Policy Proposal Idea

Primary Proposal: A "Privacy-Preserving Public Digital Infrastructure & Statutory Right to Self-Custody Act"

• The Core Problem: Public policymakers currently oscillate between two flawed extremes: either leaving retail users exposed to unregulated, opaque offshore exchanges (like FTX), or imposing dragnet financial surveillance and pushing Central Bank Digital Currencies (CBDCs) that strip citizens of financial privacy and create centralized data "honeypots."

• The Three-Pillar Policy Solution:

1. Codify the Right to Self-Custody and Open-Source Node Operation: Explicitly distinguish in law between centralized custodial intermediaries (which must be strictly regulated for solvency, off-balance-sheet bankruptcy remoteness, and auditing—modeled on Switzerland’s FINMA "Crypto-Institution" and "Payment Instrument" licenses and Liechtenstein’s TVTG / Blockchain Act) and non-custodial open-source protocols and self-hosted wallets. Citizens and cooperatives must have the statutory right to hold their own cryptographic keys and run validation nodes without being treated as unlicensed money transmitters.

2. Statutory Right to Self-Custody & Multi-Signature Architecture: Enshrine in law the right of individuals, charities, and corporations to hold digital assets in self-custodial hardware and multi-signature setups (such as 6-of-9 multi-vendor HSM architectures) and to run validation nodes, explicitly exempting non-custodial software developers and open-source protocols from financial intermediary licensing.

3. Mandate Zero-Knowledge Compliance ("ZK-KYC" & "Know Your Agent"): Replace bulk personal-data collection with cryptographic verification. As you noted in your Zurich keynote (The Future of Payment & Tokenization on Blockchain), "public ledgers are transparent by design, which creates a privacy imperative. We must use advanced cryptography to protect trade secrets and intellectual property, prevent front-running, and avoid creating security 'honeypots'." Regulators should officially recognize Zero-Knowledge Proofs (ZKPs) and Self-Sovereign Identity (SSI) so citizens—and soon autonomous AI software under "KYA (Know Your Agent)"—can mathematically prove regulatory compliance (such as non-sanctioned status or tax residency) without surrendering their identity or transaction history to centralized corporate databases.

4. Integrate Flexible-Load Mining into Public Renewable Grid Policy: Rather than blanket restrictions on Proof-of-Work, energy regulators should classify cryptographic compute and Bitcoin mining as an automated demand-response "flexible load option" to underwrite sovereign renewable microgrids and capture wasted methane flares.

5. Democratizing Community Infrastructure (Public RWA Tokenization): Allow local councils and community land trusts to issue fractionalized, tokenized municipal bonds (in denominations as low as £10) directly to local residents to fund social housing, local transport, and cooperative enterprises—bypassing expensive City of London underwriting fees and keeping investment yields inside working-class communities.

6. Bankruptcy-Remote Segregation for Centralized Custodians: As the UK FCA authorisation gateway (opened September 30, 2026) brings crypto exchanges and stablecoin issuers under FSMA supervision, require all centralized custodians to hold client digital assets off-balance-sheet with cryptographic Proof-of-Reserves (modeled on Switzerland’s FINMA "Crypto-Institution" license and Liechtenstein’s TVTG), making customer funds 100% bankruptcy-remote.

7. Establish the World’s First Statutory "Know Your Agent" (KYA) Framework: Create a legal and cryptographic standard allowing UK businesses, public institutions, and cooperatives to register autonomous AI agents and robotic hardware with verifiable decentralized IDs and cryptographically bounded spending limits.

 Your perspective on crypto, its politics and the future? (2-3 minutes)

Intro:

Good evening. I’m an electronics engineer by training, and for the past fourteen years my work has focused on one question: how do we upgrade the underlying plumbing of global value transfer?

Network of information vs network of value

I view blockchain through a simple structural lens.

The internet we have used for thirty years is a "Network of Information"—a "Communications Exchange Protocol" that "Allows to send information anywhere in the world instantaneously." What Satoshi Nakamoto’s 2008 whitepaper unlocked—and what The Economist famously called "The trust machine"—is a "Network of Value": a "Value Exchange Protocol" that "Allows to transmit value anywhere in the world instantaneously" without relying on a rent-seeking intermediary.

Regulation is welcome when it enforces strict solvency and bankruptcy-remote custody on centralized intermediaries. However, regulation becomes dangerous when it confuses centralized middlemen with open-source code, or when public ledger transparency is allowed to erode citizen and corporate privacy.

Bitcoin vs bitcoin

• Capital 'B' Bitcoin is an open, immutable, peer-to-peer settlement networkthat "invented digital scarcity without the need for trusted parties to record the ledger."

• Small 'B' bitcoin is a scarce digital commodity—what I call "PROGRAMMABLE HARD MONEY"
  While bitcoin were introduced as a peer-to-peer electronic cash system, evolved into an antifragile store-of-value asset—digital gold secured by thermodynamic Proof-of-Work.

Now is it:Currency or an asset?

• When people debate whether crypto is a currency or an asset, they are really observing how a new monetary standard matures.

• Now the main difference between the currency or just the asset is its use as a medium of exchange. As much as different blockchain protocols offer different settlement times between parties, most blockchains can transact close to the speed of light.
  Bitcoins and is now scaling through Layer-2 protocols like Lightning and Zero-Knowledge proofs to serve once again as a high-velocity currency.
  
  For example, Bitcoin is building layer 2 protocols to support native and tokenised payments. Layer 2+ protocols sit on top of base/Bitcoin protocol  just like your SMTP mail protocol sit on top of TCP/IP portocol, Layer-2 payment channels like the Lightning Network, or through regulated stablecoins—which already exceed $214 billion to $300 billion in supply and process "35 trillion in annual volume"—the technology functions as high-velocity digital currency.

What about its politics?

As I tell students, blockchain creates "a new jurisdiction called cyberspace, and in this land is governed by code that has no value judgement and just executes valid statements and reject any and all invalid statements." While early political theory viewed blockchain purely as liberation from the state, we now face a stark fork in the road: "Digital money vs Central Bank Digital Currency." If states and commercial giants deploy programmable CBDCs and dragnet surveillance without cryptographic privacy, money becomes an instrument of social control—capable of freezing dissidents, debanking citizens without due process, and tracking every human interaction.

At its origin, "By separating state control from money and establishing self-sovereign, peer-to-peer networks, individuals gain financial independence and protection against arbitrary asset devaluation, capital controls, and overreaching regulatory enforcement." While that sounds traditionally libertarian, I have long argued that Bitcoin is "the forgotten asset in an ESG portfolio"—and one that the centre-left should examine seriously rather than cede to speculators:

• Socially, it is a 24/7/365 public utility for "Financial Inclusion (Remittances, offering banking, savings and private property to all)", "Empowering people with no access (Eg: women of Afghanistan, refugees)" in an opt-in system that disrupts extractive remittance monopolies.

• Environmentally, Proof-of-Work miners act "as a flexible load option" that monetizes stranded renewable energy and flared methane, "accelerating the sustainable energy adoption."

• Politically, it forces a defining choice for the 21st century: "Digital money vs Central Bank Digital Currency"—open, participatory public rails where citizens retain self-sovereignty, versus programmable state surveillance money.

And what of the long-term future?

Whether we are stabilizing Earth’s climate with renewable microgrids, coordinating autonomous AI agents under a shared rules-based covenant, or eventually transacting beyond Earth where physical gold and paper cannot travel, open cryptographic protocols are how humanity scales trust without scaling bureaucracy. The challenge for policymakers today is to stop fighting the last century’s war and start harnessing these protocols for the public good."

Public blockchains are transparent by design, which creates an urgent privacy imperative. In my recent work at pew256, we emphasize that "Cryptography is a defensive tool." The future of a free digital society depends on deploying Zero-Knowledge Proofs (ZKPs), Self-Sovereign Identity, and multi-signature self-custody—tools that allow individuals and institutions to prove they are playing by the rules mathematically, without surrendering their autonomy or creating centralized data honeypots."

Because we are entering an era where AI agents and autonomous machines do not just assist humans—they autonomously manage workflows, logistics, energy grids, and compute. A delivery drone, an autonomous EV, or an enterprise AI agent cannot walk into a High Street bank branch with a passport to open a checking account