The "Do No Harm" Regulatory Framework for Emerging Tech
Let it breathe, understand it firsthand, then regulate in narrow, bipartisan pieces.
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 85%
Drawing on how the Clinton administration handled the chaotic early internet, Gonzalez argues lawmakers should resist regulating a new technology until they genuinely understand it. The approach: engage hands-on to build real expertise, separate what's well-defined (fiat-backed stablecoins) from what's still murky (algorithmic stablecoins), and legislate the narrow, well-understood piece first rather than one sweeping bill. Durable rules also require deliberately built bipartisan, bicameral coalitions instead of one-party riders on must-pass legislation, since those get reversed and create years of uncertainty. The framework prevents catastrophic overreach, like an infrastructure bill provision that nearly classified every crypto developer as a regulated broker, while still protecting consumers from real harm like undisclosed algorithmic stablecoin risk or tax evasion.
Origin
Modeled explicitly on the Clinton administration's hands-off approach to the early, messy internet, then applied by Gonzalez to crypto after he personally experimented with DeFi to understand it before legislating.
How to run it
- 1
Resist the Urge to Regulate Early
When a new technology emerges, hold off on broad rulemaking until lawmakers and regulators actually understand how it works, mirroring the Clinton-era approach to the early internet.
Watch out Pure inaction without visible engagement can be read as regulatory neglect rather than principled restraint.
- 2
Get Hands-On Before Legislating
Personally use the technology within ethical limits to build real intuition — Gonzalez traded a small amount in DeFi and donated any gains to charity rather than legislating purely from white papers.
Pro tip Treat it like being asked to regulate cell phones without ever using one — you need firsthand feel, not just theory.
- 3
Separate the Well-Understood from the Murky
Split the technology into components you can clearly define (e.g., fiat-backed stablecoins) versus ones still ambiguous (e.g., algorithmic stablecoins), and act only on the former.
- 4
Legislate in Bite-Sized, Narrow Pieces
Draft narrow bills addressing one well-defined problem at a time instead of one sweeping law, reducing risk of unintended consequences.
Watch out Broad definitions attached for unrelated reasons (like pay-fors) can accidentally sweep in innocent parties.
- 5
Build Bipartisan, Bicameral Support
Actively recruit co-sponsors from the other party and coordinate with the Senate before introducing a bill, since durable law must survive a change in political control.
Pro tip Listen for committee members whose comments signal alignment, then go tap them directly to co-author.
- 6
Stay Silent Rather Than Guess
If you can't yet define a clear rule for a sub-category, explicitly decline to regulate it unless people are actively being harmed.
In the wild
In the 1990s, chat rooms and other early internet spaces were rife with problems, and some in government wanted to shut it down or heavily regulate it. Clinton's administration instead let the internet develop and only regulated once its shape became clearer.
→ The internet matured into a defining economic engine before targeted regulation followed.
After the Terra Luna collapse, Gonzalez and colleagues focused early crypto legislation narrowly on defining a 'payment stablecoin' as fiat-backed, deliberately staying silent on harder-to-define algorithmic stablecoins.
→ The narrow approach built rare bipartisan momentum and became the first realistic candidate for passable crypto law.
A crypto tax-reporting provision slipped into a major infrastructure bill defined 'broker' so broadly it would have forced ordinary software developers to file IRS paperwork, nearly crippling the industry unintentionally.
→ The sponsoring senator had to publicly clarify legislative intent to limit the damage.
Common mistakes
Overreaching in a Single Bill
An infrastructure bill provision meant to target crypto tax evasion was drafted broadly enough to define nearly every developer as a 'broker,' almost sweeping the entire industry into requirements it wasn't designed for.
Legislating Without Bipartisan Buy-In
A GameStop/meme-stock reform bill passed the House on a party-line vote and died in the Senate, wasting months of expertise-building because it wasn't built to be durable.
Waiting Until You're an Expert to Engage Publicly
90% of Congress avoids the topic entirely rather than getting basic literacy, ceding the debate to a small number of vocal skeptics.
Is it for you?
Not ideal for
Fast-moving crises requiring immediate, decisive intervention rather than patient study.
From the transcript
“i actually think we should look to the clinton administration for how they handled the early internet and they orchestrated around the phrase do no…”
“my view is the mantra should be do no harm and take bite-sized pieces as they become obvious but don't overreach”
“if i don't feel like i understand something from a policy standpoint my reaction is i should be silent on it from a regulatory and…”
From the episode
From NFL to Startup COO to Congressman Regulating Crypto (with Rep. Anthony Gonzalez)
Anthony Gonzalez