Coinbase Calls for a New, Dedicated Crypto Regulator that “Comprehends this Technological Revolution”
The largest cryptocurrency exchange in the US wants the US to be the ‘shaper’ of modern financial services instead of a ‘taker’ of regulations which is at risk of becoming.
Cryptocurrency exchange Coinbase has joined the ranks of crypto firms pitching a blueprint for regulating the market.
On Thursday, Coinbase CEO Brian Armstrong penned an opinion piece in the Wall Street Journal calling for clear rules that would benefit the public and creating an oversight regime separate from existing market regulators while promoting interoperability, fair competition, and innovation.
The largest crypto exchange in the US suggests “regulatory pillars” to guide the regulating process under an industry-specific framework with disclosure requirements for crypto businesses.
Additionally, Coinbase doesn't want regulators to rely on “laws drafted in the 1930s,” which “could not comprehend this technological revolution.”
“It didn’t make sense to take a legacy regulation and somehow transform it into an agency that would be able to look at these markets anew,” said Faryar Shirzad, Coinbase’s chief policy officer.
Under Coinbase’s proposal, decentralized exchanges (DEXs) wouldn’t qualify as a marketplace for digital assets (MDAs), and the regulator would have the authority to approve any crypto besides Bitcoin and Ether for listing or trading in the US.
The ideas in the proposal also cover setting standards through a self-regulatory body and creating a safe harbor for new crypto projects.
This comes as regulators try to develop ways to regulate the crypto market, with the White House considering launching a broad initiative to review and coordinate crypto policy, and the Treasury Department is considering applying the same rules for stablecoins as to banks.
“We’re starting to see a much more active political mentality within the crypto community,” said Kristin Smith of the Blockchain Association, noting that many crypto companies have recently started to hire lobbyists for the first time.
“The industry is doing all the types of things we need to have the expertise and people in place.”
We're excited to be launching a series of posts describing the current state and possible pathways for crypto regulation in the US!https://t.co/gogMAHLjAs
— SBF (@SBF_FTX) October 14, 2021
Earlier in the week, reports came that VC giant Andreessen Horowitz (a16z) executives will be meeting with the “top leaders at the White House, executive agencies, regulators, House, and Senate.”
The agenda of the meeting defined web3 as a group of technologies encompassing blockchain, cryptographic protocols, digital assets, decentralized finance (DeFi), and social platforms.
“Web3 represents the alternative to a digital status quo that is frankly broken,” Tomicah Tillemann, global head of policy for a16z, told CNBC in an interview.
“Web3 is the alternative, it is the solution we’ve been waiting for. It is the response to the challenges that have emerged out of web2. And for that reason, it is absolutely critical that policymakers start to undertake the steps required to get this right.”
He further said, web3 regulation goes beyond cryptocurrencies and covers NFTs, data storage, and internet connectivity.
Tilman noted that the US is losing this race of digital infrastructure that will determine the long-term success of a country in the 21st century. “The United States is at risk of becoming a ‘taker’ of regulation as opposed to the primary ‘shaper’ of modern financial services — a position the United States has long occupied,” Coinbase wrote.
“This is about the future of the internet.”