Corporate legal leaders warn U.S. regulation is ceding blockchain innovation to Europe

Corporate legal leaders from Robinhood, Coherent Corp., Peloton Interactive, and Edward Jones said U.S. regulatory hurdles risk slowing blockchain and digital asset innovation compared with Europe, particularly when it comes to applications beyond cryptocurrencies.

The discussion took place Monday during a panel of the Securities Regulation Institute, an annual event on Coronado Island that draws a Who's Who of the attorneys and regulators in the United States.

The panel focused primarily on blockchain and digital asset strategies and was moderated by Keir Gumbs, Institute vice chair, principal, and chief legal officer at Edward Jones. Panelists included Lucas Moskowitz, senior vice president, general counsel, and corporate secretary at Robinhood Markets; Robert Beard, chief legal and global affairs officer at Coherent Corp.; and Tammy Albarrán, chief legal officer at Peloton Interactive.

According to Moskowitz, Robinhood's growing global crypto business has highlighted an unexpected reality: innovation is currently easier overseas than in the United States.

"It's easier to innovate in Europe than it is in the U.S., and that's a statement I never thought I would make," Moskowitz said. "That's not a good thing. We need to be the leader in innovation."

Robinhood, he said, believes strongly in blockchain's potential to make markets more efficient, more transparent, and continuously tradeable across many asset classes and geographies. "A major focus for the company is tokenization--fractionalizing assets and enabling global, 24/7 trading," he said.

But regulatory barriers in the United States remain a major obstacle.

"Right now, it's a lot more difficult to tokenize in the U.S. than it is in Europe," Moskowitz said. "We are already tokenizing U.S. publicly traded stocks in Europe. We're not doing that here, and that's just a function of the regulatory environment hurdles we're facing in the U.S."

He said Robinhood is working to innovate responsibly and avoid running afoul of regulators but warned that broader adoption of blockchain technology is inevitable. "It's just a matter of how quickly and how well we do it at the start," he said.

Picking up on Moskowitz's comments, Gumbs said that when digital assets are discussed, audiences often focus first on Bitcoin and Ethereum, rather than on blockchain and tokenization.

"When you mention digital assets, most people think about Bitcoin and Ethereum first, and blockchain and tokenization second," Gumbs said. "But the technology isn't a specific currency. It's the blockchain itself and what it can do for securities markets."

Gumbs added that cryptocurrencies can become "the tail wagging the dog," compared with what he described as the larger opportunity blockchain technology presents for securities markets.

Moskowitz said he agreed, noting that regulatory hostility over the past several years--particularly under former SEC Chair Gary Gensler--made it difficult for retail brokers and crypto firms to engage constructively with regulators.

"There was basically an effort to tamp down the industry, if not stop it in its tracks," Moskowitz said. "That's not the right way to do it."

While policymakers are now attempting to provide greater clarity, Moskowitz said discussions about how blockchain could change financial market structure naturally draw resistance.

Moskowitz also highlighted the growing role of blockchain-enabled prediction markets, which he said could expand well beyond sports betting into areas such as economics, climate, insurance, and other sectors.

"When you're doing prediction markets, you're putting your money behind it," he said.

He contrasted prediction markets with traditional polling, saying that financial stakes produce higher-quality information. Over time, he said, traditional equities and derivative markets are likely to increasingly come together with crypto technology.

Turning to payments infrastructure, Gumbs asked Robert Beard to discuss blockchain's role beyond trading and speculation.

Beard, who joined Coherent in 2024 after serving as chief legal and global affairs officer at Mastercard, said one key lesson from his career is that blockchain innovation must occur in partnership with government.

"It's not realistic to think regulators are going to allow this space to develop without their presence," Beard said. "If blockchain or crypto operates outside government purview, governments will shut it down."

He pointed to central bank digital currencies as an example of that dynamic.

"We had a lot of success working with partners primarily outside of the U.S.," Beard said. "Central bank digital currencies, for example--every government is thinking about a CBDC."

The challenge, Beard said, is integrating digital currencies into existing payment systems rather than allowing them to operate independently. Governments will insist on traceability and oversight, and efforts to avoid that reality are likely to lead to stricter regulation.

Beard also described an evolving payments ecosystem in which digital wallets will hold many forms of value--from traditional currencies to tokenized assets--all capable of seamless use.

"Historically your wallet had cash, then plastic," he said. "Now our wallet is going to include all types of assets that can be used to transact."

Achieving interoperability among those assets, he added, remains a major unresolved business opportunity.

"The possibilities here are amazing and endless," Beard said.

The conference, hosted by Northwestern University Pritzker School of Law, runs through Wednesday.