The Biden Administration Gets Serious About Web3
As with the first two generations of the internet, Web3's growth has far outpaced the governance response to it, leaving many innovators struggling in an environment of regulatory opacity. Fortunately, the US has now indicated that it recognizes the industry's importance as a source of both risk and opportunity.
WASHINGTON, DC – As the third generation of the internet – Web3 – has continued to expand, many developers, companies, and investors have agonized over the lack of regulatory clarity around the world, particularly in the United States. But now that US President Joe Biden has issued an Executive Order on Ensuring Responsible Development of Digital Assets, a sleeping giant has awoken.
The US must lead in this critical sphere. Owing to the climate of opacity in recent years, a significant share of crypto and Web3 companies have established legal domiciles in smaller jurisdictions. Some of these, such as Bermuda and Singapore, have established prudent whole-of-government approaches for regulating digital assets and fintech; but others are regulatory havens that have more or less given start-ups carte blanche.
In its new executive order, the Biden administration recognizes that “advances in digital and distributed ledger technology for financial services have led to dramatic growth in markets for digital assets, with profound implications for the protection of consumers, investors, and businesses.” He has directed all relevant federal agencies to study the risks and opportunities associated with blockchain technology. And by including agencies such as the Department of Commerce, the Department of Labor, and the US international development agency, USAID, he acknowledges that Web3 offers opportunities well beyond digital-asset speculation, new forms of software-intermediated capital markets, or decentralized finance.