Drama in crypto-paradise
I couldn’t help it. While on vacation in 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 has 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 roads and bridges but also in zero-emission school buses and charging stations. And of course, 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 lawmakers 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 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.
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Capital requirements, fish, artwork, detergents and more fish
I have seen this at least a dozen times. Lawmakers propose an amendment that 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 European Parliament proposed an amendment that 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 detergent is just one word it would mean the entire assembly would need to close resulting in job losses in my region. We lost that one. While I wasn’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 access to fund to African SMEs.
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 the so-called flanking policy. Policies that are not core business. That’s why 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 from 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 than done as you need to solve your capacity issues. The point is that you need to be in the information flows. Nine out of ten times I was lucky it was because a contact in my network flagged an issue by stating exactly this sentence: Hey, you might want to look into this, I think it is relevant for you.
Few of us have the luxury to spend time on unrelated issues (trying to explain 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 true 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 around 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?
🙂