Todd Phillips, board member at Open Frontier, warns that falling behind in digital currency innovation could let rivals set the rules of the financial system—threatening market integrity, consumer protections, and America’s ability to lead responsibly.
What is the biggest risk if the U.S. falls behind on digital currency innovation?
The U.S. financial system is the envy of the world, but as financial technologies evolve, so must it. If we fall behind, we risk losing that leadership. We need to ensure our institutions are able to can adopt new technologies that make their activities more efficient, but we must ensure that it both that strengthens the real economy and upholds progressive values.
When Congress creates a regulatory structure, we need people at the table who will embed fairness, transparency, and protections against systemic risks inclusion into the rules. Digital finance can—and should—reflect those values.
What’s the single most important regulatory reform needed to bring clarity to the oversight of the crypto sector?
Congress must demarcate define the line between digital crypto securities and crypto commodities. If lawmakers fail to act, the courts will decide case by case—an outcome that leaves investors, developersinnovators, and consumers within uncertainty. We need a clear, values-based framework that ensures every asset operates under meaningful oversight. Without that clarity, real-world use cases cannot develop and regulators have difficulty stamping out fraud and other abusesthe system fragments and the public loses trust.
How can policymakers protect consumers and market integrity without freezing innovation?
Congress should set broad, durable principles—anchored in fairness and security—thatand then allow regulators to adapt as markets evolve. That balance lets innovators experiment responsibly while giving consumers and investors the protection they deserve. Good regulation isn’t static—it’s a living framework built on trust and accountability.
What does effective regulation look like in a fast-moving market?
Effective regulation balances stability with agility. Congress defines the vision; regulators execute it in real time. We need public institutions that can meet the moment—agile enough to evolve with technology, but principled enough to preserve integrity and democratic accountability.
These markets already exist. The question isn’t whether we’ll regulate them—it’s how.
We have the opportunity to shape digital finance in a way that reflects our progressive values and strengthens democratic oversight. That’s the kind of leadership America should bring to the table.