Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?

Cryptocurrency. Decentralized finance. Nonfungible tokens. Once only experts on the cutting edge of financial services were familiar with these terms. Now, with the emergence of digital assets within the global financial system, crypto, DeFi, and NFTs are becoming part of the mainstream financial services lexicon.

The rapidly emerging crypto ecosystem faces uncertainty within a regulatory regime designed for very different institutions and securities. In response, on March 9, 2022, President Biden issued an executive order, “Ensuring Responsible Development of Digital Assets,” which ordered agencies to submit policy recommendations based upon multiple principles such as: providing consumer protection, ensuring U.S. financial system stability, mitigating systemic financial risk, responsibly developing digital assets, and examining the creation of a U.S. Central Bank Digital Currency (CBDC). Supporters of increased financial regulation over cryptocurrency see this as a necessity to provide security essential to ensuring financial stability and consumer protection within the digital asset space. Others view these federal regulatory efforts as a threat to future opportunities for economic innovation.

At a live Regulatory Transparency Project event, following remarks from SEC Commissioner Hester M. Peirce, an expert panel including Jerry Brito, Ryan Selkis, Todd Phillips, and moderator J.W. Verret discussed current and future efforts at regulation of cryptocurrency and its implications for innovation, financial stability, and consumer protection.

Jerry Brito

Executive Director

Coin Center


Todd Phillips

Director, Financial Regulation and Corporate Governance

Center for American Progress


Ryan Selkis

Co-Founder and CEO

Messari


J. W. Verret

Associate Professor of Law

Antonin Scalia Law School


Financial Services & Corporate Governance

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at [email protected].