United States lawmakers will soon destroy a massive opportunity for job creation and a diverse workforce in blockchain technology if they do not amend infrastructure bill HR 3684, which would require blockchain developers to attain broker status on U.S. soil.
HR 3684 does not recognize the taxonomy of the asset class. Not every crypto asset falls under the definition of security — many are transactional tokens and used as consensus mechanisms essential to distributed ledger technology. Requiring broker status for every blockchain developer indicates that U.S. lawmakers have yet to understand blockchain technology or cryptocurrency’s complex and diverse set of use cases.
“Blockchain enables us to build a new decentralized economic system, which will fundamentally change how people save and use their assets and money,” Jane Thompson, a futurist and blockchain social impact leader, shared with me. “However, there is nothing inherently financial to blockchain and the functions and features of a digital asset should determine its classification. This is an ill-informed and short-sighted bill and will continue to lock excluded groups out of an economic system already steeped in privilege.”
Blockchain is democratizing access to finance and new forms of digital enterprise. Its low barrier to entry has empowered people from different backgrounds all around the world to participate in this growing decentralized digital economy.
These pioneers are not the usual players of banking and Wall Street. Still, they have become respected developers, fintech entrepreneurs, innovators and advisors because of the opportunity that comes with the burgeoning blockchain industry. Never have we seen so many people from all walks of life participate in investing, trading and the use of digital assets.
The costs of initial and continuing education — plus the licensing and business expenses that can come with broker licensing — are nearly unattainable to most Americans, especially among lower socio-economic groups.
The learning curve of trading doesn’t help, especially since developers aren’t necessarily traders. It’s like requiring a doctor also be a lawyer, just to practice as a doctor legally. U.S. broker exams, especially the Series 7, are known to be extremely difficult and can require months or years of studying to pass.
HR 3684 is contradictory to the existing parameters of fintech and traditional finance. Why would blockchain developers be treated like brokers when they don’t have to manage client assets? Quant developers or even the standard developers working for online payment platforms like Paypal aren’t required to have broker licensing in the United States.
Regulation is essential in protecting consumers and the economy, but this ill-informed attempt to create a legal framework around crypto will only send industry leaders of all backgrounds, companies, and jobs overseas in a time when America needs job creation the most.
The U.S. Senate has approved HR 3684, despite the lack of an amendment, proposed by six senatorsearlier this week, which were aimed at clarifying the crypto language in the bill. It will move to the House of Representatives before reaching President Biden for final signoff.