Drama in crypto-paradise
While on vacation on the Balkan’s something caught my eye. On the other side of the Atlantic, in the US, the cryptocurrency universe was sounding all alarms and firing all guns because of a proposed infrastructure bill. By now you might wonder what does Bitcoin have to do with roads and bridges? The Infrastructure Bill is a once in a lifetime investment plan which would see a major renovation investment wave in America’s road’s and bridges but also in zero-emission school buses and charging station’s. And ofcourse someone has to pay for all this. Initially the plan was to beef up the IRS (The government agency responsible for collecting taxes in the US ) to double down on tax fraud by individuals and businesses . This would raise an estimated $100 billion over 10 years. However Republicans didn’t like the idea of extending the mandate of the IRS (or feared it might actually work and their constituency actually would have to pay taxes) so some other source of funding needed to be found. Quickly lawmakerers dropped their eye on the 1.8 trillion crypto-industry. At the heart of the problem was the definition of a crypto “broker,” which was defined so broad that it might include anyone involved in any kind of crypto transaction. Leaders and influencers in the industry were quick to call the mobilise the community to write emails, letters and make phone calls to their representatives in the Senate to table amendments. In the end they lost this fight as the bill moved forward with no amendment taken aboard. A great explainer on the drama can be found here and here.
The big question for us Superlobbyists is of course whether or not the crypto-community could have seen this coming.
Capital requirements, fish, artwork, detergents and more fish
I have seen this at least a dozen times. Lawmakers propose an amendment which seems out of the blue changing the game and forcing you to go into activist mode. The first time this happened to me was when the the European Parliament proposed an amendment which would widen the scope of a phosphorus ban in detergents so that it would include also dishwater detergents. While the difference between detergents and dishwater detergens is just one word it would mean entire assembly would need to close resulting in job losses in my region. We lost that one. While I was’t personally involved, the same thing happened in dramatic fashion for the art industry when an amendment widened the scope of the EU’s Anti Money Laundering regulation to include also transaction’s in the art industry. This forced art dealers to do a KYC when selling for example a painting or a sculpture. Basel (the mother of all banking regulations) almost forced Development Banks operating in Africa to close some of their operations, seriously hampering their capability to help acces to funding to African SME’s.
How to guard yourself and others
The big question for us Superlobbyists is of course whether or not the crypto-community could have seen this coming. The problem in all these cases is that amendments are being tabled in so called flanking policy. Policies that are not core business. That’s way it goes too far to blame industries for not paying attention. They probably were, but didn’t have the strategic foresight (or creativity for that matter) to foresee they would be hit at bills not even remotely related to their core business (infrastructure vs crypto). While you might not always be able to prevent this for happening, the only cure for this is is to dabble outside your comfort zone and into other policy communities . Only by also tapping into information flows that are outside your own will you be able to prevent being blindsided. This is easier said that done as you need to solve your capacity issues. Few of us have the luxury to spend time on unrelated issues (trying explaining to your boss you are going to spend time on fish when you are into farming). Still you need to do something as these Black Swan Events are not Black Swan anymore. Joining an association looks like the most secure way. I know that Business Europe for example has people on policies which you might not expect. The other is indeed to task an intern or a junior to scope for flanking policies that might hit your business. Give him/her the explicit mandate to wander arround in unexplored corridors and hallways. At some point you might even experiment with blindsiding others. I myself have helped lawmakers table amendments whose consequences only became apparent long after the law was adopted. What regulation?
🙂