July 20, 2023
By Anjali Kochhar
In the wake of high-profile fraud cases in the cryptocurrency space, global financial regulators have been keen to rein in bad actors within the crypto-asset marketplace, believes Yaya J. Fanusie, the director of policy for anti-money laundering and cyber risk at the Crypto Council for Innovation in an article published in Foreignpolicy.com.
However, some policymakers, including those in the White House, have taken a dismissive approach towards blockchain technology—the foundation of cryptocurrencies. Despite this scepticism, experts argue that blockchain’s potential for dynamic data verification and transmission across networks should not be ignored, especially as data plays a crucial role in technological advancements and global competition.
Countries like China, Russia, and the European Union have recognized blockchain’s significance and are actively developing and implementing blockchain-based digital ecosystems. He says, the EU, in particular, is leading the charge with a draft legislative proposal for a digital euro based on blockchain, as well as regulations for crypto-assets and coordinated blockchain infrastructure development.
The convergence of blockchain, artificial intelligence, and the Internet of Things (IoT) has the potential to revolutionize financial transactions and the future of the Internet. However, it raises concerns about personal privacy and potential abuse of financial data. Preserving financial privacy in such a system is challenging, and the United States is urged to step up as the global standard-bearer for the digital financial system to avoid falling behind in shaping the future of finance.
Despite recognizing blockchain’s importance in the realm of critical and emerging technologies, the U.S. government still needs to consistently prioritize it. This inconsistency is evident in the absence of blockchain from the U.S. National Strategy to Advance Privacy-Preserving Data Sharing and Analytics, despite the fact that many privacy-enhancing technologies are being developed and implemented within the crypto space.
Ironically, open blockchains have incentivized privacy innovation, as the lack of privacy on public blockchains led developers to create applications that obscure crypto transactions and hide the identities of wallet holders. These privacy-enhancing technologies, like zero-knowledge proofs (ZKPs), offer ways to protect personal identity data while still complying with legal and national security requirements. Many crypto ventures are actively investing in these technologies to bring them to the mainstream market.
The Biden administration’s mixed messages on blockchain highlight the need for a coherent approach to harnessing its potential. As global rivals embrace blockchain’s transformative power, the U.S. must act decisively to leverage this technology and safeguard privacy in the ever-evolving digital landscape.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
