AI, like cryptocurrencies, is likely to face intense scrutiny from regulators around the world in the coming years. What obstacles do government rules and regulations have in store for panelists?
“I think the United States, in particular, has been bad at this [regulation],” Lin said, referring to the U.S. Securities and Exchange Commission’s heavy-handed approach to regulating cryptocurrencies. “Now [SEC Chairman] Gensler has said we will regulate AI even more aggressively than blockchain digital assets.”
Fintech company PayPal launched its PayPal USD (PYUSD) stablecoin pegged to the U.S. dollar seven months ago, and Lin asked DeSilva about his views on U.S. regulation.
“I don’t think the U.S. has bad regulation,” DeSilva said. “Look at all the innovation that’s going on in the United States.”
Sure, it can sometimes be frustrating to deal with government agencies, but “regulators have a mission,” he explained, “not to harm consumers.” They’re trying to protect consumers, and there’s nothing inherently wrong with that. Or, as he said from the stage, “If you want your technology, your innovation, to be used by millions or billions of consumers, you’re going to have to engage with regulators.”
Still, other jurisdictions, including the European Union, are becoming more hospitable to stablecoin issuers, and the U.S. needs to keep that in mind. “If the U.S. doesn’t start acting faster, that advantage will fade away,” DeSilva admits. “The U.S. is struggling to get the right level of urgency.”
Finding the right amount of regulation could become even more challenging with artificial intelligence. “It will be difficult for regulators to deal with the potential harm to consumers given the opacity of the artificial intelligence decision-making process – the so-called ‘black box’ problem – and I think regulators will struggle with that,” DeSilva added.
This opacity could present an opportunity for blockchain technology with its transparency, immutability and traceability. Lin said: “Blockchain can act as a sort of lord and savior, saying: “Regulators, we have a mechanism that can remove the opacity associated with these black boxes.”
