Blockchain Revolution

THE SENATOR WHO WOULD CHANGE THE WORLD

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The Canadian Senate surprised many when, in June 2015, its Committee on Banking,
Trade, and Commerce released an unambiguously positive and thoughtful report,
“Digital Currency: You Can’t Flip This Coin.”
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Incorporating feedback from
multiple stakeholders in the blockchain ecosystem, the report detailed why
governments should embrace blockchain technology.
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“This could be the next Internet,” said Doug Black, the Canadian senator from
Calgary, Alberta, and a major contributor to the report. “This could be the next TV,
the next telephone. We want to signal both within and outside Canada, we support
innovation and entrepreneurship.”
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Like Ben Lawsky, Black is a veteran lawyer. He
made his career in the country’s oil patch, working on behalf of oil and gas producers
as a partner at one of the country’s most prestigious law firms. Senator Black differs
from Mr. Lawsky, however, in his reluctance to rush new regulations out the door.
“Government should get out of the way!” Black told us.
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As members of the
Canadian Senate, Senator Black and his colleagues have no formal legislative role,
but can move the needle on important issues by issuing guidance or making
recommendations to the government. Still, with an average age of sixty-six, the
Canadian Senate wouldn’t be the odds-on favorite to embrace this cutting-edge
technology. But that’s exactly what they did.
Reflecting on the process, Black recalled thinking, “How do we create an
environment that encourages innovation as opposed to stifles innovation? . . . That’s
unusual for a government to take that point of view from the get-go.” According to
Black, governments “tend to be concerned about maintaining control and minimizing
risk.”
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While acknowledging the risk any new technology poses to consumers and
business alike, Black explained, “There’s risk in anything; there’s risk in fiat currency.
We can manage risk at some level, but let’s also create an environment where
innovation can be fostered.”
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With this report, Black believes they’ve hit the mark.
The report makes a number of recommendations, but two stand out. First, the
government should start using the blockchain in its interactions with Canadians. Black
said, “The blockchain is a more confidential vehicle to protect data”; therefore,
“government should be looking to start utilizing this technology, which would be a
powerful message.”
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This is a powerful statement: if you want to be the hub for
innovation and a pioneer in the sector, put your money where your mouth is, and start
innovating yourself.
The second recommendation is perhaps even more surprising: the government
should take a light touch on regulation. A number of respected figures in the legal
profession who focus on blockchain technology have made this argument. Aaron
Wright of Cardozo School of Law, Yeshiva University, advocates for “safe harbor”
laws that allow innovators to keep innovating while minimizing government

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regulations until the technology matures.
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Josh Fairfield, of Washington and Lee
University Law School, said, “We need regulations that act like technology—humble,
experimental, and iterative.”
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