Ron Hammond & The Blockchain Association: A Catalyst for Crypto Regulation

In Washington, DC, Ron Hammond emerges as a central figure in the ongoing saga of cryptocurrency regulation. Currently the Director of Government Relations for The Blockchain Association, and with a background steeped in the intricacies of Capitol Hill, Hammond’s journey reflects the dynamic interplay between industry stakeholders, regulators, and policymakers. 

From his pivotal role in shaping the bipartisan Token Taxonomy Act to his leadership at The Blockchain Association, Hammond’s insights offer a compelling narrative of the challenges and opportunities shaping the regulatory landscape for digital assets in the United States amidst a background of regulatory complexities.

If you didn’t catch Genfinity’s podcast yesterday, you’ll definitely want to check this out!

Ron Hammond’s background

Ron Hammond, based in Washington, DC, boasts an intriguing journey. He told us about serving on Capitol Hill for five years with roles under different members of Congress where he dove into finance policy. Amidst late-night deliberations on Capitol Hill, the emergence of the 2017 Bull Run sparked his interest in cryptocurrencies. 

For over two and a half years, Hammond collaborated with industry experts to shape the bipartisan Token Taxonomy Act. He stated that the act aimed to provide regulatory clarity around different types of crypto assets — securities and commodities — by clearing up the jurisdiction of the SEC and CFTC. Furthermore, he emphasized the act was the first bipartisan crypto regulatory bill, and although it didn’t pass, it helped start important discussions around US crypto regulation. 

Further juggling responsibilities from healthcare to tax policy, he navigated the complexities of Capitol Hill. Transitioning to Ripple as an in-house lobbyist also provided valuable insights. However, Hammond’s passion for shaping policy led him to The Blockchain Association, advocating for a comprehensive regulatory landscape. Balancing bipartisan cooperation and addressing misconceptions, he champions constructive dialogue on Capitol Hill.

The Blockchain Association

The Blockchain Association is a non-profit that advocates for the crypto industry, educating policymakers and shaping regulations to ensure a secure and competitive digital asset marketplace. Led by major investors and companies, it serves as the collective voice of the crypto sector in the United States.

Hammond emphasized The Blockchain Association’s role in educating legislators. He stated that the lack of clear regulations in crypto is causing confusion and hindering progress. The SEC and CFTC disagree on whether existing rules apply to crypto, leading to enforcement actions against companies. These actions target specific areas like NFTs and DeFi, but often lack clarity on the underlying principles.

Court decisions highlighting gaps in regulation and pressure from other countries are pushing for a legislative framework. The FTX collapse, while negative, has provided impetus for action in Congress. However, some lawmakers are wary of the industry after FTX and hesitant to engage. This highlights the need for The Blockchain Association to educate policymakers and differentiate between legitimate companies and bad actors.

Current US regulatory landscape

U.S. vs. the world

We wanted to understand Ron’s perspective on recent developments in US crypto regulations. Specifically, we were interested in whether the US is making progress compared to how other countries are approaching crypto regulation.

Ron built upon what many of us already know — the cryptocurrency industry faces a complex regulatory landscape in the US. The main challenge comes from the Securities and Exchange Commission, which is seen as hostile to crypto. The industry is trying to counter this by supporting other regulators like the Commodity Futures Trading Commission (CFTC) which has a more positive stance on crypto. Additionally, they are putting pressure on the SEC through Congress and public opinion.

There is an ongoing competition between the US and other countries regarding crypto regulations. The US is seen as lagging behind with its slow and unclear approach. The upside of the US system is its transparency, which allows businesses to plan for the future. Courts are another avenue for the industry, but the process is slow and unpredictable. Finally, mobilizing voters who care about crypto is a new strategy that is starting to show some promise.

Financial institutions

We inquired further about this lack of regulation, not only for crypto, but specifically for the financial sector. We wanted to know if financial institutions may be advocating for themselves, benefiting from the status quo and viewing blockchain as an eventual threat. Essentially, we are perplexed to see the regulations as stagnant despite the clear trends toward blockchain and crypto adoption.

Firstly, Ron spoke about lobbying in Washington D.C. He argued that, while some industries use lobbying to try to eliminate competition, this strategy is ineffective in most cases. Banks, for example, haven’t lobbied to outlaw crypto entirely, yet he feels they have lobbied to slow down regulation so they have time to adjust their internal systems.

Next, he discussed the slow pace of legislation related to crypto, one of The Blockchain Association’s main interests. Hammond cited an example of the Senate Banking Committee’s reluctance to act, noting that both Republicans and Democrats have failed to get legislation through the committee. He opines that the committee is especially cautious because of the 2008 financial crisis. However, he points out that the political landscape is changing. There’s a growing bipartisan sentiment against big banks, and there’s a growing awareness of crypto among younger generations. This could lead to faster movement on crypto regulation in the future.

CBDCs

Hammond gave us some insights surrounding CBDCs. He believes the debate around Central Bank Digital Currency (CBDC) is multifaceted. One key aspect is the ideological clash. Proponents include the “MMT crowd” (Modern Monetary Theory) who favor progressive ideas like postal banking. This puts them at odds with Republicans who inherently distrust such government involvement.

Privacy is another major concern. Both sides worry about government overreach and potential misuse of transaction data. The political spectrum on these issues is complex. There are instances of unlikely alliances, like collaboration between progressives and some Republicans on privacy issues. However, national security concerns often trump privacy arguments. These concerns are evident in attempts to regulate self-hosted wallets, for example, despite their similarity to cash in terms of privacy.

“We’ve been really playing a lot of defense both in the Trump administration and the Biden administration for self-hosted wallets. Because, if the government is not going to know what you have in your physical wallet with cash — and you don’t have to log (a transaction) with an agency when you give someone $5, that should probably be the same rules for your digital wallet.”

The entire CBDC debate hinges on future events. A major crypto crisis could force Congress’s hand and lead to concrete legislation. While the FTX situation didn’t gain enough traction, a similar event could trigger action from agencies like the Office of Foreign Asset Control. Crypto’s entanglement with geopolitical issues ensures these discussions will remain dynamic and challenging.

Bridging the Gap

We posed another question — does Ron believe there is a lack of education regarding blockchain technology in Washington, and, if it’s not a lack of knowledge, how can the industry encourage positive change?

Hammond painted the picture that the world of cryptocurrency regulation can be divided into two buckets: those in the weeds and everyone else.

The “in the weeds” group consists of legislators, regulators, and industry experts who understand the nitty-gritty details of crypto technology and policy. These are the people who have the real in-depth conversations about how regulations should be crafted.

Everyone else includes the general public and many congressional representatives who have limited understanding of crypto. Public discussions about crypto regulation are often unproductive because these two groups struggle to communicate effectively.

Furthermore, early attempts by the crypto industry to engage with Congress often involved overly technical explanations or unrealistic goals.  However, social media platforms like Twitter (X.com) have become a valuable tool for educating congressional staffers on crypto issues. The Blockchain Association believes that by following crypto thought leaders, staffers can gain a better understanding of the industry and make more informed decisions.

In closing

Looking to the future, Hammond emphasized that lawmakers prioritize use cases that resonate with their constituents. While financial use cases haven’t gained much traction yet, the potential for artists to benefit from NFTs excited Democrats. However, the industry needs more real-world applications that directly impact everyday Americans and are easy to understand, especially for older demographics. Similar to AI, crypto needs to overcome misconceptions and demonstrate its broader value beyond financial speculation. This is a long-term effort that requires clear communication and a focus on practical benefits.

Notably, Ron Hammond predicts movement on crypto legislation in the House of Representatives within the next few months. There might also be progress on regulations for stablecoins from the SEC and CFTC by the end of the year.

You can join The Blockchain Association here.  

*Disclaimer: News content provided by Genfinity is intended solely for informational purposes. While we strive to deliver accurate and up-to-date information, we do not offer financial or legal advice of any kind. Readers are encouraged to conduct their own research and consult with qualified professionals before making any financial or legal decisions. Genfinity disclaims any responsibility for actions taken based on the information presented in our articles. Our commitment is to share knowledge, foster discussion, and contribute to a better understanding of the topics covered in our articles. We advise our readers to exercise caution and diligence when seeking information or making decisions based on the content we provide.