Today is the last day of CoinDesk’s yearly Consensus conference and it has been exciting to hear all the fascinating discussions that have arisen from the many speakers and panels at the event.
Members of our CoinDesk editorial team got together on Twitter Spaces today to assess the big picture at Consensus 2023 and share their takeaways on the critical issues that will shape how the industry continues to unfold.
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Nick Baker, CoinDesk deputy editor-in-chief
Being a Consensus newbie this year, I am like a small-town yokel blown away by how big and impressive this event has been. Here are a couple of my takeaways:
One, the level of optimism people have about crypto is very high, which is a surprise given just how bad the regulatory outlook is. And I know it's partly self-selection bias at work: People who are going to pay a lot of money to attend this event are going to be optimistic about the space. Still, that juxtaposition of existential questions and lots of optimism is striking to me.
Two, the people I know best are from traditional finance and they, too, remain quite high on the future of crypto and moving TradFi stuff to crypto or crypto-adjacent infrastructure. Now, of course, they’ve been trying for years to show progress along those lines and have little to show for it. But they’re undeterred. This point rhymes with my first point.
Ben Schiller, head of Consensus Magazine
Something that really struck me arose from what Kate Brady, head of communications for Web3 at PepsiCo, said on stage. As you know, PepsiCo is a very mainstream American brand. It's not part of the crypto industry by any means, but it’s looking to get into Web3. And one of the things she said on stage was that she was being stymied in her work and PepsiCo has been stymied in its work by the lack of regulatory clarity, and I thought that was interesting because obviously this is something the industry says a lot that we need to do. There are guidelines from Washington, D.C., from lawmakers and from policymakers. And we think that that conversation or that that issue only affects people in the relatively small world of crypto.
But it really came home to me that actually this regulatory conversation affects all of corporate America, all of anyone who wants to develop in Web3, across the United States. And that's a pretty broad based group of people. So, if somebody from a company like PepsiCo is worried about crypto policy, then it's something that we as an industry, or we as a country, should really be focused on more. If they're saying it, it's something really important for everybody.
Additionally, what's evident is that the lack of policymaking and predictable enforcement in D.C. is a wider threat to the U.S. than we might think. It’s a concern for American competitiveness at large and, at this point, it’s really unforgivable. Europe and much of Asia now have relatively clear frameworks – and in what is supposedly a major hub for blockchain industry, we still don’t. That affects an increasingly large number of people and organizations.
Nikhilesh De, CoinDesk managing editor for global policy and regulation
What's really fascinating to me about the regulatory conversation is we're seeing these discussions happen in parallel with ongoing work in Congress and other jurisdictions, lending a bit more urgency to this week's talks. It has been a very busy week.
Over the last couple days, we've seen Congress introduce a bill to assess how crypto might be used for criminal and other terrorist activities. We've seen multiple hearings addressing cryptocurrencies held at the same time as Consensus – no relation, just at the same time as our panel on various policy issues.
Just this morning the Federal Reserve, the Federal Deposit Insurance Corporation, the Government Accountability Office and the New York Department of Financial Services all published reports explaining what they see as the root causes for the failures of Signature Bank and Silicon Valley Bank.
We're watching the regulation unfold, even as we hold this conference, talking about the same policy issues that are playing out in real time.It's still debatable whether we'll see any resolutions on legislation or rulemaking but we're seeing progress, and that ain't nothing.
Amitoj Singh, CoinDesk regulatory reporter
My takeaway is on how non-U.S. regulators are thinking about crypto while the U.S. remains in a deadlock both in Congress and among regulators (Commodities Futures Trading Commission and Securities and Exchange Commission). Other major economies won’t frame it in a way in which it sounds like they want to take advantage of the U.S. deadlock. But with the likes of Coinbase threatening to go off-shore, that’s exactly what these non-U.S. jurisdictions are ready for.
The question is when the U.S. does come up with its own regulatory framework, will other jurisdictions adjust their rules in order to have globally coordinated rules that the G-20 nations have said are imperative for successfully overseeing this space?
Cheyenne Ligon, CoinDesk regulatory reporter
The session hosted by Jesse Hamilton on the turf war between the CFTC and the SEC was really interesting. Unsurprisingly, the two former regulators – one from the SEC, one from the CFTC – disagreed about the path forward for finding regulatory clarity for crypto. Brian Quintenz, former CFTC commissioner, called on Congress to legislate the issue, but former SEC lawyer Dan Berkovitz said he didn't think legislation would fix anything.
Everyone agreed that, in the meantime, regulation would continue to be done via enforcement. It was a bleak discussion – and evidence that crypto regulations will probably continue to be a hot mess for a long while yet.