On Friday of last week, the CCC submitted a response to the Request for Information on Digital Assets Research and Development, which was released in January by the OSTP and NSF’s interagency Fast Track Action Committee (FTAC) on Digital Assets Research and Development. The RFI aims to inform a holistic government approach to understanding and regulating digital assets and distributed ledger technology. The response was written by Hank Korth (Lehigh University), Rajmohan Rajaraman (Northeastern University), Catherine Gill (Computing Community Consortium), and Ann Schwartz (Computing Community Consortium).
The term “digital assets” implies a financial application of the term, but digital assets actually have a much broader meaning. Digital assets refer to anything that exists digitally, is uniquely identifiable, and has or provides value in some way. Digital assets can refer to stocks and cryptocurrency, but it can also refer to images, videos, books, logos, and even social media accounts.
Often when digital assets are discussed in the news it is in relation to failed cryptocurrency schemes, such as the FTX scandal. Many Americans are understandably wary of digital assets and blockchain technology, because many of them have lost money investing in cryptocurrencies or know someone who has. The Request for Information itself reflected this viewpoint, with a heavy focus on the risks introduced by digital assets and blockchain technology, and how to mitigate these. While the FTX collapse was undeniably a catastrophic failure, the collapse was not due to underlying issues with the blockchain or digital assets, but rather complete mismanagement of company funds. We believe it is important to make this distinction, because any technology can be utilized by bad actors, but that doesn’t mean the technology itself is flawed. We also discussed the costs of not innovating in the field of digital assets and letting other countries surpass the United States, thereby reaping the benefits of innovation and leaving the US to catch up.
Finally, we recommended the following suggestions to the federal government to help ensure that the era of digital assets is led by the US:
- Direct support for research and development in the blockchain technologies that support digital-asset management, particularly investment in academic research.
- Encouragement of the development of digital-asset systems that enable a mix of privacy, transparency, and regulatabilty by creating a framework that enables policy choice and appropriate levels of decentralization.
- Augmentation of R&D support with support for educational initiatives and expansion of educational offerings in blockchain and digital-asset technologies both in the STEM disciplines and in the disciplines impacted by digital-asset technology.
- Promotion of positive-use-case examples in the digital-asset space to inspire projects to enhance national economic competitiveness and social good.
