Around the Block With Jefferson Nunn – Interview With Sumedha Deshmukh of Crypto Council for Innovation

Jefferson Nunn  0:46 

Welcome to another edition ever Around the Block with Jefferson none. And I’m here today with Sumedha. How’re you doing?

Sumedha Deshmukh  0:54 

Good, how are you?

Jefferson Nunn  0:56 

Awesome. Awesome. So, tell me a little bit more about what you’re working on now.

Sumedha Deshmukh  1:03 

Yeah, so I wear a couple of different hats. I am a policy advisor to the Crypto Council for Innovation, which is a global alliance of crypto focused companies that are looking to advance innovation friendly policy and regulation around the world. So, our members include some of the biggest names in crypto like Coinbase, Gemini and Horowitz paradigm, among others. And we’re really looking at inclusive and evidence-based policymaking. Obviously, the space is moving so fast, there’s so much going on. So, we really want to help policymakers and regulators get their heads around this, this quickly evolving space. So, I do that part time. And then in the rest of my time, I am working on a PhD, which is looking at related issues in financial regulation. So, a couple of different angles on the conversation.

Jefferson Nunn  2:10 

That’s fantastic. And, you know, for the crypto counsel there, I think, you know, we could certainly use a lot of help and guiding to the innovation through the turbulent waters of regulation. There’s a lot of governments that really don’t know what to do with crypto or how to handle it. To wit, it’s almost like the one senator saying it’s a series of tubes for the internet. So how does your crypto counsel help new contract, you know, new companies, new startups, get their innovations to market? Can you tell me more about that?

Sumedha Deshmukh  2:57 

Yeah. So, I mean, I’ve worked in this industry for a number of years, specifically focusing on policymaking and regulation. So, prior to the crypto council for innovation, I was at the World Economic Forum, where I worked on their blockchain and digital assets team. So, I’ve gotten a really good look over a number of years at the number of competing priorities that policymakers and regulators have. So, in a given day, they’re looking at so many different types of issues, so many different spaces. And so, they really need to be equipped with easy-to-understand information about what they’re looking at, and evidence to support this vast number of policies and policy decisions that they’re making on a given day. So really, a lot of it is educational efforts with these teams, and really trying to get them up to speed on what’s happening in crypto, what’s different about crypto, and really helping them understand everything from the technical underpinning to the governance decisions, to the economics of crypto, and really helping kind of understand what the promises here and how these teams are building. And so really, it’s it takes a number of different forms. It can be a conversation with a policymaker or regulator and their team. It can be briefings in the form of one pagers or memos. It can be built out reports on a given issue that really compiled the evidence and policy recommendations from the industry. It really kind of depends on what the policy issue area is, kind of timelines that they’re working under. And what types of decision making or education that they need in a given moment. So, as you can imagine, there’s a combination of short-term immediate needs and ongoing education. So, we try to create a variety of tools that can be used for those purposes.

Jefferson Nunn  5:20 

That’s fantastic. You know, because like I said, I, I’ve seen a lot of different, you know, just random push backs from senators and so forth, that, you know, they really, and Congress person, they really don’t understand how this crypto thing worked. And then on the other hand, you’ve got El Salvador, you know, trying to set themselves up as a, you know, Bitcoin capital to the world. So, I really hope that, you know, there can be more guidance given to both the people trying to do the innovations, coming up with new products, new services, and so forth, that are more secure and more reliable. And along those lines, you know, there’s companies like Celsius, that has recently gone bankrupt, or ether that has also gone bankrupt, because, you know, they were just going gangbusters and they ended up doing a Ponzi scheme, without intentionally trying to do so perhaps. So, do you think the answer to that is more guidance, more regulations, more standards? Or what do you think? How can we get from here to the next level?

Sumedha Deshmukh  6:42 

Yeah, I think it’s going to be a combination of things. And, you know, I think the thing that we say to policymakers all the time is that crypto isn’t a monolith, right? So, when we’re talking about the space, we’re talking about, so many different use cases, technical decisions, etc. And I think what we’re going to see, and what we want is a phased approach to policymaking and regulation. So, as you mentioned, you know, there, there are places where we would want frameworks in place around consumer protection. And, you know, there are a lot of legitimate actors in the states who have been calling for clear guidance for a number of years, because they want to do right by their customers, they want to have a secure business model that isn’t threatened by potential future regulation or litigation. So, I think there are areas where we have seen a call for guidance and regulation, and really a request from the industry, that there is proactive and innovation friendly guidance, rather than regulation by enforcement, which is what we’ve seen in other cases. That being said, I mean, there are some areas in crypto that are new, and we don’t have a lot of information about we don’t want to stifle innovation in those areas. So, I think there are also areas where, you know, the industry is saying, hey, let’s, let’s wait a minute, let’s do some research. And let’s have some studies around some of this stuff. And then we can decide the best course of action moving forward, because it still represents a fundamentally new opportunity. So, we don’t want to just impose old regulatory framework on this new space or miss out on the potential for new innovation or new approaches. So, you know, I think we’ve seen regulators who are, are open to this kind of line of thinking. So, one example of this is the EU just came to a political agreement on their big crypto asset framework. And we see that they’ve kind of taken action on and kind of specified supervisory authorities and, and different aspects around things like stable coins and crypto assets that they’ve said, you know, there are areas that we need to do additional research. So, they’ve flagged that DeFi, for example, they’ll do additional research and publish a report in 2023. NFTs so published a report and about 18 months after the regulation enters into force. So, we’re seeing this understanding that yes, there’s a desire for regulation, but there’s also a desire to understand the space, understand the innovation pathways, and create a phased approach that really support and balances both innovation and aspects like consumer protection and stability.

Jefferson Nunn  9:56 

That’s great. That’s great. That’s good to hear. I really having seen that, you know, this industry, you know, has been growing, but it also needs a lot of help to make sure that, you know, consumers aren’t unduly harmed by, you know, what amounts to a beta test. Right. So. So that’s always good to hear that, you know, somebody has their back, so to speak. So, along the way, though, how did you get your start in this industry? Because it’s really an arcane industry? Not that many people know about it. How did you come about getting into crypto?

Sumedha Deshmukh  10:42 

Yeah, I have kind of an unconventional story in that I was working in international development sector. So, my backgrounds in Economics and Policy, and I was working on global development projects. And around 2017 2018. As with every industry, I was hearing a lot of blockchain is going to solve this. And I am a skeptic by nature. So, I, I did not believe that blockchain was going to solve an entire industry problem. But I was kind of interested in seeing what the different applications were that people were talking about creating kind of balanced resources for the international development sector, on where this technology showed promise, and were maybe it was a bit overhyped. But at the time, I was working at a media company, we were working on content for development professionals. And I did this series on a practitioners guide to blockchain. And so, at that time, I kind of became very intellectually interested in blockchain technology and crypto, and kind of followed along for a few months as just a side hobby and was interested in it. And then it became a bit of an obsession, to the point that I was like, you know what, I think I just want to work on this full time. And so, someone I have worked with on that content theory, Sheila Warren, was, at the time, the head of the blockchain and digital assets team at the World Economic Forum. So, I sent her an email out of the blue and just said, hey, I’m really interested in this space. Are you hiring for your team, and it just so happened that at the time, she was hiring for someone, my kind of level of experience we got on the phone, went through an interview process, and I moved to San Francisco on three weeks’ notice from Washington, DC, to start working on this crazy thing called a blockchain and digital assets. And then at the World Economic Forum, you know, I was really fortunate to work on a number of different projects and issue areas. So, I worked on supply chains, I worked on CBDCs, I work on defy consumer protection, technical standards, so I got a pretty wide view of the space. And that was a really interesting time, obviously, to be working on it. I feel like those were the early days before policymakers and regulators were really paying attention. So, we were in some of the earliest conversations around some of this stuff. And now as you are probably familiar, it’s a big focus area for these folks. So, so very lucky that I got to be involved in kind of early-stage conversations, because they were shaping up and people were kind of determining their priority areas.

Jefferson Nunn  13:46 

Yeah, that’s great. It sounds like you had a terrific experience. And yeah, I still think we’re in the early days. You know, not everybody is using, you know, Blockchain yet. And I still think it’s like, the early days of the Internet, where we had IP addresses and complicated thing to do to connect into a web server. You know, so what do you think it’s gonna be next further for the future of crypto and Bitcoin and all their policies and all the things that we have going on?

Sumedha Deshmukh  14:22 

Yeah, I mean, that’s the big question. And I think if I knew with complete clarity, I think I’d be able to make a lot of money. So, I wish I, I wish I had a definitive answer to that. But I’ll say on the policy and regulation side, I think that there’s going to be a lot more activity and we’re already seeing this kind of uptick, not just in the US, but around the world. So, something that we’ve been saying is that system has made it clear that the rest of the world isn’t waiting around for the new rest. So, I mentioned the European Framework, we’re seeing a lot of activity elsewhere. You know, from Singapore from Australia, countries really looking to pick from the UK has announced its intention to be a global crypto asset has to be really seen that countries are looking to make moves in policy and regulation for crypto and attract a lot of the innovation that’s happening in this space, while again, balancing the needs of their customers and their constituents. So, I think over the next year, we’re going to see a big uptick in activity from the kind of initial roll that we’ve seen starting up this summer. So, we saw in the past year, a number of bills introduced in the US that are specifically focused on digital assets. You saw Biden’s executive order in March, that has informed a lot of regulatory activity and reports out of the big financial regulators. So, I think we’re only going to see increased activity. And hopefully, with that increased engagement with the industry, on what this all means and how it’s all unfolding. I mean, as somebody who works in the industry, I still feel like I’m behind and learning things every day, it’s a lot to stay on top of. So, thanks for the policy and regulatory teams that have big portfolios, it’s critical that they’re engaging with the people working on it on a day-to-day basis. So, they really get a sense of how it all works from a technical standpoint, and how it’s all evolving, because it really does change from day to day.

Sumedha Deshmukh  17:24 

Yeah, that’s a great question. Well, first, I would just echo exactly what you said that there is a real need for diverse talents and diverse skill sets in the space. And I think today, you know, it was largely made up of technologists, which is great. And I think that’s how we got where we were. But I think now we’re entering an era where it’s really important that we’re storytelling, and we’re communicating, and we’re organizing in ways that really show the development and maturity of the industry over the years. So even having worked in this space for now, a little less than five years, I’ve seen such change and such growth. And I think that’s really enabled by people who don’t have a simply technical background, coming into the space and kind of building it out further. I think those don’t have to be very complimentary. And there’s, there’s a need for all sorts of people to enter the space. And what I would say is, you know, there’s so much going on, find what interests you, and use that as an entry point. You know, I think people feel the need to get on board and be technical experts and learn about the financial system and, you know, really boil the ocean in terms of their crypto knowledge. But I think I would say start with what interests you there’s a number of things going on in this space, there’s, you know, a whole discussion around arts creativity in the creative economy with NFT’s with sci fi, if you’re interested in decentralized finance, or financial activity, and how we can rethink some of those systems with dowels and decentralized autonomous organizations. You know, we’re really, really thinking about how we organize groups of people and create organs, new organizational structures. Everywhere along around the industry, there’s a need for new ways of communicating and storytelling, as I said, so I think it’s, it’s really, to not think about it as this intimidating space and really think about what am I interested in and find the kind of niche within her so that is aligned with those interests. And the other thing I’ll say is, people in the industry are generally quite friendly and willing to get you up to speed and talk to you about things. Because a lot of us are just nerds who like this stuff. Um, so if you’re, if you’re nervous or want to learn more, I say, don’t hesitate to reach out to people on Twitter reach out to people via email, a lot of times, people are very friendly and willing to discuss these things. And if you’re intimidated, you can also you know, it’s the great thing about it being a decentralized community is you can also just follow along until you do feel comfortable to speak up or ask questions. So, a lot of what I did in the early days was just joined the discord of different projects. And lurk is a what we call that just lurking in the discord, seeing, you know, how are these activities being shaped? What are the kinds of conversations and discussions that you’re having, you can get a good sense of kind of the trajectory of some of these projects and some of the big questions that are being asked. And I think I learned a lot from just observing, and then was able to slowly sneak my way onto people’s calendars, ask questions and get a little more embedded into the project side of things. But it’s generally quite open. And I think there’s a lot of interesting stuff going on into.

Jefferson Nunn  21:16 

Yeah, that’s fascinating. And that’s, I think, a great advice, because a lot of people think that this is a very standoffish industry. And I would say that, um, no, this is a very welcoming community, grassroots driven, you know, from the bottom up, if you will grow this crypto industry, which is unlike any other kind of innovation that I think we’ve seen in the last 100 years, so it’s fantastic. Alright, right. Well, it was really great to meet you today. Do you have any final thoughts for our listeners?

Sumedha Deshmukh  21:59 

No, I would echo what you said. I think there are a lot of friendly people in the industry. And I encourage anyone who’s curious and interested to start going down the rabbit hole. And honestly, the best way, in my opinion, to learn more is to play with the tools yourself. whatever interests you play around, I do want to put a lot of money into it. But I feel like I got the most insight and interest and excitement by just playing around with some of the wallets and some of the services. I think it really gives you a perspective on what’s different and exciting about this space. So, I would encourage you to just get your feet wet and dive in.

Jefferson Nunn  22:44 

Awesome. And if our listeners want to connect with you or the Crypto Council, how can they do so?

Sumedha Deshmukh  22:51 

Yeah, I am on Twitter at SUMDESH Sumdesh. So that’s generally a lot of our crypto live, so you can reach out to me on Twitter at any time.

Jefferson Nunn  23:08 

Awesome deal. Well, thank you so much for joining us on the show is really, really great to have you.

Sumedha Deshmukh  23:17 

So nice to meet you. Thanks for having me.