A regulatory environment characterized by widespread uncertainty is the single biggest challenge facing entrepreneurs in the digital currency and blockchain industry, according to J.D. Seraphine, who produced the docuseries “Open Source Money.”
The show, which started airing July 4 on Discovery Science, follows the challenges of Joe Roets, the architect, founder, and CEO of Dragonchain, as well as other members of his team, as they deal with a U.S. Securities and Exchange Commission (SEC) investigation.
While this program, composed of five episodes, is still running, Seraphine took the time to provide an exclusive interview, where he shed some light on his views of government regulation.
Charles Bovaird: Correct me if I am wrong, but one major message of your new show, Open Source Money, is that the current regulatory environment is stifling innovation in the digital currency and blockchain sector.
J.D. Seraphine: That is correct, I came into the space to explore the potential of utilizing the technology in the media sector. Once I got deeper into the industry, I saw the massive potential for blockchain technology to transform the world.
As a producer and entrepreneur, I had a front row seat to watch the impact in the U.S. that negative statements from government officials and media along with regulatory uncertainty had on entrepreneurs, the market and the overall industry.
Bovaird: Just so I can get a better sense of your views, do you subscribe to the assertion that government intervention stifles the free market? In this instance, I am not referring specifically to digital currencies and/or blockchain, but instead to the entire free market.
Seraphine: I think by and large, free markets are best served by a light touch approach from government. There is a need for a certain amount of action to enforce laws and punish bad actors, but I believe, overall, government is meant to serve the people not the other way around, so any actions it takes should be in the best interest of its citizens.
Bovaird: How would you describe the U.S. government’s regulatory approach to digital currencies and blockchain? Do you think their approach is too aggressive? Do you think this particular space should not be regulated at all?
Seraphine: The U.S. government has had an overall uneven approach to regulating digital currencies and blockchain. It is a fairly new and complex technology so part of that is attributed to a learning curve for regulators and government officials.
There are also multiple agencies who have claimed jurisdiction over the regulation of digital assets each classifying them differently, making it very difficult for companies to know how to operate in this industry in the U.S.
The industry needs clear regulations and rules or for the government to step back completely like they did with the early days of the internet.
I believe this gray area of uncertainty is the worst thing for entrepreneurs and companies attempting to operate here, and it has led to other countries moving ahead of the U.S. in pioneering what many are calling the most important technology since the creation of the internet.
Bovaird: Do you think that the regulatory approach the U.S. government is taking with this space could prove beneficial to industry? For example, do you think that a more mature legal framework could help encourage more people to get involved in the space?
Seraphine: I think going forward the U.S. can still reestablish itself amongst the leaders of innovation in the fields of blockchain technology and cryptocurrency, but that window is closing fast.
A more mature regulatory environment will benefit entrepreneurs and companies in the space and also provide the kind of certainty major players will require before providing investment and infrastructure to support further development in the U.S.
Bovaird: Do you think skeptical investors might be more likely to take part in the digital currency and/or blockchain space if regulators could provide a regulatory framework that is both clearer and more mature?
Seraphine: Definitely, a clearer and more mature regulatory environment will draw in investors that are currently on the fence about building in the U.S.
We are losing mindshare in the global blockchain marketplace, so the opportunity for the U.S. to re-establish itself as a leader of innovation in blockchain is now, or we will be entirely left behind in this industry and it will be costly.
The conversation has been edited and condensed for clarity.