Interview Of The Week

Interview Of The Week, Sheila Warren, Crypto Council For Innovation

Sheila Warren is the Chief Executive Officer of the Crypto Council for Innovation (CCI), a global alliance that includes influential crypto industry leaders Coinbase, Fidelity Digital Assets, Block, Gemini, Andreessen Horowitz, Ribbit Capital, and Paradigm. The group was formed to demonstrate the transformational promise of crypto and educate policymakers, regulators, businesses, and the public. Prior to joining CCI, Sheila served as the World Economic Forum’s Deputy Global Head of the Centre for the Fourth Industrial Revolution, Head of Data, Blockchain, and Digital Assets, and a member of its executive committee.

 Warren, who graduated with honors from Harvard College and Harvard Law School, began her career as a Wall Street attorney at Cravath, Swaine & Moore before turning to philanthropy and civic technology. She worked as a senior executive and general counsel at TechSoup. She also designed and launched NGOsource, a service focused on international grantmaking. Warren, a current co-host of “Money Reimagined”, CoinDesk’s popular podcast, recently spoke to The Innovator about the evolution of the blockchain and crypto.

Q: What is the Crypto Council For Innovation and why did you join?

SW: We are a global evidence-based advocacy organization focused on the crypto ecosystem. Our aim is to ensure that the opportunities, and current challenges, of this singular innovation are addressed correctly into policy and regulations. I joined because I truly believe that Web3, as the next generation of the Internet is being called, is poised to create new models of social engagement and impact how we engage with people and machines for generations to come.  I took on this role because I felt it was important to focus on the crypto economy full-time and do my part to ensure that this ecosystem is equitable and inclusive.

Q: So much of the discussion around Web3 focuses on easy riches rather than solving hard problems in decentralized finance, trust, and identity. Is there progress in each of these three areas?

SW: Financial services have a lot of room for innovation via decentralization because of the inefficiency and exclusion baked into the current system. With DeFi we are seeing attempts to disrupt current financial services such as lending, credit, and insurance. As for trust, society is currently combatting a tidal wave of false information. It is increasingly difficult to separate fact from fiction as there are no longer clear arbiters of truth. Blockchain, the technology that underpins cryptocurrency, gives us a method of securing information in a decentralized immutable way. I just did a Money Reimagined podcast on this topic with my co-host Michael J. Casey. It was focused on wielding blockchain technology against disinformation. Our guest was Jonathan Dotan, founder of Starling Lab, an academic research lab working on latest cryptographic methods and decentralized Web protocols. One of the projects he worked on with USC was on using the blockchain to safeguard 55,000 archived testimonials of Holocaust survivors. We should do the same with evidence of war crimes being committed in Ukraine so that it can be presented at trials that will begin years from now. The ability to prove that information is authentic would go a long way to improving trust in government, public authority, and business. Identity is the most difficult. One newer example of innovation in this area is Verite, an open-source framework for proving identity claims in Web3 without exposing sensitive personal information.  There is a lot of activity focused on how to get identity to travel from place to place. Scaling that will be a huge undertaking, but it is the way the Internet is moving in response to centralized platforms. It is going to be really powerful when it is unlocked.

Q: What is the timeline?

SW: A lot of companies already have blockchain in their tech stacks, so it is already happening. Just as this is largely invisible to private enterprise, the use of a blockchain is also going to be largely invisible to consumers. I really think in 18 months to two years we are going to see tremendous movement. The timing on identity is an open question but I believe that in five years blockchain will be ubiquitous and the uses of NFTs will be clarified and clear.  Right now, things like DeFi and even NFTs, are still very early and very new. If it seems a little chaotic that’s ok. It’s healthy. You just need to be careful not to confuse one thing for another – there is already a lot of variety in the crypto ecosystem.

Q: You recently contributed to the U.S Government Accountability Office (GAO) report on blockchain. What are the key policy proposals?

SW: The working group landed on four high-level policy proposals to help enhance the potential benefits and mitigate the challenges of blockchain technology. These proposals are for policymakers of all backgrounds—including Congress, state and local governments, and leaders in business, academia, and nonprofit institutions.

1) Policymakers could consolidate blockchain standards. This could help make it easier for organizations trying to use blockchain to integrate the technology with their existing systems.

2) Policymakers could either clarify existing rules and regulations or create new ones around blockchain. This could reduce the current uncertainty around how different implementations of the technology might be regulated, which could help companies and others feel more comfortable about adopting blockchain solutions.

3) Policymakers could support the development of blockchain educational materials. This could help users avoid common blockchain scams and companies be more able to find talent to help them implement the technology.

4) Policymakers could consider using blockchain to meet their own specific goals. This could help public and private-sector institutions determine whether the technology could help resolve specific problems.

The GAO- report recognizes that this is a nuanced conversation. It is hard and its complicated and we need to get it right.  In March President Biden signed an Executive Order outlining the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology. The order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. It takes a cautious approach but recognizes that governments need to not only pay attention to this but embrace the use of digital assets in their own services.

Q: How should business be thinking about crypto and Web3?

SW: If you didn’t have someone tracking developments in this space five years ago you are behind. If you don’t have one now you are really behind. This is not a fad that will vanish. It is very real. Look at how fast CBDCs [Central Bank Digital Currencies] are developing and what is happening in Ukraine: the government there is crowdsourcing cryptocurrency to pay for military defense and humanitarian aid.  It is just a matter of time for the use of crypto and blockchain to become mainstream. Pay attention. Watch what is happening. Know that this is not a black and white conversation. It is complicated and nuanced so you need to be strategic and thoughtful in your approach. Be ready for it. Crypto will be an economic engine for our society. The next generation of billionaires will  be engaged with crypto. Engagement with this technology is inevitable so companies should be thinking how they can create an environment that embraces this economic growth engine, allowing innovation to thrive while making sure that there are guardrails.  It is important for companies to be working to ensure that the jurisdiction in which they are headquartered is crypto friendly  because this technology is going to thrive wherever it is permitted to do so and the tide it creates is going to lift many boats.

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About the author

Jennifer L. Schenker

Jennifer L. Schenker, an award-winning journalist, has been covering the global tech industry from Europe since 1985, working full-time, at various points in her career for the Wall Street Journal Europe, Time Magazine, International Herald Tribune, Red Herring and BusinessWeek. She is currently the editor-in-chief of The Innovator, an English-language global publication about the digital transformation of business. Jennifer was voted one of the 50 most inspiring women in technology in Europe in 2015 and 2016 and was named by Forbes Magazine in 2018 as one of the 30 women leaders disrupting tech in France. She has been a World Economic Forum Tech Pioneers judge for 20 years. She lives in Paris and has dual U.S. and French citizenship.