Bill Clinton appeared at a Ripple event to talk crypto policy and gave a speech on the future of cryptocurrency, arguing against overregulation. This seems to be at odds with Ripple’s lobbying efforts to push regulation through, but looking through both the former President’s regulatory history, and what Ripple is actually trying to achieve, it is clear that they both want the same thing.
Ripple is very cozy with American politics, recently unveiling a lobbying group with the vaguely Orwellian name ‘Securing America’s Internet of Value Coalition’ which is attempting to push regulation through. Recently, Ripple had Bill Clinton as their keynote speaker for their Ripple Swell event.
At the event, Clinton made a pronouncement that if the government overregulates cryptocurrency “you end up killing the goose that laid the golden egg,” and seemed to imply that regulation should be kept only for combating bad actors in the crypto space like criminals, fraudsters, and money launderers, though, as reported by the Bitcoin Exchange Guide the full speech is not readily available to the public, but a number of smaller clips have been released.
In an interview with Bloomberg, the CEO of Ripple stated, “I hope there’s more regulation,” arguing that regulation is necessary for the maturation of crypto tokens as a financial assets. This statement seems to be at odds with Clinton’s call to limit regulation of the crypto market, but if we examine Clinton’s legislative history and the approach Washington is taking to regulating the Internet more generally, its not hard to see that they might be reaching towards a common consensus.
$XRP how funny would it be if the centralized #crypto is the one that actually gets adopted out of the bunch!! Ripple says 3 clients are putting xRapid into full commercial use https://t.co/K8v3Uhy3UD pic.twitter.com/mlwmhnawu9
— Kunal Desai (@kunal00) October 1, 2018
We actually have a very good analog for the type of governance which Clinton is arguing for by looking at the Telecommunications Act of 1996 passed by Clinton.
This piece of legislation did several things, notably expanding FCC control to the internet, and gave away digital broadcasting licenses to existing media companies while reducing the ability for the government to break up media monopolies.
This had major effects on television and internet media, and essentially solidified a government sponsored monopoly. Ralph Nader later described as a categorical example of corporate welfare.
The Telecommunications Act and the expanded powers of the FCC were sold to the American public on the promise that they would foster competition by providing free markets through deregulation, but in reality the effects were intensely anti-competitive. By providing telecommunication much freer reign, economic mobility, and limiting anti-trust legislation, the number of major media companies declined from around 50 to around 6.
At the same time, the monopolization of media freezed out an eclectic variety of enterprises, including small and local television and radio stations, transforming the media landscape into the sparse set of well controlled news and entertainment outlets we know and loathe today.
The same year as the Act, The Electronic Frontier Foundation published A Declaration of Cyberspace Independence, which stated that the Telecommunications Act ‘repudiates your own Constitution and insults the dreams’ of the founding fathers, and that cyberspace is where the dream was reborn.
The EFF looked to the internet as the way forward for media freedom, and called on cyberspace to be an egalitarian space of equal participation which could be found less and less on traditional media formats. Unfortunately, this dream is under attack by many of those in power.
Trump and the administration currently in Washington is currently fighting efforts to ensure net neutrality in the name of keeping the marketplace free for enterprise. This is a perfect example wherein deregulating a marketplace is anti-democratic, because removes protections from consumers, and puts control in the hands of just a few companies.
I would pay good money to see all those people complaining about Obama’s FCC chairman voting to repeal #NetNeutality actually explain it in detail. I’d also bet most hadn’t heard of it before this week. #outrage
— Donald Trump Jr. (@DonaldJTrumpJr) December 15, 2017
I probably don’t have to tell you that there is significant criticism from users of the Internet who find this argument disingenuous, and who don’t want the FCC to be given further control over the Internet, lest what happened to radio and television to happen to the web.
By removing regulations which protect the access of smaller companies, and by reducing the ability for governments to break up monopolies, deregulation in these cases actually erodes the democratization of the market through consolidation in terms of capital as well as control.
Ripple likely does want more regulation, in the sense that it wants Congress and the SEC to push forward clear legislation which allows Ripple to be the first to get the huge influx of investment which will come as soon as traditional financial institutions feel it is safe to invest in digital currency. Bill Clinton likely does want to fight off ‘overregulation’ by allowing companies who already have market control to keep it, and to act unilaterally against smaller competitors, gobbling them up into a cartel of companies monopolizing their market sector.
Ripple is already seeing widespread adoption of its technologies by the traditional banking system. Ripple’s relationship with the financial sector, and their potential hold over the use of the blockchain in banking would benefit tremendously from the kind of powers and license which a ‘Telecommunication Act’ of cryptocurrency would give them. Ripple has already seen a lot of criticism for the centralized design of their XRP token, as well as the fact that Ripple itself is keeping 60% of the XRP it has issued.
Ripple CEO @bgarlinghouse: “Silicon Valley loves to talk about disruption … at the end of the day sometimes disruption is exactly what you don’t need.” For Ripple, “It wasn’t about replacing banks … there’s an opportunity to be a builder and partner with the industry.” pic.twitter.com/p3TtESImAB
— CoinDesk (@coindesk) October 1, 2018
Ripple and Clinton likely want the same regulation to go through, and given that Ripple is recently positioning itself to influence Congress in a big way through lobbying efforts, as well as the Trump administration’s positions of net neutrality, FCC control, Clinton’s Telecommunication Act of 1996 might see an echo in the regulation of cryptospace, which, if history is any guide, will have the same destructive and antidemocratic effects that Clinton’s bill had on a vibrant, competitive, innovative technology sector.