Interview by David Berger, CEO of the Digital Currency Council, with Perianne Boring of the Chamber of Digital Commerce – a trade association dedicated to advocating for digital currencies to public policy makers.
David: Thanks for your time today, Perianne. Could you tell us a bit about your background and how the Chamber of Digital Commerce came to be?
Perianne: As a financial services journalist and broadcast journalist, I spent a considerable amount of time researching the digital currency industry and interviewing Bitcoin CEOs and entrepreneurs. Regulatory risks have always been one of the top concerns of industry leaders and investors. In talking with my peers and colleagues in the industry, the need for a formal organization to represent the industry in Washington quickly became apparent. So we went about forming the Chamber of Digital Commerce.
David: New law and regulation that could impact the digital currency economy is being debated each day in Washington, DC and New York, among many other places across the globe. What is the Digital Chamber doing to educate policy makers?
Perianne: This year the Chamber held the inaugural Bitcoin Education Day event where we flew in over 30 Bitcoin professionals from over 12 states to brief Congressional staff. In one day our participants briefed over 70 Congressional offices on Bitcoin and brought education materials to the entire US House of Representatives.
As the Chamber is growing, we are also putting together a DC-based government affairs operation to educate policymakers. This includes full-time monitoring of the regulatory and legislative landscape from federal and state regulators, US Congress, the Administration, consumer groups, trade associations, and foreign lawmakers and regulators.
In addition, we also work with companies in the digital currency space to ensure they understand their legal and compliance risks and responsibilities. What we are finding is that a significant amount of small businesses are struggling to navigate the regulatory landscape.
David: Are there any initiatives coming out of the Chamber?
We launched our “risky business” campaign in October to help organize and educate the industry following some aggressive moves towards enforcement that are coming out of multiple federal agencies. To prepare for heightened government oversight and potential enforcement actions, the Chamber is holding a series of free webinars and AML compliance boot camps throughout the country over the next three months.
The Digital Chamber strongly believes that proactive engagement and dialogue with policymakers are crucial for our growing industry to achieve prosperity and a pro-growth regulatory environment.
The first webinar is Wednesday, November 12 at 1:00 PM/PST. To register, please visit: http://digitalchamber.org/risky-business-webinar.html
David: There has been much in the news about the proposed BitLicense in New York, but less about the debates and discussions happening in Washington, DC. Is this a case where Washington is looking to the states for leadership?
Perianne: While BitLicense in NY is getting its fair share of attention, there are a host of other activities related to digital currencies that the federal government is engaging in. Some of which include:
- How to tax virtual currencies (Internal Revenue Service)?
- Should bitcoin be treated as a commodity on the open market (Commodities Future Trading Commission)?
- Are issuing presales or crowdsales considered a securities offering (Securities and Exchange Commission)?
- Can terrorist organizations abuse American companies and use their products and services to fund terrorism (Homeland Security)?
- What are appropriate consumer protections (Consumer Financial Protection Bureau)?
There is actually a lot of activity on the federal level happening, but it is not grabbing headlines.
David: Regulators, like New York Department of Financial Services Superintendent Ben Lawsky, have talked about balancing innovation with consumer protection. Is there a solution? How do you think regulators will strike this balance?
Perianne: The key with so many of these issues is education, and engagement is integral in coming to solutions on these complicated issues. The Chamber addresses this issue in detail in our BitLicense comments.
In short, “when formulating high quality regulation, it is fundamental to make the distinction between the word “Bitcoin” spelled with an upper case “B” and the word “bitcoin” spelled with a lower case “b.” The first is a reference to Bitcoin — the protocol (the “Protocol”) and the second is a reference to bitcoin — the digital asset, which also can be used to settle commercial transactions. This distinction is important because it draws a line between those applications of crypto-currencies that appear to have been the focus of the regulation and those that are not.”
The Chamber has organized an informal BitLicense working group to build consensus and facilitate dialogue between industry and the NY DFS.
David: Which national regulatory department is of most concern to the Bitcoin community? FinCEN? IRS? Where are your efforts focused in DC?
As we look at history, every emerging industry faces increased scrutiny and oversight by the government. Digital currency is no exception to that rule.
What’s most concerning is not coming out of any specific department, rather that so many different federal agencies and departments are asserting jurisdiction over the digital currency industry, which is causing a patchwork of inconsistencies and conflicts in the law. If the industry does not have a robust voice in that discussion, the regulators are going to set the rules for the discussion. It is in the industry’s long-term interest to have an active voice in that discussion.
David: The IRS has issued guidance that Bitcoin should be treated as property, while recent U.S. District Court rulings consider it to be a currency. Will congress step in with legislation to settle this question?
Perianne: Congress can definitely shape the discussion and debate by holding hearings, launching investigations, passing bills and amendments, etc. The Chamber will engage and appeal to as many policymakers as needed to protect the industry’s interest, which could include advancing legislative remedies.
David: If congress does get involved, will Bitcoin legislation fall along party lines? Or might we actually see both sides of the aisle cooperate?
Perianne: Bitcoin is not a partisan issue and should never become one. Bitcoin is about technological innovation. The public policy discussion is how do we establish guardrails that do not interfere with innovation.
David: Are you optimistic or pessimistic about the regulation coming out of New York and DC in 2015? What can the Bitcoin community expect?
Perianne: On October 14, Superintendent Lawsky stated that an updated proposal would be issued following the close of the initial comment period (which closed on October 21).
I am not very optimistic it is going to be favorable, but that is why the industry has to be engaged and fight for its interest.
David: How should members of the Bitcoin community be more involved?
Perianne: We would love to see them more engaged with their policymakers. One of the things that the Chamber is going to focus on is organizing and engagement for the industry. We hope that they visit our site and reach out to us to get more involved.
David: Perianne, thank you very much for your time, insight and support of the Digital Currency Council.
Perianne: Always happy to talk about digital currencies with you, David!