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Experts Caution Against Overregulating Cryptocurrency

Though regulators may want to regulate cryptocurrency to protect consumers, experts argued that overdoing it could impact innovation.



WASHINGTON, February 16, 2022 – Despite the unknowns of cryptocurrency, experts cautioned last week against overregulating it for fear of stifling innovation in the burgeoning sector.

During the Broadband Breakfast event on February 9, University of Arkansas Professor of Law Carol Goforth argued that one of the most significant issues facing cryptocurrencies is striking a balance between regulation and consumer safety.

“The growing challenge is finding a balance between the legitimate need to protect the public, investors, and our financial structures and systems against abuse, [with] the desire to protect and encourage legitimate entrepreneurs,” Goforth said.

One of the benefits that often piques the interest of consumers while also worrying regulators is the decentralized nature of cryptocurrency. Cryptocurrency advocates often tout the lack of a single regulatory body with domain over the blockchain and cryptocurrency as an enticing feature, while governments are often left scrambling for ways to still protect consumers in the often anonymous and deregulated sector.

Matthew Snider is the senior vice president of Centri Tech – an organization dedicated to improving broadband connections and utilizing those connections to improve user quality-of-life. “Decentralization is a spectrum,” Snider said. “There are lots of different places where people can land on that [spectrum].”

He explained that this spectrum has extremes on both sides – with one extreme relying on a central bank, all the way to a completely disaggregated blockchain that operates independent of any body.

Goforth said that if regulators, such as the Securities and Exchange Commission, had their way, entrepreneurs and companies may find themselves disincentivized to conduct their business in the United States if they were planning to leverage blockchain and cryptocurrency technologies.

“There is a huge pressure – not just to not do business [in the United States] – but to protect American investors by not letting them decide for themselves whether or not this is a risk they want to take.”

“To my mind, that is a very clear example of regulatory overreach that is likely to harm American investors and is likely to push technology and entrepreneurs away from our country in a way that is not optimal for anyone – other than folks who like large jurisdiction for the SEC.”

Uncertainty still exists

Snider said that while you have some countries that are leaning into the technology, many are still unsure of how to approach it.

“You have got some countries that have made [cryptocurrency] their national currency, and you have got countries like Russia and China that said ‘no, it is banned,’” Snider said. “I think you have people who do not understand something who are taking laws that are anachronistic in nature – very old – and saying ‘hey, these buckets apply because we cannot think of other buckets to put them into at the moment and we do not have the time or the effort, so we are just going to put them into these buckets and hope that they work.’”

Snider also added that for all the effort regulatory bodies and countries have put into trying to regulate cryptocurrency, all it takes to circumvent the laws is a virtual private network, or VPN, that enables users to send and receive data while obfuscating their location from those who might be trying to monitor them.

“There is a very big lack of being able to control [cryptocurrency], and it is freaking them out,” Snider said.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can also PARTICIPATE ONLINE in the current Broadband Breakfast Live Online event on Zoom.

Wednesday, February 9, 2022, 12 Noon ET — Harnessing Cryptocurrency

Join us in person for a Broadband Breakfast for Lunch on cryptocurrency. In Broadband Breakfast’s premiere session on the subject of decentralized finance, we’ll explore recent developments in the blockchain, consider the ways that cryptocurrencies are impacting global financial transactions and transfers, and address government officials’ attempts to harness – or to banish – blockchain-based digital coinage.

Panelists for this Broadband Breakfast Live Online session:

  • Jennifer Schulp, Director of Financial Regulation Studies at the Cato Institute’s Center for Monetary and Financial Alternatives
  • Carol Goforth, Clayton N. Little Professor of Law, University of Arkansas in Fayetteville
  • Matthew Snider, Senior Vice President, Centri-Tech
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Jennifer Schulp is the director of financial regulation studies at the Cato Institute’s Center for Monetary and Financial Alternatives, where she focuses on the regulation of securities and capital markets. She has testified before the U.S. House Committee on Financial Services, and her writing has appeared in Business InsiderMarketWatch, and others. Before joining Cato, Schulp was a director in the Department of Enforcement at the Financial Industry Regulatory Authority Inc., representing FINRA in investigations and disciplinary proceedings relating to violations of the federal securities laws and self-​regulatory organization rules.

Carol Goforth is the Clayton N. Little Professor of Law at the University of Arkansas in Fayetteville. She is the author of more than a dozen academic articles dealing with regulation of cryptoassets and transactions in them, as well as Regulation of Cryptotransactions, a comprehensive text for law students and others interested in crypto regulation published in 2020 by West Academic. The second edition of that book is expected April of this year.

Matthew Snider is Senior Vice President of Strategy and Business Development at Centri Tech. His career has been focused on bringing broadband affordability and adoption to underserved communities, both urban and rural. An active participant in the blockchain economy for the past six years, Snider understands the impact that these technologies play in building out use case solutions that bring more adoption to broadband, and to the blockchain.

Drew Clark is the Editor and Publisher of and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter and Facebook.

Illustration of blockchain from Exin used with permission

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

Reporter Ben Kahn is a graduate of University of Baltimore and the National Journalism Center. His work has appeared in Broadband Breakfast, Washington Jewish Week, and The Center Square, among other publications. He primarily covers Big Tech and spectrum policy.


Finance Experts Weigh Merging Regulatory Agencies to Tackle Cryptocurrencies

‘A lot of regulatory gaps exist because we have two regulators.’



Photo of Dawn Stump of CFTC’s Global Markets Advisory Committee from September 2019

WASHINGTON, May 19, 2022 – Crypto market observers are calling for a change in the regulatory system and laws to tackle the quickly growing world of digital currencies.

“We will need new substantial law,” Douglas Elliott, financial regulation expert and partner at consulting firm Oliver Wyman, said on a panel hosted by the Federalist Society on Tuesday. “There are too many ambiguities” with the current regulatory system, he added.

As state and federal governments consider how the growing crypto industry should be regulated, various crypto experts further argued Tuesday for a redesign of the regulatory structure, while others said there was no need for a consolidation of agencies.

Part of the reasoning behind the consolidation is confusion about whether cryptocurrencies are commodities or securities. As such, some are recommending a merger between the Securities and Exchange Commission and the Commodity Futures Trading Commission to handle the regulation of the digital money.

“A lot of regulatory gaps exist because we have two regulators,” said Michael Piwowar, executive director at the Milken Institute Center for Financial Markets, suggesting that Congress merge the two into a single regulatory body.

Thomas Vartanian, executive director at the Financial Technology and Cybersecurity Center, backed the agency merger idea. Vartanian explained that despite the existence of cryptocurrencies for fourteen years, crypto remains largely unregulated.

“Bottom line is we’ve built a business of ten trillion dollars with no regulation and that is a financial risk,” Vartanian said. “We are building a financial time bomb.”

But Dawn Stump, former commissioner of the CFTC, said the best way to address these gaps in crypto regulation is not to redesign the regulatory system.

In August 2021, Stump said in a public statement that due to public misunderstanding about the CFTC’s regulatory oversight authority, “there has often been a grossly inaccurate oversimplification offered which suggests these are either securities regulated by the Securities and Exchange Commission or commodities regulated by the Commodity Futures Trading Commission.”

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U.S. Facing Pressure from China as Digital Currency Adoption Debate Continues

Experts expressed concern about the U.S. falling behind China on the development of a central bank digital currency.



Photo of Stephanie Segal from CSIS

WASHINGTON, May 12, 2022 – The U.S. is falling behind China as the central bank ponders whether to adopt a digital currency, according to observers.

“If other countries are innovating in a direction that could represent a technological advantage, and the US is not prepared to meet that challenge, the U.S. will be at a disadvantage,” said Stephanie Segal, senior associate of the economics program at the Center for Strategic and International Studies. She and other panelists were speaking at a CSIS event on Thursday.

Segal’s comments were supported by her colleagues at the center, which hosted panelists to discuss the promises and pitfalls of creating a central bank digital currency. These stablecoins, as their called, are backed by other currencies, including fiat money.

Matthew Goodman, senior vice president for economics at CSIS, noted there is a lot of uncertainty surrounding this debate on the digital dollar. While there has been interest in the U.S. for developing such a currency system, Goodman said the US is relatively “behind” and delayed in conversations about CBDC compared to countries like China.

According to Fariborz Ghadar, scholar and senior advisor at CSIS, developing a CBDC is no easy fix, and is a risky step. However the concern about China having already developed a CBDC is a “major triggering point” he said.

Steven Kamin, senior fellow at the American Enterprise Institute, called China’s development of CBDCs “nearly operational” and potentially problematic for the U.S., with China as a world leader in technology. Kamin was speaking at an AEI event in April.

Risks of such a digital currency

A CBDC has upsides, but also presents risks to privacy and cybersecurity, according to Segal. She said a CBDC could create fear about data collection methods, regarding who has access to the data, and wonders if privacy protections would be provided.

Additionally, instead of having various intermediary points of security with the current banking system, a central bank digital currency would only have one point of security, making cybersecurity more vulnerable to threats, according to Segal.

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Central Bank Wise to Move Cautiously with Digital Currency, Event Hears

‘The Fed seems a little bit more uncertain about’ digital currency versus other nations, another panelist said Tuesday.



Photo of Eswar Prasad, via Flickr

WASHINGTON, April 21, 2022 – The Federal Reserve is “very wisely moving cautiously” about whether to adopt a central bank digital currency, an American Enterprise Institute event heard Tuesday, as other countries move forward on adopting the latest financial instrument.

“The Fed has been approaching this in a very sagacious manner by putting out the issue for public debate, thinking about the pros and cons and arguing that they will not move forward unless there is broad political and public support. But, I think the reality is this is where we are going, and it’s going to be in some ways an interesting world,” said economist and author Eswar Prasad, who published a book last year called, “The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance.”

“The world of CBDCs is going to be an interesting one,” Prasad said at the think tank event. “And this is certainly what we are moving towards.”

The current conversation surrounding CBDCs in America, which would ride on a digital ledger called the blockchain and are backed by the nation’s dollar, is delayed in comparison with other developed countries that have already made strides in government adoption of federal currencies.

“Among the advanced economies, Sweden’s Riksbank seems nearly dead-set on issuing an e-crono, while the Bank of England, European Central Bank and Bank of Canada are giving CBDCs serious consideration. The Fed seems a little bit more uncertain about it,” Steven Kamin, senior fellow at the AEI, said at the event.

At a Federalist Society event last Thursday, academics argued that such digital currencies backed by other currencies, such as stablecoins, can improve financial inclusion. It has also been said previously that these digital currencies could expedite federal payments to citizens. And because they’re backed by the government, there is a perceived added level of security and trust.

The panelists’ discussion also veered into the developments of China’s CBDCs, which are “nearly operational,” according to Kamin. This could potentially be problematic as the US economy is already grappling with the effects of China being a world leader in the manufacturing and distribution of semiconductors, a key product of important technology.

Experts have previously said that, if the U.S. is to remain competitive on the international cryptocurrency scene, the government must take key steps to solidify its digital currency systems.

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