Now expand that impact to a young artist in Yangon, Myanmar, who is starting to see a way out of poverty. She’s deeply rooted and utterly visionary, making digital work that mixes Indigenous motifs with cyberpunk adventure. But access to the global art market is a forever dream. Banks are iffy, international payments are a logistical nightmare, and the political landscape is always teetering on the edge. She finds out about an Illinois based NFT platform. It’s colorful, optimistic branding and the promise to onboard Southeast Asian artists, providing them with a lifeline to a truly global audience. Suddenly, that dream feels tangible.

Now come the Digital Assets and Consumer Protection Act (DACPA) under consideration in Illinois.

Is Consumer Protection Worth This?

At first glance, DACPA does seem like a great idea – protect consumers from the Wild West of crypto. If you scratch the surface, you’ll find a new regulation that might prematurely close the door on those prospects. This has the potential to impact millions of people, like our artist based in Yangon.

The proposed licensing regime is burdensome. The Illinois Department of Financial and Professional Regulation (IDFPR), already struggling to modernize its existing processes, would be tasked with overseeing a complex and rapidly evolving industry. They are already two years behind on their CORE modernization, with essential licenses conversions still overdue. Can we honestly assume that they will be able to do this flawlessly in a brand new area of public finance?

This isn't about arguing against all regulation. It’s not about trying to go after regulations, it’s about saying is this particular regulation, in the way that it’s currently written, the best approach. So are we seriously protecting consumers? Or are we simply building walls that punish the very people who stand to gain the most from the democratizing potential of blockchain tech?

New York's BitLicense: A Cautionary Tale

New York’s BitLicnese, implemented several years ago, is a very forbidding example. It’s a story that illustrates the harm done by excessive and unnecessarily restrictive regulation. Beyond stifling innovation and driving companies out of the state, it failed to deliver on its purported objectives. If we aren’t, what’s stopping us from making the same mistakes here in Illinois?

The argument that DACPA is needed for consumer protection crumbles quickly under scrutiny. The fact is that nearly all crypto fraud comes from overseas, well outside Illinois jurisdiction. So, who are we really protecting? It’s like building a seven foot fence in your backyard to block a hurricane.

Innovation's Price: Southeast Asia Pays?

Here's the unexpected connection: DACPA isn't just about Illinois. It's about the global landscape of opportunity. Southeast Asia has a rapidly-growing tech community and rich creative sectors. This framework has made this region a powerhouse for growth and innovation in the Web3 space. These are frequently communities with not only little access to traditional financial infrastructure, but extreme levels of corruption. Crypto offers a real alternative.

Or consider a young startup in Jakarta developing a DeFi platform to help deliver microloans to underserved communities. They decide to locate their business operations in Illinois due to its reputation as a home for innovation. DACPA’s licensing requirements quickly become a catch-22. The costs and compliance burdens are crushing. Bureaucratic hurdles can squelch their dreams before they even start!

This isn’t just a question of winning profits, this is a question of winning future potential. We know blockchain has the potential to uplift underrepresented communities. It can advance equity and inclusion, supporting the participation of unbanked and underbanked communities in our 21st century economy. By implementing unnecessary and overly prescriptive regulation, Illinois threatens to lose these positive developments. More urgently, it forecloses on some of the most important opportunities to those who need it the most.

Is it fair that a bill designed to protect consumers in Illinois could inadvertently limit opportunities for artists, entrepreneurs, and innovators thousands of miles away? I don't think so.

  • Capital Access: Startups in Southeast Asia often struggle to secure funding. Illinois-based crypto platforms could provide access to capital and mentorship.
  • Regulatory Clarity: While crypto regulations are emerging in Southeast Asia, they can be inconsistent and unclear. Illinois, with its established legal framework, could offer a more stable environment.
  • Global Market Access: Illinois-based platforms could connect Southeast Asian creators and entrepreneurs to a global audience.

We need targeted, functional, and manageable regulation. Not a draconian, one-size-fits-all boondoggle that kills innovation and slams the door on deserving candidates. Lawmakers need to pause. Most importantly, they need to diligently consult with the communities that will feel their effects. They should think through the unintended consequences that might arise from their actions. Before they sign off on Senate Bill 1797 and House Bill 742, they need to ask themselves: Are we building a wall, or are we building a bridge?

Is it fair that a bill designed to protect consumers in Illinois could inadvertently limit opportunities for artists, entrepreneurs, and innovators thousands of miles away? I don't think so.

We need targeted, functional, and manageable regulation. Not a sweeping, one-size-fits-all approach that stifles innovation and shuts the door on those who need it most. Lawmakers need to pause. They need to engage with the communities that will be affected, and they need to consider the unintended consequences of their actions. Before they sign off on Senate Bill 1797 and House Bill 742, they need to ask themselves: Are we building a wall, or are we building a bridge?