SEC Commissioner Hester Pierce recently went on record as desiring a sort of grace period for crypto companies. A proposed rule could give crypto companies three years to worry about changes in federal oversight. Pierce’s organization calls it a “safe harbor” type of provision, with this statement certainly representing a bold move from a man of such high standing in the SEC.
Bring Us Your Blockchains
Pierce seems to understand the situation perfectly, writing in notes pertaining to her new proposal:
The application of the federal securities laws to these transactions frustrates the network’s ability to achieve maturity and prevents the transformation of the token sold as a security to a non-security token functioning on the network.
Meanwhile, in India, the situation is quite different for the blockchain industry. Officially, it’s hard to make sense of what you’re supposed to do about cryptocurrencies. An Indian exchange boss issued an open letter to the country’s Finance Minister, in which he worried about jobs and potential developments from blockchain leaving India and heading elsewhere.
Sumit Gupta, CEO and Co-Founder of CoinDCX, India’s largest cryptocurrency trading platform and liquidity aggregator, writes:
The far-reaching benefits of cryptocurrencies are already being recognized in other developed nations. […] Without sufficient support and investment to nurture the industry, we risk pushing the innovation, tax revenue, and jobs that these new technologies create overseas, potentially leading to massive brain drain and talent migration. We appeal to you to reconsider your stance on cryptocurrencies and support regulation that does not disadvantage India’s technological potential. We remain committed to working with you to achieve this and to attain a brighter future for the Indian nation.
“Brain drain” refers to a nickname for a scenario where intelligent and professional people begin to exit a country. The phenomenon was most plainly seen in East Germany, where communism was installed as part of the end of World War II. A “mass emigration” of prominent scientists was observed by the London Royal Society, who coined the phrase.
Blockchain Brain Drain
Gupta fears that India’s blockchain talent will flee to friendlier shores.
It’s no secret that the United States is a desirable place to live, so could we potentially see a reversal of the jobs exportation? While India may have a strong telemarketing industry, it may end up with a weak blockchain industry. Smaller countries such as Malta and Estonia have done a lot to attract blockchain entrepreneurs, so there’s no denying the inherent benefit of operating in the US.
The correlation is easy enough to understand. The United States becomes more friendly to cryptocurrency while other countries choose not to; in the end, the United States wins.
In fact, let’s take that a step further. Whichever countries embrace cryptocurrency and blockchain the most will win. That’s all there is to it. Blockchain is going to disrupt numerous industries, and the industries it doesn’t disrupt will eventually be affected by the size and stature of the Bitcoin market.
China has a massive tech sector, but so does the United States. Much of what China produces is at the behest of western companies like Apple, based in Silicon Valley. Blockchain-based projects are going to disrupt many of the sectors in Silicon Valley, whether financially or technically.
That being the case, will it eventually become the Blockchain Valley, with new giants attracting talent from all over the world? Will Donald Trump’s immigration policies affect the people that want to come here for “safe harbor”?
With the SEC giving the green light to a flagging industry (how many ICOs have come to life?), the US could quickly become the hub of the world’s next wave of blockchain innovation.
With an already booming economy and low unemployment across the tech sector, outside help will be needed. Countries, like India, which don’t act quickly will probably lose out on billions in economic activity – if not worse. In the future, some predict, countries will compete for hashpower, and it will likely be an endeavor closely tied to the military-industrial complex.
Additionally, countries like China, which have worked on their blockchain foundations but have been less than kind to cryptocurrency, may see an exodus of projects and companies that would prefer to work in a more financial capacity regarding blockchain.
Thus, for the first time in a long time, the United States might see a reversal of the trend; more workers will come in from elsewhere, to take new jobs that have also come from elsewhere.
The potential effect on the US economy shouldn’t be understated, but the potential negative effect on other economies shouldn’t be disregarded, either, as Gupta writes above.