Evan McMullin

Blockchain and other Web three technologies present the very real possibility of restoring power and control to individuals and communities. Through disintermediation, by eliminating the middleman from various current ecosystems, allowing them to be governed more and more truly democratically. This includes financial services, social media, the sharing economy, traditional media and entertainment.

Evan McMullin

As you know, several American companies are actively building Web3 services. There’s still a lot of uncertainty in the market, however, because of a real lack of regulatory clarity. Many such startups have chosen to be domiciled in other jurisdictions. Even though they would otherwise prefer to be here in the United States, these other jurisdictions offer more regulatory clarity. And it’s critical that we don’t let this continue to happen. American leadership in Web3, in the Web3 era, is critical to our national interest.

Evan McMullin

As someone who is still new to the space but has followed its evolution in recent years, I urge policymakers to help create an environment that protects consumers, businesses, and investors, while still creating space for decentralized technologies and new enterprises based upon them, space for them to thrive. Policymaking in this area should create regulatory clarity, encourage innovation, protect privacy, self-custody, and peer-to-peer transactions. advance American economic competitiveness and guard against systemic risk.

Evan McMullin

Rather than stifling innovation Sensible regulations can provide the clarity that American technology developers need to innovate freely without suffocating under the risk of unfair reprisals from either incumbents or the government. Without further innovation-friendly public policy, we run the risk of ceding the playing field to other interests, indeed other nations that That don’t share our commitment to the values of human rights and free enterprise. This is a tremendous opportunity, but we must have the courage and vision to seize it together. Thank you.