Throughout American history, technological advances have drawn CEOs into debates over new regulation—whether they initially wanted to engage in it or not. Once the consequences of government regulation on business become manifest, influential CEOs become involved.

The rise of cryptocurrency and the increasing debate surrounding ideas for a Central Bank Digital Currency (CBDC) presents a financial innovation that could have profound economic, fiscal, and monetary implications. This reality will, no doubt, draw CEOs into the discussion surrounding the regulation of digital assets.

The rapid expansion of digital assets has moved beyond just being a concern for tech innovators—it has become a matter of significant political and economic attention. Indeed, the 2024 Republican platform, for instance, opposes the creation of a CBDC and criticizes current cryptocurrency policies, stating: “Republicans will end Democrats’ unlawful and un-American crypto crackdown.”

The interconnectivity of government regulation during periods of innovation and CEO activism can be placed into a historical perspective by reading presidential historian Tevi Troy’s new book The Power and the Money: The Epic Clashes Between Commanders in Chief and Titans of Industry. Troy’s work offers a view of how major industrialists in the past handled the evolving regulation of new technology. His analysis may give some insight into the likely future involvement of CEOs with crypto regulation.

Troy’s book describes how John Pierpont Morgan engaged with government and worked directly with U.S. presidents to stabilize the economy during times of financial crisis. His involvement in the creation of financial policy processes allowed him to innovate and adopt regulation in the context of running a bank where new regulation affected the playing field in more predictable ways because JP Morgan had a center seat at the table.

Today, decisions around how digital assets are regulated will influence the future of markets, consumer behavior, and the global economy. The role of government in these decisions will not only affect businesses in the cryptocurrency space but will also have implications on the broader financial systems, from banking to international trade. Whether defining what constitutes a digital asset or deciding whether a CBDC makes sense, the regulations that emerge will have far-reaching consequences for the global economy. If a CBDC were considered in the US, policy in the area would need to address such issues as potential government overreach, financial surveillance, and disruptions to the traditional banking system.

Cryptocurrency itself challenges the idea of what is money. For business leaders, the regulatory risk surrounding this rising financial innovation could directly influence how involved CEOs are in the creation of policy.

Governments worldwide are considering fundamental economic principles, including how money is created, regulated, and used. The potential introduction of CBDCs could overturn a system of how payments are processed, how credit systems work, how monetary policy is implemented, and how much control the government has over individuals’ wallets. The regulatory decisions made today will shape the future of these systems for decades to come.

For CEOs across multiple industries, the consequences of these decisions will be immense. Poorly designed regulations could stifle innovation, limit market opportunities, place unnecessary burdens on companies, and limit the United States’ competitive advantage around the world. On the other hand, a well-constructed regulatory framework, even one that would preclude a CBDC, could allow for innovation to flourish while maintaining the stability of global financial markets and protecting individual freedoms.

As these conversations evolve, CEOs will inevitably find themselves involved in shaping how these technologies are governed to ensure the security of their own businesses. Troy’s historical analysis is instructive here, particularly his discussion of Hollywood mogul Lew Wasserman’s working directly with President Reagan to prevent an FCC rule that would have negatively impacted movie studios in favor of television networks in the midst of benefiting from technological innovations in broadcasting. According to Troy, Wasserman’s involvement led to Reagan’s rebuke of the FCC. This “rebuke” changed the broadcasting landscape for the next 50 years. Today’s CEOs impacted by financial innovation have no less incentive to sit idly by as change happens. Troy’s anecdotes remind us how CEO involvement in policy discussions can yield significant and long-standing influence over the future.

As blockchain technologies evolve and begin to intersect with artificial intelligence and financial engineering, CEOs will find that their involvement in the evolution of policy is not optional. The rise of digital assets and the industry disruption they potentially bring will inevitably draw CEOs into the regulatory process and the discussion. As Troy’s historical analysis shows, when new technologies challenge existing systems, corporate leaders generally engage with government to grow business and help shape the regulatory landscape.

The scale of disruption brought about by blockchain, cryptocurrency, and artificial intelligence is reminiscent of the impact of railroads in the late 19th century. In that case, government decisions about the size of the rails helped create a level playing field and a consistent standard that allowed America to embrace the new technology to the benefit of the country as a whole.

Digital assets could be the railroads of the 21st century, reshaping not just the tech world but the entire financial system. The regulatory frameworks established today will determine the future of fiscal and monetary policy, affecting industries across the board. For CEOs in the digital assets space, involvement in Washington’s regulatory discussions is not just a strategic decision—it’s an unavoidable reality dictated by the scale and necessity of technological change.

***

Alan Rechtschaffen is a senior lecturer of law, capital markets textbook author, and investor. Alan is a cryptocurrency inventor who has served in multiple non-partisan government policy positions on a federal, state and local level and currently chairs the Digital Assets Forum & Lab at the Wilson Center.