Emin Gün Sirer, the CEO of Ava Labs and co-developer of the Avalanche protocol, is set to address the U.S. House Financial Services Committee to advocate for sensible laws and regulations that will facilitate the responsible growth of blockchain technologies.
Sirer emphasizes that tokenization, the digital representation of real-world assets, is a natural product of blockchain technology, and “Blockchain builders did not set out to develop the technology to evade laws and rules.” “Tokenization was not created to evade laws. It is the natural product of blockchain technology and an improvement that blockchains offer over traditional systems, just like computer databases were an improvement over paper filing cabinets,” he wrote.
In his testimony, Sirer highlights the significance of achieving consensus among diverse and widespread computers, which blockchain technology excels at. He argues that distributed networks offer increased resilience, security, auditability, and availability for builders.
Sirer’s plea for free, safe, and responsible blockchain innovation comes at a time when the U.S. Securities Exchange Commission (SEC) has taken enforcement actions against major crypto exchanges, alleging the offering of unregistered securities. For instance, the regulator accuses Binance of selling unregistered securities in its complaint against the company and specifically names the assets it views as securities.
These include coins like Solana (SOL), Polygon (MATIC), and Cardano (ADA), as well as the BNB token from Binance, the stablecoin of the exchange, BUSD, Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and COTI (COTI).
However, Sirer contends that the “ability to leverage distributed or decentralized networks is a desirable goal for many reasons that have nothing to do with securities laws, financial services regulation, or the laws and rules governing other areas of commerce, recreation, and communications.”
Todayq news also reports on JPMorgan Chase’s commitment to tokenizing traditional financial assets using its Onyx digital assets platform. Despite regulatory uncertainty and a bear market in the crypto sector, JPMorgan has processed nearly $700 billion in transactions using the permissioned Ethereum-based blockchain. The Onyx platform enables customers to trade tokens representing ownership rights to U.S. Treasuries and use blockchain bank accounts with JPM Coin. The platform’s clientele includes prominent financial institutions, and more are showing interest in signing up.
Furthermore, Christopher Waller, governor of the Federal Reserve, expressed optimism about blockchain technology, smart contracts, and tokenization in the financial market, which was also reported by Todayq earlier this year. Waller highlighted the benefits of smart contracts in improving efficiency, citing experiments by financial firms executing foreign-exchange trades using blockchain technology. He emphasized that this technology offers greater flexibility in settlement time and serves as a risk reducer through its atomic settlement function.
Both Sirer’s advocacy and Waller’s optimism reflect a growing recognition of the potential benefits of blockchain technology and tokenization in various industries, including finance. While regulatory challenges persist, these developments indicate a shift toward embracing distributed networks and decentralized systems. As the world moves toward a more digitally-native future, blockchain technology, in conjunction with artificial intelligence, is poised to play a pivotal role in transforming industries and facilitating innovation.