Laws and regulations around digital assets can seem antithetical to the whole ethos of the space. Wasn’t bitcoin, after all, created to disintermediate the financial system, in the wake of the 2008-2009 crisis? Most regulators and lawmakers have a vested interest in sustaining the status quo, business-as-usual Wall St. financial system. And they are skeptical about the possibility or desirability of digital assets. On the other hand, they have realized how powerless they are to stop it.
In addition, the status quo faces a steadily mounting public opposition. Since the 2009 financial crisis there have been a few variations of this populist opposition- Occupy Wall St., Brexit, Donald Trump, Yellow Vests, and then, earlier this year, Wall St. Bets. Whether these movements are all thematically related to the financial system specifically, is debatable. But it seems unquestionable that they are each expressions of the same kind of vague discontent with a popular conception of the status quo.
The trajectory of the financial system right now is clearly not in the interest of most Americans, or most people worldwide. That much is clear. The harder question is what to do. Have any of the above populist movements made headway towards real solutions to the systemic problems they observe? Have they exacerbated the problems? Are the problems with the current financial system unavoidable facts of nature? Or it is possible that a digital asset ecosystem can actually help human beings address systemic economic problems at their root?
While many politicians and regulators have a vested interest in maintaining the financial status quo, many other lawmakers are open to potential benefits of digital assets. Rather, than a “f- you” attitude, what seems more relevant is the attitude of “we have the upper hand in defining what this is.” Lawmakers and traditional financial investors are probably scared that they don’t understand digital assets (and neither does anyone else for that matter). And they have started to realize that they may be powerless to stop it, whatever it is.
And if this is true, then the responsibility is to define exactly what its economic properties are, as distinct from the failed, incumbent economic system. In the second part, we will look at how digital asset ecosystem already quietly addresses some of the main complaints about the current status quo system, and thus could offer a tenable supplement or replacement:
- political polarization
- wealth concentration / monopoly sectors
- environmental sustainability
- decreasing legitimacy / trust in institutions