As companies adopt new technologies like crypto and AI, governments worldwide will need to revamp their existing laws to account for companies that will become more reliant on machines and less reliant on humans, Jeremy Allaire, CEO of the stablecoin giant Circle, said Monday at the Coins2Day Global Forum.
TL;DR
- Governments must update laws for companies relying on crypto and AI, moving beyond human-centric legal systems.
- Legal systems worldwide will likely evolve into machine-governed economic systems within the next decade.
- US states are actively introducing AI legislation, with California requiring AI model transparency.
- Recent US legislation on stablecoins and upcoming crypto market bills signal a shift towards regulatory clarity.
“Most of our legal systems are not built around the idea of a corporation itself being entirely run by machines on the internet,” he added. “My own belief is that over the next five years—and certainly over the next five to 10 years—almost every legal system in the world will need to be a machine-governed economic system.”
Allaire’s comments come as nations race to catch up with the breakneck pace of AI development and the increasing adoption of blockchain technology at major financial institutions.
Since January, all 50 U.S. States have introduced AI-related legislation, according to the National Conference of State Legislatures. That includes California, which passed a law in September requiring AI developers to publish public frameworks about how their models incorporate industry best practices, among other requirements.
Amidst the surge of AI-related laws, governments, particularly the U.S., have also placed importance on enacting rules for cryptocurrencies. In July, President Donald Trump signed legislation establishing legal boundaries for stablecoins, which are cryptocurrencies tied to assets such as the U.S. Dollar. Furthermore, the Senate is considering a broader bill that addresses crypto market organization and specifies the roles of federal agencies in overseeing different types of crypto assets.
The federal government's current push for crypto legislation represents a significant reversal, especially given President Joe Biden's administration's previous actions against crypto firms, which industry supporters characterized as a form of “regulation by enforcement.”
“There’s been a lack of clarity on regulations,” Jenny Johnson, CEO of asset manager Franklin Templeton, said at the Coins2Day Global Forum, referring to the obstacles that have prevented large finance companies from adopting crypto.
But with the recent passage of stablecoin legislation and upcoming negotiations over the crypto market structure bill, that appears to have changed. Now, traditional financial institutions like Franklin Templeton and the bank Standard Chartered have leaned even further into digital assets and transact “on chain,” that is, on blockchains.
“We have had, and have had for a long time … a conviction that most, if not all things, will settle on chain,” said Bill Winters, CEO of Standard Chartered, at the event.