Brian Armstrong, the CEO of Coinbase (NASDAQ:COIN), America’s biggest cryptocurrency exchange, has released a regulatory framework for global crypto regulation to deal with the aftermath of the FTX collapse.
Armstrong Calls for Stablecoin Regulation
In a blog post published on Tuesday, December 19th, Armstrong addressed his views on cryptocurrency regulation, discussing how regulators can use a “realistic blueprint” to “restore trust” damaged by the FTX collapse.
According to Armstrong, stablecoins form the foundation of a “new era of innovation in financial services.” Hence, he believes that they should be regulated under standard financial services laws and what “a modern-day Howey Test.”
Armstrong hopes that the implosion of FTX “will be the catalyst we need to finally get new legislation passed.” He adds that regulatory clarity will be a good first step, but called on the agencies to ensure there is a level playing field.
Decentralization Should Be Left Alone
Armstrong has suggested that after stablecoin regulation, regulators target exchanges and custodians where additional transparency and disclosure are needed. He believes significant progress needs to be made in this area next year.
While Armstrong states that regulating centralized entities is the way forward, he says decentralized finance (DeFi) should be allowed to flourish as their open-source code and smart contracts are “the ultimate form of disclosure.”
On the Flipside
- For crypto regulation to work, Armstrong says companies, legislators, regulators, and customers from financial markets worldwide must work together.
Why You Should Care
Armstrong argues that regulating cryptos will help restore trust and move the industry forward after the recent FTX collapse.
How important is regulation? Read in:
Crypto Regulation: The Industry’s Number One Priority
Can Regulations Save Cryptocurrency Against Future Market Dips?