Progress must keep pace with need. An overriding theme during day three of Consensus: Distributed was that the pace of technological development - driven by interconnected but diffuse organizations - must keep up with (or keep in mind) the needs of actual people and societies. “To solve a problem you need to see it first,” said Tyrone V. Ross, director of community at Altruist, a platform for financial advisors. Only by working directly with communities can organizations truly come to understand their financial needs. There’s disagreement in and outside of crypto on how to best orient technological progress for these needs. But the fact is, the industry is hurtling towards a set of rules that will redefine the ecosystem for it. The so-called “Travel Rule,” a new set of guidelines proposed by the Financial Action Task Force last spring, will attempt to inject structure into the largely anonymized crypto economy. FATF’s Virtual Asset guidelines ask for exchanges and some wallet providers to maintain identifying information about the senders and receivers of crypto transactions. It’s due to become industry-standard this June, with the question remaining whether crypto is ready for it. “Crypto is not designed to have a Travel Rule solution,” Noah Perlman, chief compliance officer of Gemini, said at CoinDesk's Consensus: Distributed virtual conference. While the exchange will work to comply, “it’s hard” to meet the conflicting needs of regulators and their clientele.
“We want to help law enforcement and provide more transparency,” Coinbase’s Chief Compliance Officer Jeff Horowitz said. “It really is a conversation between privacy versus transparency.” Transparency in this case means righting the wrongs of unchecked technological progress. “Anonymity is a big goal for creators of this technology,” but the experiment went a different way when bad actors began exploiting the systems, said Merav Shor, counsel at eToro. “Anonymity has to be compromised to a certain degree,” she said. Yaya Fanusie, of Cryptocurrency AML Strategies, agreed. Despite challenges with implementing it right now, these rules are “a path to scalability.” At some point, he argued, crypto needs to meet the challenges and expectations of the traditional financial system. While some propose that the Travel Rule, and its antecedents like the Bank Secrecy Act (enacted in 1970), are unconstitutional out of hand, many see regulation as a catalyst to mainstream adoption. Speaking on the DeFi Risks and Regulation Workshop, Jake Chervinsky, counsel for Compound said, “The government isn’t trying to kill DeFi.” “They understand there’s a lot of promise in this space,” with potentially huge benefits for expanding access to financial services. He added that the government understands that this technology will be built and would prefer the innovation takes place within US borders.
The CoinDesk 50
The CoinDesk 50 is an annual list celebrating the movers and shakers of the crypto industry. We've already highlighted Binance, Cosmos, Brave, Bitmain, MakerDAO, Besu and the People’s Bank of China, and will continue to announce five new names a day until the end of Consensus: Distributed. You can read the full list here. Bitcoin Is Still King Bitcoin is the reason why we're writing these words and you’re reading them now. Its implementation 11 years ago kicked off a whole industry composed of competing forms of currencies and novel financial instruments. It got people thinking about what money is, could be and whether they should have direct control over their economic lives. But Bitcoin itself is building: A decentralized group of core developers is keeping its core spinning, while hundreds of other technologists are finding ways to improve its usability, privacy and scaling. The world’s first cryptocurrency, theorized and encoded by the long-silent Satoshi Nakamoto, still dominates this industry, in both market capitalization and brand recognition. Bitcoin is king because no one person controls it. Bitcoin is king because it grants sovereignty. Bitcoin is king because it knows it's not wearing clothes. Read More...