Blockchain technology could drive the most significant change in society since the American Revolution, U.S. Rep. Tom Emmer says. But only if regulators resist the temptation to be heavy-handed.
"Now, it's been two-hundred and thirty some years. We've kind of gone through this evolution," Emmer told CoinDesk at the D.C. Blockchain Summit this week. "We've been centralizing, consolidating authority for years. This technology…it could maybe restore what it was the founders were looking for, what they tried to create."
But the transformative potential of blockchain and cryptocurrencies will never be fulfilled if regulators overreach, he said.
"We have to be vigilant and we have to remember that you create room for innovation when you don't stifle it," Emmer said. "And too much regulation, too many regulators has a tendency to put a wet blanket on it."
And that's where Emmer says he and his colleagues on the Congressional Blockchain Caucus come in. He told CoinDesk:
"It's up to members of Congress with election certificates to push back where it's appropriate to push back."
Japan as a model
Emmer said the U.S. would do well to mirror Japan, where only one regulatory body, the Financial Services Agency, has jurisdiction over cryptocurrencies.
More clarity and certainty would help the blockchain space to flourish, but "the way you do that is you don't have a dozen or so agencies that are all trying to grab for a piece of the jurisdiction and responsibility."
Rather, the best situation would be "one agency, you know where you're going, you know who's in charge, you know what the issue is, what you have to respond to."
Yet government regulation is not the only way to achieve clarity and certainty about the rules of the road, Emmer claimed.
"I think the industry can actually supply a lot of this, and then it's going to be up to legislators to be vigilant about recognizing we want the industry to do as much as it possibly can," he said, adding:
"There might be some very basic things when it comes to fraud, those types of issues the government might need to be involved in. But you shouldn't default to government. You should default to the industry, and then working with the industry you should be able to find those rules."
In any event, Emmer said Congress is not yet ready to act and that he didn't expect to see related bills emerging in the near future.
"First you have to educate people," he said, a process which will be underway next week at a House Financial Services subcommittee hearing entitled "Examining the Cryptocurrencies and ICO Markets."
Emmer did suggest, however, that legislators could eventually develop "some actual proposals" in the next legislative session beginning in 2019. And while he said that his colleagues on the caucus were treating blockchain and cryptocurrencies as non-partisan issues, he would not be surprised if they were eventually politicized.
"The people that are most interested in this are the young people that are probably most distrustful of government," Emmer said. "So don't be surprised if a politician tries to grab ahold of some area of it and either bring it under their control, because they can't control it, or utilize it as a political 'something.'"
He added that he was unsure of what that "something" might entail.
Regardless of any future efforts politicians and regulators might make to assert their influence over blockchain and cryptocurrencies, Emmer said he is largely optimistic.
"I think that the future is bright for blockchain," he said, adding a precaution, "I do think we in government have to be very careful about keeping the dogs at bay."
Image by Annaliese Milano for CoinDesk