I don't want to sound like a cranky old man on a porch, but flabbidy-flew, the world is changing fast. As the chart in this column shows, the pace of technological adoption is accelerating rapidly, and we now have access to inventions that previous generations could only dream about.
These advances come with enormous power to change how humans enjoy their lives. Can anyone imagine life without a smartphone? I know my teenage children can't. And yet the technology that they deem as indispensable is not even a teenager itself, with the first iPhone launched in 2007.
Society's reliance on these new technologies come with risks—some known and some unknown—and government authorities are openly struggling with how to protect the public while promoting responsible innovation. Case in point: the public outcry over Facebook's plan to create its new digital currency Libra.
Digital assets are a good example of this struggle. Here is an exciting new technology that has the potential to transform how we move money around the world, but from a governmental perspective it raises a host of concerns. Politicians worry about the lack of investor protections. Central banks worry about the impact on the money supply. And market regulators worry about market manipulation and cyber-security.
Traditionally, the regulations that govern our capital and risk markets are driven by whether a product is a security, future or cash commodity. Unfortunately, digital assets don't fall neatly into any of these categories and regulators are left squeezing a square digital peg into a round regulatory hole.
Without some type of modernized framework to guide this new marketplace, the responsible innovators—the ones who want to follow the rules—are left frustrated by the uncertainty and will likely remain on the sidelines. And those who enjoy the grayness of the regulatory system may not be the actors we want in this space.
We should agree that our approach to overseeing this market will need to change. The regulatory framework must be tailored to these products and calibrated to the level of risk. Regulators must also change their mindset and consider not only the risks but also the opportunities presented by this technology. Can you imagine the benefits of a trade record that is transparent, indelible, and not subject to manipulation? Regulators should take notice.
Fortunately, some regulators already have. The U.K.'s Financial Conduct Authority launched "Project Innovate" five years ago, which has helped multitudes of startups come to market through its sandbox program. The Monetary Authority of Singapore has lent its support for digital banks and is studying distributed ledger technology for clearing and settlement. And the U.S. Commodity Futures Trading Commission opened the doors of LabCFTC to engage with innovators and accelerate the agency's understanding of new technologies. These partnership programs give government a front-row seat on determining how to regulate these products and importantly, how to take advantage of them as well.
How is FIA putting its fintech money where its mouth is? FIA has lent its support to a change in the U.S. regulatory system to allow regulators to use private technology for improving oversight without running afoul of gift laws. FIA is constantly beating the drum to reduce the uncertainty and complexity of regulation so that new entrants can come to market more quickly and foster a culture of competition. And lastly, we are proud to showcase the next generation of fintech startups at our Innovators Pavilion at Expo and other conferences throughout the year. Since we launched this showcase four years ago, more than 70 startups have qualified to demonstrate their technological innovations to the FIA community.
FIA has always served as a platform for thought leadership in our industry. As we look ahead to the decades to come, I fully expect to see extraordinary advances in the technologies that underpin everything we do. And I assure you that FIA will be committed to helping innovators and policymakers work together on a modern framework for regulating these technologies.