Understanding digital assets is key to global leadership

by Zain Jaffer

In June 2023, the US ramped up its efforts against crypto by going against major exchanges like Binance and Coinbase, and major cryptocurrencies like Solana, Polygon, and Cardano. This was a continuation of their earlier efforts against crypto friendly banks like Silvergate and Silicon Valley Bank. Understandably for millennial and boomer leaders who grew up in the analog era, understanding digital assets is a challenge.

Contrast that to a pronouncement by UK’s Prime Minister Rishi Sunak about Andreesen Horowitz venture capital’s office opening in London. Andreesen Horowitz, also known by the shortcut “A16Z” is one of Silicon Valley’s top venture capital firms. Sunak commented about the move in his Twitter feed:

@rishisunak

Great news that @a16z – one of the world’s leading tech investment firms, is opening a new base here in London. Another huge vote of confidence in the UK as a place to build and grow tech businesses of the future.[1]

Aside from this PM Sunak also tweeted a photo of the door of 10 Downing Street, the official residence, with a digital binary code instead of the number 10. Prior to this, he also led efforts by the UK Royal Mint to issue an official NFT.[2]

Sunak is one of those new wave of young leaders who believe in crypto. However that’s not necessarily true with his fellow young leaders elsewhere.. Canadian Prime Minister Justin Trudeau is not a fan, but that is primarily because of the fact that he had to invoke an Emergency Act after Canadian trucker protesters were able to raise $1M worth of donations using Bitcoin.[3]

Old age is generally associated with experience. However sometimes that can be a disadvantage if that old experience is already obsolete, and leaders just use their power and influence to prop up old entrenched interests without considering the advantages of the new technology. Just listen to the comments of powerful personalities like US President Joe Biden, Senator Elizabeth Warren, Berkshire Hathaway’s Warren Buffett and Charlie Munger, JP Morgan’s Jamie Dimon, and the like.

Admittedly the crypto and blockchain industry needs to separate the wheat from the chaff. Negative news and factors like the FTX, Celsius, Three Arrows Capital, and outright scams call for the development of some regulation to weed out those problems. The October 2023 trial of Sam Bankman Fried brings this problem front and center.

The problem is that regulations need to be developed for digital assets. According to most crypto industry leaders, using the 1946 US Supreme Court decision on SEC vs. Howey is inadequate and not fit for purpose. Fortunately other jurisdictions like the EU and Hong Kong have implemented more appropriate measures such as the Markets in Crypto Act (MiCA) and the legalization of crypto in HK as well as places like Singapore, Dubai, and others.

For the Baby Boomer and Millennial generations who grew up with LP records, pay phone booths, paper stock certificates, and other analog experiences, the concept of digital assets and ownership is a major mental hurdle. What they have forgotten is that once upon a time, they were the rebels who listened to rock and roll records against the wishes of their own elders.

But for Generation Z and Alpha, who grew up in a purely digital world and are used to buying in-game digital assets, owning digital crypto is just a natural extension of that. These youngsters often play and communicate via Discord and other tools. Buying in-game “skins,” weapons, and other paraphernalia are part of what they accumulate and sell to their friends and fellow gamers. They have no bias against digital assets, as they have never emotionally bonded with analog assets like the ones mentioned above.

Crypto and blockchains are the future of finance. Protecting the older way of doing transactions does people a big disservice and does not really protect their financial future. Having a leader who sees that for a country’s future is vital for global success.

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