Dr. Emin Gün Sirer testifies before the US House of Representatives Financial Services Committee

The Owl
By and The Owl
Dr. Emin Gün Sirer testifies before the US House of Representatives Financial Services Committee

Dr Emin Gun Sirer, Founder & CEO of Ava Labs, testified on 13 June 2023 before the US House of Representatives, House Financial Services Committee on Fostering responsible growth of blockchain technology.

Watch his 5 minute introductory speech below.

Ahead of his appearance, the Committee published his written testimony which can be read in full below or here

Fostering Responsible Growth Of Blockchain Technology

Testimony of Dr. Emin Gün Sirer Founder & CEO, Ava Labs, Inc.

Before the United States House of Representatives, House Financial Services Committee

Chairman McHenry, Ranking Member Waters, and Members of the Committee.

It is an honor to be here with you today. I thank you for the opportunity to appear before you as a computer scientist to discuss blockchain technology, its innovative uses, why it is impactful to the economy, and how to understand the use cases that blockchain will support. With an understanding of these key concepts, it is possible to develop sensible regulatory frameworks and ensure the technology will thrive in the United States.

There have been several testimonies before this Committee regarding blockchain, but they have been primarily provided by lawyers and business people. To that end, I hope this testimony will provide a helpful overview of blockchain and tokenization from a technology and computer science perspective. I will focus on blockchain’s ability to transform society by making digital services more efficient, reliable and accessible to all.

The collective goal is that the United States should seek to enable the free, safe, and responsible proliferation of blockchain technologies and their many applications so that, as a country, the United States and its citizens can benefit greatly from the economic growth that blockchain technologies will enable.

My Background

I am the founder and CEO of Ava Labs, a software company founded in 2018 that is headquartered in Brooklyn, New York, whose mission is to digitize the world’s assets. Ava Labs is a software company that builds and helps implement technologies on the Avalanche public blockchain and other blockchain ecosystems. We have developed some of the most significant recent technological innovations in blockchain, including the biggest breakthrough in consensus protocols following Bitcoin. Before founding Ava Labs, I was a professor of computer science at Cornell for almost 20 years, advancing the science of blockchains with a focus on improving their scalability, performance, and security. During that time, I consulted with various U.S. government agencies and departments on a range of topics. I have made fundamental contributions to several areas of computer science, including distributed systems, operating systems, and networking, with dozens of peer-reviewed articles (among other things, I am one of the most cited authors in the blockchain space after Satoshi Nakamoto). I hold a National Science Foundation CAREER award and previously served on the DARPA ISAT Committee. I serve as a member of the Commodity Futures Trading Commission’s Technology Advisory Committee. But I am perhaps most proud of having helped write a parody of the blockchain space with John Oliver.

The Big Picture

We are living through a period of unprecedented technological progress and transformation. The computer revolution set this trend in motion, initially with mainframes and later with personal computers. However, these early systems were limited by their "stand-alone architecture," capable only of processing local data and executing local computations. Although they made existing tasks more efficient, they failed to create a multiplier effect due to their lack of network connectivity. 

The emergence of the internet and, subsequently, world wide web marked a pivotal shift from isolated, local computing to global-scale computing. Architecturally, we transitioned from standalone computers to a "client-server architecture," which enabled us to connect to remote services operated by others to leverage their programs and capabilities. This new paradigm gave rise to digital services that catered to the entire world, created millions of jobs, and solidified the U.S.'s position as a global economic leader.

Blockchains represent the next phase in the evolution of networked computer systems. Whereas the client-server systems that power the web today rely on point-to-point technologies to connect clients to servers, blockchains facilitate many-to-many communication over a shared ledger. This allows multiple computers to collaborate, achieve consensus, and act in unison. Blockchain technologies allow us to build shared services in the network. In turn, this enables the development of unique, secure digital assets, more efficient financial services systems, tamper-proof supply chain tracking, digital identity solutions, and transparent voting systems, among many other innovative applications. By harnessing the power of blockchain technology and the digital uniqueness it allows us to create, we can redefine trust, ownership, commerce, recreation, and communications, ultimately transforming how we interact with digital systems and each other.

The implications of this breakthrough are far-reaching. Blockchain technology allows us to create systems that reduce costs, increase efficiencies, and gain more control over our digital lives and the virtual world. Additionally, we can establish new kinds of 2 marketplaces, novel digital goods, and services that empower individuals and communities to foster economic growth and social impact.

The advancements from blockchain technology will result in leaps forward, just like the internet itself, because they will improve the internet itself. This technology creates a new kind of public good, namely, a shared ledger that can be purposed for a wide range of applications. As we enter the era of customizable blockchains and smart contracts, the fine-tuning of this software will further enhance and improve what the technology delivers today while empowering compliance with relevant regulations.

Blockchains and Smart Contracts: Impact Across Applications

Blockchains solve a long-standing challenge in computer science: enabling a diverse set of computers worldwide to reach consensus (agreement) on a piece of data and the larger dataset to which it belongs. While it may appear obscure at first glance, this is a crucial building block for solving complex problems that traditional internet systems struggle to address, such as creating digitally unique assets, tracking their ownership, and safely executing business and other processes. In doing so, this technology does not have to rely on humans or intermediaries for its security properties; in fact, it typically provides strong integrity guarantees even in the presence of (partial) system failures.

Let me be clear: this ability to leverage distributed or decentralized networks is a desirable goal for many reasons that have nothing to do with securities laws, financial services regulation, or the laws and rules governing other areas of commerce, recreation, and communications. Distributed networks are more resilient, secure, auditable, and available for builders. Blockchain builders did not set out to develop the technology to evade laws and rules. We set out to solve computer science problems.

The potential applications for blockchain technology are vast and varied in contrast to the client-server model where many functions are expensive or impossible. Below, I will discuss just some of the key applications and innovations blockchains enable.

Blockchains are evolving rapidly

Blockchain technology has evolved rapidly in the 14 years since Satoshi Nakamoto introduced Bitcoin to the world. The Bitcoin blockchain pioneered a consensus mechanism – the way that the data is agreed upon by participating computers – popularly and inaccurately known as "proof-of-work." Bitcoin has demonstrated to the world that public, permissionless blockchains are possible. The topic of consensus was known in computer science literature as "byzantine fault tolerance" and research into creating such systems had been funded by the National Science Foundation and DARPA, and involved hundreds of academics, myself included, for multiple decades. Bitcoin solved the problem and proved to the world that this technology could create and maintain a digital asset, as well as establish and transfer ownership over it. Bitcoin has remained up and accessible, even as it weathered numerous attacks throughout its 14 years, without a central authority or controller maintaining its health. In contrast, even the best client-server services built by Microsoft, Google, Amazon, and Facebook have experienced numerous outages during the same timeframe.

Computer scientists did not stop there. Subsequent blockchain technologies have expanded this core functionality. Most notably, Ethereum introduced the concept of smart contracts, self-executing programs encoded on blockchains. Smart contracts can facilitate all manner of applications, including currently popular ones like peer-to-peer lending, social networks, digital collectibles such as NFTs and gaming skins, and the tokenization of real-world (traditional) assets on a single chain governed by a uniform set of rules.

The latest breakthrough in blockchain architecture is known as multichain blockchains. In these systems, developers can create chains with custom rule sets, execution environments, and governance regimes tailored to their needs. Not only does this level of customization unlock use cases previously not possible on blockchains with single rule sets, but it also isolates traffic and data into environments purpose-built for a task or application. Examples of these systems include Avalanche and Cosmos, which enable the creation of specialized blockchains, sometimes referred to as subnets or app-chains, that can be compliant by design.

For instance, SK Planet, a company in South Korea, recently created a specialized blockchain on Avalanche that onboarded more than 58,000 fully identified customers in its first few days. Additionally, Ava Labs is working with Wall Street firms to create a specialized institutional blockchain. With a multichain architecture, operators have complete control over who can access the chain, who secures it, what token, if any, is used for transaction fees, and more.

There is a general trend here. Blockchain technology is evolving rapidly and naturally progressing towards making itself more flexible and secure. In other words, it has been through code that many challenging issues have already been addressed.

The lesson from these developments is clear: Policymakers should enunciate clear objectives based on the particular implementation of the technology (that is, the activity it is used for), while leaving the mechanisms of achieving those objectives up to experts to determine. Because we can customize blockchain implementations, it is easier than ever to regulate the implementation rather than the technology, and achieve neutrality of regulation.

Regulation in The Token World

Blockchains are technologies that allow us to build resilient and fault-tolerant applications. They are, in effect, openly programmable platforms that their users can interact with as if they are a public commons. This powerful construct naturally gives rise to many different kinds of applications and, consequently, tokenization, the creation of digital representations of bundles of rights, assets, and other things.

All tokens are not equivalent in their implementation or function – they must be treated differently according to their essential nature. Tokens cannot simply be lumped together under a single set of regulations because they vary so widely in function and features. A good analogy is paper; we regulate the bundle of rights, assets, or things created by the words, numbers and pictures on the page.

Types of tokens include but are not limited to:

  • A real-world asset: A token can be the direct or indirect representation of a traditional asset. For example, one could tokenize land ownership such that each token corresponds to a uniquely identifiable piece of land. In many cases, real-world assets are already regulated, and their digitization into a blockchain format should not necessitate wholesale new regulation.

  • A virtual item: A token can represent a piece of digital art, a collectible, a gaming skin, and more. These can be varied in function and form as well. They can range from simple non-programmable pictures, a common use of NFTs, to complex assets, some used in games, that can encode all sorts of functions and features of the asset directly inside the asset itself.

  • Pay-for-use: Public blockchains constitute shared computing resources that must be allocated efficiently. A token is the perfect mechanism to meter resource consumption and prioritize important activities. Such tokens are sometimes known as "gas tokens." For example, BTC is the gas token of the Bitcoin blockchain, ETH for Ethereum, AVAX for Avalanche, and so on. Without gas or transaction costs, a single user or small group of users could potentially overwhelm the blockchain, similar to a denial of service attack, making the blockchain unusable.

The list above covers expansive categories...

But remains just a snapshot of what is happening and what is possible. I encourage you to review our Owl Explains educational initiative for more information. As a matter of first principles, the determination of the regulatory regime must start and end with the functionality and features of the token, not the technology used to create it. At Ava Labs, we call this sensible token classification.

Let me be clear again: Tokenization was not created to evade laws. It is the natural product of blockchain technology and an improvement that blockchains offer over traditional systems, just like computer databases were an improvement over paper filing cabinets.

In addition to sensible token classification, regulations that pertain to tokens must be devised in a manner that can be enforced at a layer that has access to the necessary information for enforcement. In the same way that we do not expect internet routers to check the verity of content sent on social media applications, we cannot impose a regulatory burden on technology layers that are unaware of the content or operations carried out on-chain. The platforms already provide features, such as lockups and transfer restrictions, that can assist in coding these limitations.

Enhancing Market Efficiency, Transparency, and Oversight

Blockchains and smart contracts can be the foundation of a more transparent and efficient financial system that enables all participants to share a level playing field. This includes regulators, who can have greater visibility than ever before into the actions and activities of all market participants. Privacy remains an important component of any system. Developing these new ways of providing and regulating financial services should incorporate personal privacy. These improvements can only come with the support and collaboration of regulators and policymakers by providing sensible laws and regulations that allow for the responsible growth of the technologies.

How has this played out in the wild? A perfect example is the trustworthiness of exchanges.

Last year saw the failure of several crypto-asset exchanges, most notably FTX. Make no mistake: these failures were not failures of blockchain technology. They were failures of traditional custodians who were supposed to secure user deposits. Not a single major decentralized exchange was affected by a similar failure. Blockchain technology is purpose-built to eliminate this reliance on centralized intermediaries, who can jeopardize user funds, market integrity, and other desired features of a well-functioning system.

In addition to on-chain custody and transacting, a more recent breakthrough known as enclaves enables new marketplaces where code severely constrains what even the owner and operator of the marketplace can do. This innovation can rule out unwanted behaviors like front-running, stop-loss hunting, and breaches of privacy that challenge market integrity. Ava Labs’s own Enclave Markets is at the forefront of this innovation, which we call fully encrypted exchanges.

Another example that points up the benefits of engaging in activities on-chain as opposed to with centralized parties comes in the lending context. Last year saw major failures of lenders and borrowers who conducted their activities off-chain, while the major on-chain lending platforms weathered the stormy markets mostly unscathed. These protocols adeptly navigated liquidations and collateral calls in rapidly falling markets, due to their reliance on over-collateralization and automated systems. While there is no panacea, the evidence so far points to the success of decentralized networks in managing stress conditions much better than centralized counterparties. These results are in line with what blockchain design predicts.

Stablecoins as the Digital Gateway for the U.S. Dollar

Stablecoins, which are predominantly denominated in United States Dollars, are expanding globally because they are a superior way of holding dollars. Stablecoins not only enhance the user experience—by increasing the velocity of capital and reducing the cost of transferring it—but also cater to a growing demand for stablecoin dollars among those facing economic uncertainty and hyperinflation in their local economies.

By transforming the dollar's capacity to retain value into an accessible product outside the U.S., stablecoins help individuals protect their life savings from fluctuations in the value of their local currencies and from being stolen by criminals and other rogue actors.

This potential can be realized with appropriate regulation, which allows for the responsible growth of stablecoins through new technologies and configurations.

Blockchains Can Accelerate Recoveries from Climate Disasters with Insurance

Consider the emerging property insurance crisis catalyzed by more frequent and extreme climate events. State Farm, the largest property insurer in California, announced it will no longer provide insurance due to the risk of wildfires. Insurers in Texas, Florida, Colorado, and Louisiana have felt the same pressure to stop provisioning insurance, increase rates, or find backstops for insolvency.

Who will communities in these states, and in the U.S. as a whole, rely on to insure their homes and economic futures? If the industry consolidates as bankruptcies hit smaller regional insurers, how will that risk be managed?

Using smart contracts and the Avalanche network, Lemonade Foundation is now providing insurance to more than 7,000 farmers who previously only had access to products with unaffordable premiums or delays in payout that had lasting, multi-season impacts. These premiums were not economically feasible for the organization due to the manually-intensive processes now condensed into a single smart contract. As another example, in 2019, the U.S. government completed the accounting for Hurricane Katrina disbursements, a full 14 years after its catastrophic impact in 2005. The delays stemmed partly from the difficulty of achieving agreement among the many stakeholders participating in this process.

In 2012, Superstorm Sandy damaged almost half a million homes and incurred roughly $50B in damages. The same gaps in insurance payouts stifled urgent recovery efforts across the East Coast. Families who had paid their premiums for years were given pennies on the dollar to rebuild their lives. By the time their lawsuits led to action and more financial payouts, the damage had been done, and scars set on these communities. Blockchain-based distributed ledgers can significantly streamline such processes, and our company is collaborating with Deloitte under a FEMA contract to develop and implement this technology.

Supply Chain and Fighting Counterfeiting

Global supply chains are facing challenges relating to the expedited demand for goods and pandemic-driven strains, including our most security-critical infrastructure. When supply chain problems hit, they can be especially problematic, and when there is fraud, the problems are exacerbated. Blockchains and smart contracts can help secure and validate supply chains for various global sectors.

Blockchains can perform supply-chain management to provide a reliable and transparent record of a product's origin and authenticity. The Tracr platform from De Beers has shown how to accomplish this for diamonds, while other deployments have addressed fields ranging from luxury goods to concert tickets. Blockchains can be vital tools to fight the counterfeiting of medical supplies, pharmaceuticals, food products, and consumer technologies that directly affect our communities and your constituents.

Upcoming Technological Improvements

While there have been highly-publicized exploits of smart contracts, the space has significantly matured since its early days, and new technologies stand poised to improve the safety of on-chain assets and applications.

The potential risks relating to smart contract-based systems have centered around flaws in implementation, such as poor coding and negligence in following best practices, rather than fundamental issues inherent to smart contracts or blockchain technology. Just as the internet software stacks were weak in the 1990s, smart contract programming tools are in their infancy.

The space has rapidly evolved to use code audits and other techniques to certify that smart contracts uphold safety standards, giving rise to a burgeoning field of software threat analysis, certification, and verification services. In addition, we are seeing the emergence of automated tools for program verification and model checking to help find bugs that human eyes cannot easily locate. These techniques operate even before programs are deployed to root out bugs before they can affect anyone.

Finally, there are new mechanisms, such as run-time integrity checks, smart contract escape hatches, and automated limits on money flows that operate in real-time to help contain the effects of any unintended errors that might pass through to production. Systems that have employed best practices, such as lending platforms and well-designed bridges, such as the ones Ava Labs has built, have seen billions of dollars pass through their contracts without compromise.

Given my background in academia and research, I am confident that the space will develop even stronger techniques for ensuring the correctness of smart contract software. One of the spillover effects of this activity will be better integrity and safety for all software, including software not related to blockchains.

Technological Competitiveness and Risk of Inaction

As we stand at the precipice of this new era, it is imperative that we nurture and support the development of this revolutionary technology. By doing so, we can unlock its full potential and ensure that the United States remains at the forefront of innovation, propelling the next generation of internet technologies and ushering in great economic growth.

Responsible actors in the blockchain space want sensible laws and regulations that incentivize growth and good behavior, punish bad actors, and elevate the users of blockchain networks. The community stands ready to provide guidance to policymakers to achieve those aims. However, without sensible frameworks and collaboration, there is a clear path to losing technological leadership to other countries.

The United States won the first wave of the internet revolution precisely because it enabled responsible freedom to innovate. The United States must follow the same path of enabling free but responsible growth of blockchain technology while carefully and intelligently classifying and regulating blockchain applications and tokens. Otherwise, there are two critical paths of failure for any regulatory framework.

First, the blockchain platforms themselves become regulated at the protocol layer. This would be the equivalent of regulating internet protocols, which would have doomed information technology and the vibrant internet we have today. Second, the tokens and smart contracts created with blockchains are lumped into homogenous and incompatible categories. This would be the equivalent of regulating a social media application like we regulate a consumer health care application. Instead, tokens and smart contracts must be analyzed case-by-case and regulated carefully based on their function and features.

As we move towards a more digitally-native world, aided by AI, virtual reality, and a work-from-home society, we will have to rely increasingly on digitally-native transfer and programmability of value. Blockchains are the clear technological answer to these needs and are definitively synergistic with the global economy. The addressable market for digitizing the world's assets and transferring value safely across the internet is greater than the sum of all the value of all existing assets. Failure to see the power of blockchain technology – whether due to a lack of understanding or misplaced fears of the technology – will have disastrous consequences. Failure to rapidly provide sensible regulatory frameworks will not only undermine economic growth but also make it easier for bad actors to conduct illicit activities.

Finally, it is essential to remember that just as there are good people committed to public service, there are also good people committed to building technologies to improve lives. By working together, we can lay the foundation for trustworthy, efficient, and self-enforcing systems that serve as the foundation for our modern economy.

Articles

shutterstock 2533565017
2026-02-19

Bridging the Atlantic, Part II: What’s New in UK Stablecoin Policy?

In August we compared the upcoming stablecoin regimes in the US and UK. Since that post, the UK has moved forward in shaping how these digital assets should be regulated as part of the financial system, especially if they become widely used for everyday payments. This post provides an update to describe the significant changes in direction in the latest UK proposals from the Bank of England and HM Treasury. The Bank of England has the mandate to create rules for ‘systemic’ stablecoins given their potential impact on financial stability, while HM Treasury (part of the UK government) is creating the detailed law that will give UK regulators the powers they need (and set the overall guidelines) to develop regulation. The big change in the UK is the focus on “systemic” stablecoins, and how they and their issuers are to be regulated.  The concept of systemic stablecoin regulation does not appear directly in US law under the GENIUS Act, although provisions of GENIUS require regulators to evaluate stablecoins and their issuers for potential threats to financial system stability. Below, we focus on the UK proposal. Why the UK is Focusing on Stablecoins Now Stablecoins (digital tokens designed to maintain a stable value against a fiat currency) remain the fastest-growing form of money in the digital economy. They are a key pillar of our token classification system, which you can read more about here. The UK government and regulators have been clear: if stablecoins are going to function like money in daily life and not just in crypto trading, then they must be subject to a regulatory framework that protects consumers and safeguards financial stability. The goal is to integrate stablecoins responsibly into the UK’s financial architecture, while also supporting the innovation they represent. This will go hand-in-hand with proposals for comprehensive crypto regulation that were originally introduced in 2023 through proposed changes to the Financial Services and Markets Act. The UK government (HM Treasury) ‘laid’ secondary legislation in December 2025 that would put much of the 2023 updates into effect, including defining stablecoins as regulated financial instruments and regulating their issuance.   The Core Focus: “Systemic” Stablecoins In coordination with HM Treasury and the FCA, the latest Bank of England consultation paper was published in November 2025. Its focus is on pound sterling-denominated “systemic” stablecoins. These are stablecoins that become so widely used in everyday retail payments that, if something went wrong, they might affect not only consumers and businesses at scale, but the wider financial system as well. What makes a stablecoin systemic? While the full details will be clarified in the final regulation, it’s essentially based on how many people and businesses use it (and for what kinds of payments) and the extent of its interconnections with the financial system. HM Treasury has the power to designate stablecoins as systemic and once it has done so, the stablecoin would fall under a joint regulatory regime, with the Bank of England looking after financial stability and prudential requirements, and the Financial Conduct Authority (FCA) overseeing consumer protection and conduct under its own upcoming stablecoin regime.  Non-systemic stablecoins will be regulated solely by the FCA under existing and upcoming cryptoasset rules. A non-systemic stablecoin, for example, is one used for a day-to-day payment or as an on-/off-ramp to the crypto ecosystem that does not have a critical mass of users in the UK.  Note that even with this consultation paper, much of the regulation of stablecoins, their issuers and their usage remains subject to additional rulemaking.  Those looking for certainty need to remain patient, notwithstanding that the government has been considering these issues since at least 2023. New Backing Asset Rules: A Balancing Act One of the biggest changes in the new proposals is how issuers of stablecoins designated systemic would be required to back the coins they issue; that is, what assets they must hold to ensure that coins remain redeemable at a fixed value in pounds sterling. Under the draft proposals: At least 40% of backing assets must be held as unremunerated (non-interest-bearing) deposits at the Bank of England - effectively very liquid central bank money. Up to 60% can be held in short-term UK government debt (gilts), which can earn a return and help make issuer business models viable. This is a shift from earlier proposals that would have required almost all backing assets to be held at the central bank with no interest.  The Bank of England is also considering offering liquidity lines to issuers, and proposes allowing them to repo out backing assets as a means of accessing additional liquidity. The idea is to strike the right balance: making sure issuers can always meet redemption requests even in a crisis, while also not squeezing them out of business by forcing ultra-conservative backing rules.These requirements will make systemic stablecoin issuers look a lot like so-called narrow banks and the stablecoin itself a lot like a central bank digital currency. “Step-Up” and Transitional Rules There are also transitional measures to support issuers that are systemic from the start. Such firms could temporarily hold up to 95% of their backing assets in short-term government debt during their early growth phase, before scaling into the full 60/40 structure. This “step-up” regime is designed to give new market entrants space to grow while still ensuring they eventually meet stringent safeguards. It is designed to limit worries of a ‘cliff-edge’ from transitioning from the FCA to the BoE’s systemic regime. Consumer Safeguards and Limits Controversially, to reduce the risk that stablecoins could pull deposits out of the banking system too quickly (which could affect credit and financial stability) the proposals include temporary holding limits per systemic stablecoin: £20,000 per individual £10 million per business (with exemptions possible for some business uses) These limits are framed as transitional, with regulators monitoring whether they can be adjusted as the market matures. It is not clear how these limits would be enforced from a practical perspective. Other Noteworthy Requirements in the Consultation A few other important parts of the consultation include: Direct payment system access: Systemic stablecoins should be able to settle with traditional money systems, making redemptions and transfers smoother. Safeguarding backing assets: Reserves must be ring-fenced and held in the UK, with clear legal claims for coin-holders. Subsidiary requirements: Foreign stablecoin issuers targeting the UK market would need UK-based and regulated subsidiaries. Birdseye View  While the UK continues to develop and adapt its framework for stablecoins, it seems to be still mired in basics and with overlap between the FCA and BoE’s roles. The BoE’s updated stablecoin policy proposals reflect a pragmatic approach: significant safeguards to protect users and financial stability, flexibility to support issuer viability, and a clear path toward integrating stablecoins into the payments system, which will allow them to be part of commerce in the UK. But some basic concepts still need to be clarified. And the UK is running out of time. Whether this proposed framework will help the UK compete with the US’s crypto-friendly stance and the EU’s MiCA regime remains a live debate.  It’s important to note that these are draft proposals open for comment, and we expect there will be robust discussion between the Bank of England and industry on the details. They are not set in stone and may be subject to change. We will continue to watch with interest for new developments and await the final rules.

The Owl
By and The Owl
advisory-council-main
2026-02-03

Announcing Avalanche Policy Coalition Initial Advisory Council & 2026 Policy Priorities

We are pleased to announce the initial members of our newly-formed Advisory Council. We warmly welcome Bart Smith and Laine Litman, CEO and COO, respectively, of Avalanche Treasury Co., Jolie Kahn, CEO of Avax One Technology, and Lord Chris Holmes, a director for the Avalanche Foundation and member of the UK House of Lords.  Each brings rich and diverse experience together with a commitment to the Avalanche ecosystem that makes them uniquely qualified for the role.  Lee Schneider, the Ava Labs General Counsel, will chair the Advisory Council.  APC will serve as the policy hub for the Avalanche community, with the Advisory Council charting the course on the themes and priorities for our educational and advocacy efforts.  2026 promises to be a busy year on the policy front with the US and major other jurisdictions (including Australia, Korea, and the UK) moving ahead with comprehensive crypto asset regulation or making significant adjustments to existing regulation.  APC seeks to be the premier resource on foundational blockchain policy and regulatory issues.  Our guiding principles for policymakers and regulators on how to approach blockchain and crypto set the stage for thoughtful, targeted laws and rules that are easy to understand and apply.  The Advisory Council’s goals include providing expertise and insight on key issues and helping to expand our reach to a broader audience. The Advisory Council has set three policy priorities for 2026.  These are the key themes that will guide our advocacy, thought leadership, and other activities during the year.  They are designed to cover matters that impact the Avalanche community directly, and blockchain/crypto policy and regulation in general.  They are also geared towards what we believe are foundational points to undergird all thinking on these topics. First, APC will focus on token classification, refining it for an era of tokenized real world assets (RWA).  The nature of the asset matters for utilization, valuation and legal/regulatory classification, among other things.  If policy makers and regulators get token classification right, it will result in rules that are easy to understand, apply and follow.  Get it wrong, and it will sow confusion, over-regulation, and inhibit growth.  We have seen token classification in action as countries have adopted rules for stablecoins as distinct from other tokens.  Similarly, tokenized stocks and bonds are different from tokenized concert tickets and should not be regulated the same, nor should protocol (network) tokens.   Second, we will focus on the difference between infrastructure and intermediary functions to buttress the dividing line between which activities should be regulated and which should not.  The nature of the activity matters for allocating responsibility and liability from a commercial, financial, legal and regulatory standpoint.  There are efforts in many jurisdictions to push regulatory requirements to the infrastructure layer like never before.  We will keep fighting against these proposals, because it is the specific businesses that should be regulated, not the infrastructure layer providing common rails for all.  Validator nodes, software developers, and hardware providers are prime examples of infrastructure.  On the other hand, banks, brokerages and exchanges are properly regulated as intermediaries. Finally, we will advocate for an open, uncensored internet to keep blockchains functioning.  Access to infrastructure matters as we navigate an increasingly online world for commerce, finance, communications, education and recreation.  We should not tolerate direct or indirect government restrictions on the internet, such as those imposed by the regime in Iran during this turbulent time.  At best it results in censorship of core freedoms; at worst it results in the death of innocents.  Because blockchains depend on the internet, everyone in the community should demand open, uncensored internet access. Here at APC, we have a number of exciting initiatives in the works.  Follow us on X, LinkedIn and Instagram, subscribe for our biweekly update, listen to our podcast, and find us at events around the world.  There is a lot to do in 2026...

The Owl
By and The Owl
AVALANCHE low-06156
2026-01-26

Stablecoins, Public Infrastructure, and the Path Forward

What We Learned From Our 2025 Stablecoins in Focus Series TL;DR  • Stablecoins aren’t just “digital money.” They’re becoming part of the infrastructure that moves value. If you’re curious about what they are, click here for a basic definition.  • Across Singapore, Washington DC, the UK, and Argentina, one theme kept coming up: blockchains are public rails for moving value. • Policy works best when it distinguishes “building the rails” (infrastructure) from “running a financial business” (intermediation). • The big question: how do we regulate open rails thoughtfully, without freezing progress or compromising trust? In 2025, stablecoins stopped being a side conversation and became a main event for payments, financial infrastructure, and cross-border coordination. Over the course of the year, the Avalanche Policy Coalition (previously known as Owl Explains) convened four invite-only events across Singapore, Washington DC, London, and Buenos Aires, alongside participation in major payments forums including the Chicago Fed Payments Symposium and Federal Reserve payments innovation event. Each stop brought new perspectives. But together, they told one story: stablecoins are not just about “digital money.” They’re about infrastructure, trust, and how value moves in a global, digital economy. Think of stablecoins like shipping containers for money. The container is standardized. What matters is the port, the rules, and the inspection system that keeps trade safe and reliable. The Common Thread: Blockchains As Public Infrastructure Across every conversation, one theme kept resurfacing. Blockchains function as public infrastructure. Unlike private payment systems, blockchains are open and publicly available. Anyone can build on them and utilize them to transact. If private payment networks are like private roads, blockchains are more like public highways. The rules still matter, but the road is open to many kinds of vehicles.  This changes the economics of payments and financial services by lowering costs, reducing barriers to entry, and enabling new business models. Stablecoins sit on top of this infrastructure and make it usable for real world commerce. In plain English: stablecoins take “public rails”for people to use to pay, save, and move value. They also give businesses new opportunities and flexibility with their customers. This idea resonated strongly at the Chicago Fed Payments Symposium, which marked its 25th anniversary. The event brought together Federal Reserve governors, presidents, staff, and senior leaders from across financial services. A full day focused on traditional payments was followed by a half day dedicated entirely to blockchain and digital assets. That shift alone signaled how far the conversation has moved… and it’s a big deal. At the Symposium, the Avalanche Policy Coalition emphasized a core principle that also guided our Stablecoins in Focus event series. Infrastructure is not the same thing as intermediation. Providing open rails is fundamentally different from acting as a financial middleman. That distinction matters for regulation, innovation, and market structure. A helpful analogy: the internet is infrastructure; a bank is an intermediary. The nature of the activity matters and policy makers should not confuse these buckets and impose the same requirements on each. We discussed this concept in detail in comment letters to the SEC Crypto Task Force in April and May, the Hong Kong regulators in August, and the Australian Treasury Department in November. Three months, four stops, common threads • Singapore showed how clear categories create confidence. • Washington DC focused on trust, guardrails, and cross-border realities. • London was about moving from “debate” to “delivery.” • Buenos Aires showed stablecoins as everyday infrastructure (no longer a faraway theory). Singapore: Clarity Through Structure and Labels Our first Stablecoins in Focus session took place in Singapore, co-hosted with King and Wood Mallesons during Token2049 week. Singapore offered a clear example of how regulatory structure can support innovation. The Monetary Authority of Singapore distinguishes sharply between stablecoin issuance and intermediation. Intermediation activities such as custody, exchange, and transfer fall under existing Digital Payment Token rules. Issuance follows defined frameworks, including an upcoming regime with disclosure requirements, reserve standards, redemption obligations, and capital thresholds. This separation creates clarity without overcomplicating the system. It gives issuers and intermediaries clear guardrails while allowing experimentation within defined boundaries. The Singapore discussion showed how confidence in policy design can encourage responsible growth and innovation. You can picture this as fewer mystery boxes and more labeled drawers. Washington DC: Payments, Infrastructure, and Trust In Washington DC, co-hosted with the Global Blockchain Business Council, the conversation shifted toward payments and market structure. Participants focused on the reality that domestic payment systems in many countries already move quickly. The value of stablecoins is not always speed at the retail level. Instead, it lies in transparency, programmability, and the ability to operate on shared public rails. Translation: stablecoins aren’t just “Venmo but on-chain.” They can be more like shared payment infrastructure that many services plug into with less friction than private systems. Cross-border payments emerged as a key challenge that stablecoins elegantly solve. Traditional systems struggle with interoperability across banks, currencies, and jurisdictions. Stablecoins face a different limitation today, namely the dominance of US dollar denominated instruments. Still, the infrastructure case was clear and an ever-growing list of other currencies have stablecoins. Public blockchains create new options for moving value globally. Think USB-C, not custom chargers: shared standards reduce friction across borders. Regulation was seen as essential for trust. With new legislative efforts such as the GENIUS Act, the United States is beginning to both show leadership and align with other jurisdictions. The mood in DC was pragmatic. Stablecoins are no longer hypothetical. They are becoming part of the financial plumbing. Once something becomes “plumbing,” people stop asking whether it’s trendy and instead start asking whether it’s safe, resilient, and well-governed. London: From Debate to Delivery London brought urgency. Co-hosted with Innovate Finance, the UK Stablecoins in Focus event focused less on defining stablecoins and more on what it would take to make them work at scale. There was broad agreement that the UK risks losing its fintech edge if stablecoin policy remains stalled between the government, the Bank of England, and the FCA. Several themes stood out. Programmable money should be understood as a platform, not a product. Innovation happens when infrastructure exists first and use cases follow. Privacy and transparency should not be treated as opposites. Institutions need confidentiality. Regulators need visibility. Market driven solutions are already emerging to support both. Basically, you can build systems where regulators get the oversight they need without broadcasting everyone’s business to the whole world. The discussion also highlighted the importance of distinguishing between retail and wholesale use cases. A single framework risks freezing innovation. Iteration and experimentation matter, especially for institutional settlement and tokenized markets. In London, the question was no longer whether stablecoins matter, but whether the UK would move quickly enough to not be left behind, even if it does not lead. It felt less like “Should we?” and more like “If not now, when?” Argentina: Stablecoins as Real World Infrastructure Our final Stablecoins in Focus event took place in Buenos Aires, co-hosted with FinLaw and Draper House. The conversation there grounded everything we had discussed elsewhere (and featured a delicious Argentinian asado with chimichurri… if you know, you know). In Argentina and across Latin America, stablecoins are not abstract policy tools. They are used for saving, payments, and cross-border transfers in everyday life. What began as a way to protect savings has evolved into real financial infrastructure. The Argentina discussion reinforced that local context matters. Payments systems, currency dynamics, and access needs differ by region. Public blockchain infrastructure allows these differences to coexist while remaining interoperable at a global level. Latin America illustrated what happens when necessity meets open technology and where openness drives adoption. Stablecoins move from theory to practice. So if our Singapore event was policy design, our Buenos Aires event was more like policy meets real life. What These Conversations Add Up To From Singapore to DC, London to Buenos Aires, one insight became clear. Stablecoins are a visible entry point into a much larger shift. Blockchains provide public infrastructure that challenges existing payment and banking rails by offering an alternative that is open, lower cost, and globally accessible. This does not mean private systems disappear. It means new market discipline is introduced. New forms of freedom and competition emerge.  Infrastructure is not the same as intermediation. Regulation should reflect that distinction. When it does, good actors enter the market. When it does not, risk increases. So, how are we regulating the rails, the vehicles, or the drivers? If we mix those up, we get confusing rules and worse outcomes. These events left us optimistic. Even though the answers were not always simple, the conversation is finally catching up to the technology. Payments and stablecoins will continue to command attention, and rightly so. What matters now is building policy frameworks that recognize public infrastructure as a new and legitimate way to move value. And importantly: doing it in a way that preserves trust, because payments are trust systems first. At the Avalanche Policy Coalition, we will keep convening, listening, and translating these global perspectives into clear policy conversations. The future is being built on open rails. The question is how thoughtfully we choose to govern them.  Want to stay updated on our future events? Subscribe to our newsletter and follow the Avalanche Policy Coalition on X, Linkedin, and Instagram. 

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