Financial Regulators’ Open‐​Source Crackdown Sets Bad Precedent for AI, DeFi, and Innovation

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Financial Regulators’ Open‐​Source Crackdown Sets Bad Precedent for AI, DeFi, and Innovation

1 Sep 2023

Washington policymakers are consumed with AI concern. Fears run the gamut from existential threats to humanity to chatbots fibbing. In recent weeks, AI entrepreneurs and policy thinkers have helped to frame one of AI’s principal risks as the possible threat posed to political stability and continuity. In a thoughtful multipart series on “AI and Leviathan,” for example, Samuel Hammond (senior economist at the Foundation for American Innovation) argues that “[d]emocratized AI is a much greater regime change threat than the internet” and “[t]he moment governments realize that AI is a threat to their sovereignty, they will be tempted to clamp down in a totalitarian fashion.”It’s wise to expect that the prospect of dizzying changes threatening the established order will incline states toward aggressive counterreactions. Indeed, we already see early signs of this in financial regulators’ response to autonomous and self‐​executing financial tools (e.g., smart contracts on cryptocurrency blockchains). Notably, smart contracts and certain AI models share a common feature that, when paired with the ability to operate with limited human intervention, can be particularly disruptive to existing regulatory methods: open‐​source code that is freely reproducible.
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Authors

Jack Solowey

Published in
United States of America

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