02.21.2023|Katie BiberAmy Aixi Zhang
Imagine designing an FAA safety protocol without ever seeing a plane, or legislating lightbulb efficiency without ever flipping a switch. It may be possible, but it certainly won’t yield sensible policy.
The internet defined the past few decades of innovation, and we believe crypto will define the next few decades. This means that drafting good regulation — regulation that doesn’t stifle or drive development overseas — is among the most critical issues for American policymakers today. But to truly understand crypto, it’s almost mandatory to actually use it.
The tl;dr is that ethics rules effectively bar most government employees from owning crypto. Here’s a breakdown for employees in Congress and key agencies.
The link to the chart is available here.
The origin of these rules was principled and well-intentioned; in the wake of Watergate and other scandals that rocked public trust in government, the U.S. passed the Ethics in Government Act of 1978 to fight corruption and require senior employees of the executive branch to submit public financial disclosures. The goal was admirable; no one condones government insider trading or policymakers that fail to prioritize the public’s interest.
But unlike other types of regulated technology, ethics rules as applied to crypto effectively prohibit all use by government employees. While crypto ownership by policymakers requires ethical boundaries, the rules should be modernized in order to empower government employees to develop good policies. This is particularly critical given:
To make good crypto policy, government employees need modernized ethics rules. We propose the following common sense boundaries:
To make good crypto policy, government employees need modernized ethics rules. We also urge key policymakers to dedicate resources toward establishing a research or experimental wallet for their offices. Combined, these innovations could produce new understanding, better lawmaking, and a thriving American crypto economy.
Acknowledgements: John Heinemann, Dominique Little, Brendan Malone, Rodrigo Seira, and Justin Slaughter, Anne Kelley (Mercury Strategies), Langston Emerson (Mindset), and Charlie Schreiber (Mindset).
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