Crypto founders are asking us what the recent US election means for their projects. We tell them that we have a great opportunity to build on the bipartisan cooperation of the last Congress and bring the best crypto to the world.
In the coming months, we expect to hear a series of "hot topics" and speculation about what will happen in terms of legislation and regulation - most of which will just be noise. The truth is, it's too early to judge how everything will unfold, but we know this is hugely significant for the industry. We are very optimistic that the government will now promote innovation, accelerate progress, and allow the crypto ecosystem to thrive in the US.
This will enable us to realize many exciting consumer benefits in the future: giving people control of their digital identity, providing new business models for creativity, enabling low-cost or free cross-border transactions with stablecoins, offering new ways for small businesses like restaurants to interact with customers, the emergence of decentralized social networks, the development of physical infrastructure like energy grids, and blockchain democratizing AI and gaming, and more that we can't even imagine.
The good news is there is now a path to constructive engagement with regulators and legislators to bring regulatory clarity. Now, you should all feel empowered to explore all the transformative products and services powered by blockchain, including tokens. While we may have greater experimental flexibility, we can't forget that the fundamental regulatory principles applicable to blockchain systems remain unchanged. This means "trust but verify" still applies. So you should continue to focus on eliminating centralization or reliance on trust in your projects, as these areas will continue to face regulatory scrutiny.
Next year, we will advocate for clear regulatory frameworks to foster and support innovation and decentralization. This is both an opportunity and a responsibility for builders - you can proactively shape the future by developing projects that demonstrate how decentralized protocols can eliminate risks and prove the rationale for new regulatory approaches.
This will provide a decentralized path for well-intentioned entrepreneurs, while protecting consumers by ensuring fraud and scams are detected early.
Regardless of how new legislation or the regulatory environment adjusts, regulators and policymakers will continue to effectively scrutinize certain aspects of the industry. This is particularly true for token issuances, where the principles-based guidance in our token issuance playbook still applies.
We should expect that these clear future rules will make it easier to identify and shut down bad actors (like FTX), while allowing well-intentioned projects to take flight. This can both protect consumers and rebuild trust and confidence in the technology. The previous enforcement-focused regulatory approach lacked regulatory clarity, hampering good actors while enabling bad actors, actively harming consumer interests and unfairly undermining trust in the space.
However, for many, concerns about over-regulation have delayed using tokens to distribute project control and build community, and you should now feel more confident about using tokens as a legitimate tool for your projects. We will also soon release new guidance on using decentralized autonomous non-profit associations (DUNA) for projects looking to establish a presence in the US, shield token holders from liability, manage tax and compliance requirements, and foster more economic activity.
The future is bright for crypto in the US - this is the best time to be building in America, and we're excited about the prospects of ultimately achieving regulatory clarity.
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