The Foreign Service Journal, April 2023

THE FOREIGN SERVICE JOURNAL | APRIL 2023 27 What ShouldWe Know About Digital Currency? Sheila Warren is the CEO of the Crypto Council for Innovation, the premier global alliance for advancing the promise of this new technology through research, education, and advocacy. A Harvard-trained lawyer who started her career as an attorney at Cravath, Swaine & Moore, she most recently ran the tech strategy division of the World Economic Forum, regularly briefing heads of state, ministers, and CEOs. Here are her responses to questions posed by the FSJ in January. In this Q&A, Crypto Council for Innovation CEO Sheila Warren offers a primer on newly emerging, complex financial technologies like digital currency and blockchain. A nuanced and informed approach to policymaking and regulation is needed. FSJ: What do U.S. diplomats working with governments and nongovernment entities around the world need to know about blockchain and digital currency? SheilaWarren: First, blockchain and digital currencies rep- resent foundational technologies. A digital currency is a form of money that exists only in digital or electronic form. It’s a broad category—including crypto, central bank digital currencies (CBDCs), stablecoins, and other emerging models. It may or may not be underpinned by blockchain technology, which is a form of distributed ledger that has cryptographically secured records. We should be thinking of these technologies much like the internet, as layers that will underpin the exchange of value, interaction with applications, and management of our online identities in the future. People often get tied up in the technicalities, but those should be secondary. It’s more important to understand the unique prop- erties of these innovations and what they enable . We don’t need to understand the inner workings of the Simple Mail Transfer Protocol (SMTP) to know what value email brings to our lives. The same applies here. Second, there is a diversity of projects in crypto. Blockchain protocols and digital currencies make different decision choices around governance, economic incentives, and more. Thus, a nuanced and informed approach to policymaking and regulation is needed. FOCUS ON DIGITAL CURRENCY: A NEW FRONTIER FOR DIPLOMACY