Web 3.0 is the next big phase of the internet, which is currently dominated by centralized networks run by digital behemoths such as Google, Facebook, and Twitter. Individuals and groups participate with decentralized and democratized internet networks that are safe, open, self-governing, and permissionless.
Despite fears that cryptocurrencies may be used to evade sanctions because of the inherent transparency provided by blockchain technology, cryptocurrencies are not proving to be a scalable means of evasion in their current form. In reality, according to Chainalysis, transactions employing illegitimate addresses accounted for just 0.15 percent of all cryptocurrency transactions in 2021.
Uncertainty over the legal and regulatory handling of crypto assets is a roadblock. Too many entrepreneurs, consumers, and investors have been put off by unsettled policy questions, stifling national economic progress and financial inclusion.
Policymakers in the United States, for example, should understand not just the obstacles, but also the potential presented by Web3. Lawmakers should prioritize and adopt new legislation that offers a complete regulatory response, addresses unresolved innovative challenges, closes oversight gaps, and encourages entrepreneurs to safely innovate in the Web3 economy.
That said, creators and investors should develop a uniform risk assessment methodology for cutting-edge enterprises. Targeted queries and answers can replace a general notion that Web3 enterprises are “risky.”
Policymakers’ work can be made easier. Asking a regulator for clarification on Web3 and crypto is naturally intimidating, especially with a technology as wide as Web3. Because the internet is such a vast technology, regulations would differ based on whether you’re talking about regulatory frameworks or data privacy, and so on.
There will always be areas where extensive rules and legislation are required, and enterprises should not be afraid to advocate for them. However, large swathes of Web3 and crypto will simply be new methods to perform the same old things. Not all revolutions are revolutionary. And if that’s the case, let’s focus on the legal certainty that does exist.
If the government’s lack of passion is a hurdle then we need to make things a lot simpler for them. Even if we succeed, they may still drop the ball. Or, regardless of the influence of any individual Web3 firm, their politics may drive them to support established interests.
The new Executive Order on Ensuring Responsible Development of Digital Assets issued by the Biden Administration is a great step forward in acknowledging the need for national leadership in global technology inquiry and development. It should result in a strong policy response that modernizes obsolete statutory and regulatory systems that have failed to provide adequate clarity on how crypto assets should be treated.
To accomplish bipartisan goals of economic advancement, inclusive markets, and job creation, a balanced, contemporary regulatory framework that catalyzes development and provides economic transition is critical. What is even more important is safeguarding consumers and companies from fraud.