The House Energy and Commerce Committee Subcommittee on Innovation, Data and Commerce gathered on June 7 to discuss blockchain technology and the future of Web3. Crypto industry members, including Ryan Wyatt, president of Polygon Labs and legal experts appeared before the committee to engage in a much more amicable dialogue. This meeting was held just after the SEC announced back-to-back lawsuits against major crypto exchanges Binance and Coinbase.
In Wyatt’s testimony, he discussed the potential of blockchain technology and its value to users, as well as the benefits of building a healthy and well-regulated blockchain ecosystem in the United States. Wyatt began by addressing the fundamental problem that blockchains solve, which is the “value extraction” problem on the Internet. He explained that in the current era of the internet – referred to as “Web2”, large centralized tech companies extract value from users by charging fees for goods and services and collecting user data for their own benefit.
According to Wyatt, blockchains offer a solution to this problem by democratizing the Internet and creating a Web3 that is based on decentralized and transparent systems. Blockchains use cryptography and a network of computers to secure and maintain information, eliminating the need for a centralized authority. In this Web3 model, users have control over their data and can choose when, how, and whether to share it with applications and services.
In regards to how the U.S. government could partner with the industry to advance modernization, Wyatt mentioned that the current regulatory environment is a major barrier. By fostering a well-regulated blockchain ecosystem, the U.S. can maintain its competitive edge and ensure the technology industry thrives domestically: “When regulation does not meet novel technology where it is, the U.S. loses its competitive edge over other countries.”
Finally, Wyatt argued that building a blockchain technology ecosystem in the United States is beneficial for Americans. It can drive economic growth and create jobs, both in the technology sector and non-technical sectors. It also allows for better consumer protection by leveraging the transparency of blockchains and aligning regulation with novel technologies.
Wyatt’s testimony provides several examples of Web3 applications and use cases, such as blockchain-based consumer loyalty programs, non-fungible tokens (NFTs) in the fashion industry, blockchain-based community organizations and blockchain solutions for supply chain management in the U.S. Air Force and the Department of Defense. The hearing comes on the heels of a separate House hearing Tuesday, where the Agriculture Committee grilled exchange executives and former regulators on compliance and consumer protection. It also marks the first time lawmakers have hosted a crypto hearing that addressed non-financial use cases.