The presidential debates so far have given this country a great deal to think about. While we’re paying close attention to what’s been said, I’ve noticed some important things that haven’t been addressed at all. While the candidates have scratched the surface of cybersecurity, the next president needs to be very well informed about fintech. Not just in terms of what could go wrong, but really focused on the opportunity for our nation.
I believe we’re at a magic moment, much like the one we seized in the early 90s when the internet was formed. As a nation, the tremendous opportunity we have is essentially the formation of a new internet, with the financial technology that will become our new infrastructure. Innovators are building the Internet of Value: a system that moves money as seamlessly as information.
We successfully seized a similar magic moment in the 90s and drove adoption and availability through innovation, smart regulation, and cooperation between Silicon Valley and Washington. In fact, the White House created the framework for electronic commerce that was adopted globally – and that we still use this today. By leading this framework, the U.S. had a distinct advantage in developing the internet and resulting digital economy. We have to do the same for the Internet of Value.
It’s not guaranteed that the U.S. will have the same competitive advantage this time around. Now, in the crucial nascent stages, I can already see that we face some significant disadvantages. Our centers of finance, regulation, and tech are separated by thousands of miles and key philosophical differences. Other global fintech hubs like London and Singapore enjoy physical and ideological proximity, and can consequently concentrate their efforts more easily than we can. This race is theirs to win.
The next president needs to have fintech on their agenda. Distributed financial technology provides us a pivotal, breakthrough moment and the nation that moves fastest to seize it will have leadership in the Internet of Value. If we are to stay on top economically, if we are to find a way to close the gap of economic inequality, this is the key. New technologies like blockchain will be a catalyst to increase financial inclusion and lower the barriers to commerce.
We see this happening in three key areas of economic development: 1) Small and medium-sized businesses will have access to new international markets through efficient cross-border payments, 2) Consumers will be able to send and receive money in real-time via retail remittances, and 3) Corporates and new digital businesses will be able to make high velocity payments of any value seamlessly. The Internet of Value has the potential to enable that growth. The tech and the market are ready; the next president must ensure that the government is as well.
I suggest that the next president appoint a fintech advisor to ensure that the White House has a firm grasp on what’s at stake. Since the crisis of 2008, consumer protections have been uncoordinated and applied inconsistently at times. In their eagerness to protect American consumers, regulators can unintentionally paralyze positive innovation. Earlier this year, U.S. Government Accountability Office highlighted this challenge saying:
Fragmentation and overlap have created inefficiencies in regulatory processes, inconsistencies in how regulators oversee similar types of institutions, and differences in the levels of protection afforded to consumer.
[This structure] consumed significant agency resources and resulted in lengthy delays in introducing product innovations to the markets.
Our next president must have reliable expert advice to temper that instinct, and to seize this crucial moment. When I look at the future of this incredibly powerful technology, I’m confident that the Internet of Value will be truly transformative. But we can’t do it alone. We need the support of a well-informed administration in Washington to maintain our lead. When it comes to fintech, this race is ours to lose.