Let the Innovators Innovate

Brian Brooks, Coinbase’s legal chief, believes that the U.S. government should consider stepping back and letting the private sector take the reins in developing a digital dollar. In an insightful article for Fortune, he raises a crucial question: should the U.S. government create the digital dollar, or can the private sector do it better? Spoiler alert: Brooks thinks the latter is the way to go!

Innovation Needs Breathing Room

In his vision, Brooks emphasizes that innovation thrives when it operates without heavy-handed interventions. “The best path forward is one that harnesses our country’s remarkable capacity for innovation while respecting how government historically sets broad guide rails for financial endeavors,” he asserts. This means a division of labor, where the private sector builds the tech, and the public sector manages monetary policy. Think of it as a dance where both parties have distinct roles but must work together for a beautiful outcome.

Guarding Against Overreach

Brooks articulates a palpable concern that our government might choke the vibrant cryptocurrency atmosphere and the potential of groundbreaking blockchain technologies. He passionately argues, “The U.S. can take the lead without exerting unnecessary control over technology decisions that are increasing access to our financial system.” It’s like trying to enjoy a barbecue while someone is constantly shoving lighter fluid into the flames—too much control can snuff out the creativity!

The China Factor

Enter Mike Wasyl, a managing partner at DeerCreek, who shares Brooks’ apprehension. He bluntly states that the U.S. is mired in a regulatory slow dance, while China is gearing up for a breakdancing competition by aggressively pursuing its Central Bank Digital Currency (CBDC). “China is making these very large macro plays,” he remarks, noting their intent to stay ahead in the digital currency race. Whereas the U.S. looks like a tortoise, China is sprinting away like a hare on steroids.

Collaborative Future

For a digital dollar to succeed, the U.S. must promote an ecosystem where crypto firms can innovate freely and creatively without fear of overregulation. Collaborative efforts that strike a balance between innovation and regulation could empower both central banking authorities and consumers alike, paving the way for a trustworthy financial landscape. So, it’s time for policymakers to loosen the grip and let innovation flourish—because who doesn’t love a good underdog story?