Let's set Facebook aside and get serious about crypto

Let's set Facebook aside and get serious about crypto
© The Hill Illustration

When gridlock reigns in Washington, it can become difficult to reach consensus. I saw it happen when I served in Congress, and it frustrated honest attempts to get our arms around key issues that we had to tackle. I saw it happen again in the hearings to discuss Facebook’s leap into the cryptocurrency space earlier this month.

Frustratingly, it appeared that this important issue was set aside in favor of campaign rhetoric. Blockchain technology, which gave rise to cryptocurrencies and new payment systems, has been a promising innovation for years and it required regulatory attention from Congress long before Facebook. Sadly, the House and Senate hearings this month were missed opportunities to take a serious and open-minded look at cryptocurrencies.

Since Facebook has drawn considerable fire for how it handles user privacy, election meddling and fake news, concerns about its leap into the financial services space are justifiable. But cryptocurrency innovations came long before Facebook got in, and has been developed entirely by start-ups and a broad spectrum of small players and inventors looking to democratize payment systems. Facebook’s latest move was simply an attempt to jump on to a moving train.

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Regardless of how they entered the space, Facebook’s move has raised significant awareness and attention in Congress over cryptocurrencies. Other industry players should use the company’s missteps as an opportunity to prove why this nascent technology is worth nurturing, especially as Congress begins to examine the regulatory future of digital currencies. Regulating emergent technologies can be difficult but Congress has proved in the past that they can get the job done—just look at the internet.

Back in 1995, internet-pioneer Bob Metcalfe famously quipped: “I predict the internet will soon go spectacularly supernova and in 1996 catastrophically collapse.” Imagine if, in 1995, we had shrugged the internet off as a fad, or worse yet, regulated it out of existence. The connected world we enjoy today would still be a thing of science fiction. In the same way, many today are dismissing the potential of cryptocurrencies. Metcalfe showed us that cryptocurrencies are deserving of a second look.

One of the main concerns Congress has with Facebook entering into financial services is online data privacy protections. And this makes sense understanding that most Americans are concerned about the data collected by social media companies like Facebook.

But it also seems clear that data privacy issues are plaguing big tech companies, not so much cryptocurrencies. Cryptocurrencies are a financial service, not a social media platform. They therefore have to follow a myriad of existing laws, including financial data protection laws, which exist today largely thanks to regulations passed in Congress.

Even with existing laws to protect financial data, cryptocurrencies face a much broader challenge: the lack of an overall regulatory framework. It is the responsibility of Congress to create one.

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When I was in the House, we worked together on the first major rewrite of the Communications Act in over 60 years—taking America into the digital age and unleashing what would become one of the most critical components of our economy. We all had our concerns, but we dug deep to understand the technology to make sure it was regulated properly and would still benefit consumers. While the dynamic in Washington today is troublesome, I remain hopeful that Congress can take a similar approach to cryptocurrencies.

Confusion over cryptocurrencies or disdain for big tech should underscore the need for Congress to provide oversight. The 1996 Communications Act was a major legislative feat, one that required buy-in from all sides and stakeholders, and ultimately helped make the internet what it is today. Congress now has the chance to take a page out of our book and examine the crypto space in a serious and pragmatic manner, work with stakeholders, and design a framework that will provide a future for the industry.

Albert Wynn is a former Democratic member of the U.S. House of Representatives representing the 4th District of Maryland. Wynn served on the House Energy and Commerce Committee and the Financial Services Committee during his tenure.