Regulation Is a Feature.

Builders treat regulation as friction. Institutions treat it as permission. Permission is what turns a pilot into a program.

I did not always see it that way. For much of the early internet, many founders, including me at times, treated rules as friction to be minimized or routed around. Some of the most celebrated companies of the following decades grew that way. Some of them paid for it later.

Every platform shift reaches a regulation phase. It is a signal: the technology has become important enough to govern, and the institutions are getting ready to adopt it. The founders who complained loudest about rules in the earlier phases often discover that the rules have become their best protection against careless competitors.

Rules are how trust scales

Douglass North shared the 1993 Nobel Prize in economics for work on how institutions shape whether economies grow. His insight is simple. Rules let strangers deal with each other without a personal guarantee. That is the lesson I draw for builders. If you want what you build to outlive you, it has to be trustworthy without you in the room to vouch for it. Regulation, at its best, is how society encodes that trust.

A structure that has passed through regulators, auditors and institutional review is a structure other people can build on. Licenses are slow to earn and hard to copy. That scarcity is a moat. It is also a promise that someone accountable stands behind the system.

Watch it happen now

Digital assets are moving through this stage in real time. In July 2025 the United States enacted the GENIUS Act, its first federal framework for payment stablecoins. Whatever one thinks of the details, the signal is the one I described: the technology became important enough to govern, and institutions now have rules they can adopt inside. Agent commerce is a step behind. The teams that design for scrutiny now are the ones institutions will be able to adopt later.

Design for scrutiny

1. Name your future reviewerIdentify the regulator, auditor or institutional buyer who will eventually examine what you build. Read what they have published.
2. Build the records firstAudit trails, controls and approvals cost less to build in than to bolt on.
3. Start the slowest licenseList what you must hold to serve institutions. Begin with the one that takes longest to earn.
4. Ask the vouching questionWould this still be trusted if you were not in the room? If not, the structure is not finished.