Pain of the Current vs Next systems
A review of the conversation on crypto regulations seems to ignore the very real pain of the dysfunctional current system, while giving disproportionate weight to sometimes real sometimes hypothetical pains of the emerging system.
One gets the impression that the comfortable incumbents who benefit from the status quo have already "priced in" the pain and dysfunction of the current system, and concluded that since it doesn't impact them personally, they can safely ignore it when making comparisons to the emerging system.
To be clear the regulatory community has conscientious, compassionate individuals who are dedicated to serving the public good, and for them, these comments are a cheap shot.
These comments are not directed at them, but rather at a behavior that we should have a conversation about.
A direct appeal to regulators
The headline commentary from the regulator community so far screams a near total absence of first hand experience, hypothesizing from afar, opining on things one has clearly not taken the time to personally learn and test.
This is ironic because the crypto space is hard wired for participation, with low barriers to entry. Nothing stops anyone of us from trying this stuff and learning firsthand.
And specifically from me to you: if you are a financial regulator, you most likely can afford - better than most Americans - to test and learn first hand. Open a crypto account, invest in altcoins and stablecoins and see for yourself. Put your bitcoin up as collateral, make yourself a loan. Convert between alt and stablecoins. Create and trade NFTs and see what that's all about. Try all the different things the rest of us are trying.
In other words, participate. Learn along with the rest of us. You'll see that there is a lot here that is far from perfect and frankly frustrating. And you'll see where the real issues can occur, and the real work and governance needs to happen.
There is a world of good and a world of hurt that can come out of this space. It is not without risk. But it is important enough to the future of the world's economies and the future of individuals and families, to warrant you and me personally investing time in first hand learning. If we take a test and learn approach our input will be way more relevant and helpful than the hypothesizing of those who never actually got involved.
A potential objection of someone with regulatory responsibilities might be: "Hey I'd love to participate and test and learn, but will I be creating a conflict of interest if I do this?" If that is your active concern, one option is to create or support innovation safe harbor legislation, like this example.
And know this: People in the US and other countries are testing and learning because they don't have a strong sense of confidence in the current system. On a gut level, most Americans are clear on one thing: you can't rely on wages alone. You've got to have some kind of access to capital that will grow in value or else you won't have what you need for you and your family. That reality is driving what the comfortable like to label - condescendingly - as "reckless retail investor behavior".
The emerging crypto space is immature and full of rough edges, but already it appears to be more capable, more efficient, more open, more accessible and equitable than anything we've seen from the current financial ecosystem, with its voluminous history of corruption, racial bias, onerous fee structures, lopsided inequity and its undeniable track record of reserving meaningful upside for its centralized inner circle while tossing crumbs and fees to the rest of the world.
Our opportunity is to see how to maximize the good and prevent the bad - and we can do that together with a test and learn approach.