Today PolicyCast welcomes two guests who were among the first experts to try to bring the wild world of cryptocurrency under the supervision of the U.S. financial regulatory system. Timothy Massad, who is now a Senior Fellow at the Mossavar-Rahmani Center for Business and Government at HKS, is the former chair of the Commodities Futures Trading Commission and one of the first regulators to establish jurisdiction over crypto. Professor Howell Jackson is an expert on financial regulation at Harvard Law School, and a former consultant to the Securities and Exchange Commission when the SEC made its first attempts to wrap its regulatory arms around the blockchain world. Also known as digital assets, cryptocurrencies have been around for more than 15 years, and in that time, they’ve been derided by critics as a purely-speculative asset with zero intrinsic value. Meanwhile, the blockchain that supports them has been criticized as a climate-change-exacerbating energy hog and a technology without a use case beyond helping criminals and terrorists launder money. For most ordinary people, they’ve been viewed as mostly irrelevant, a way-to-risky investment traded by tech bros and basement day traders. But that’s all about to change. Thanks to some new types of digital assets, interest from Wall Street and the Trump administration, and some bills currently before Congress, looks like it could soon be going mainstream and becoming integrated into the financial system, bringing with it both risks and possible benefits. Massad and Jackson join PolicyCast host Ralph Ranalli to discuss what’s new in the world of cryptocurrency, where things are headed, and to share some recommendations on how to make sure crypto is an asset to ordinary people and not the source of the next financial meltdown. Timothy Massad’s policy recommendations for digital asset regulation: ● The top priority should be passing stablecoin regulatory legislation— preferably the McHenry-Waters proposal but either the STABLE Act or the GENIUS Act with appropriate revisions—to stablish a regulatory framework to address the risks of stablecoins. ● Address market structure issues by designating a regulator of the cash market or spot market in the trading of crypto assets, possibly the CFTC, while ensuring that any new regulations in the crypto space do not undermine the good work done over decades in the securities law. ● Clarify the question of when a digital asset is a commodity and when it is a security. ● Eliminate the Bitcoin Strategic Reserve. Howell Jackson’s policy recommendations for digital asset regulation: ● Pass stablecoin regulatory legislation while making sure the regulatory structure reaches foreign entities that interact with the United States. ● Ensure that new regulatory systems not only address the safety and soundness of the markets for stablecoins and other digital assets, but also address illicit finance issues like money laundering and tax evasion. ● Recognize that this is a global problem craft global solution because digital assets can travel everywhere regardless of where they are issued.