- Considerations for how the United States should regulate cryptocurrencies were laid out in a new document published Thursday.
- Coinbase (NASDAQ:COIN) warned that if the country does not adopt adequate legislation on the matter soon, it would lag far behind other powers.
- Venture capital firm Andreessen Horowitz launched a similar proposal this week on the regulation of digital assets and online services.
Cryptocurrency exchange platform Coinbase, stated that the United States should create a new regulatory body dedicated exclusively to the supervision of the digital asset markets.
In the proposal, published by Coinbase on Thursday, titled: “Digital Asset Policy Proposal: Safeguarding America’s Financial Leadership,“ the exchange warns that the U.S. could lag behind other countries if it does not pass adequate regulations.
The proposal was launched by Coinbase after Silicon Valley venture capital company Andreessen Horowitz proposed a regulatory model for advanced internet services, including digital assets and blockchain.
To explain their proposal, Andreessen Horowitz (a16z) executives are scheduled to meet with senior government officials this week.
The Differences Between the Two Proposals
The two companies’ views on how digital assets should be regulated in the U.S. purportedly have some overlap, though the proposal from Coinbase contains certain differences from that of a16z, as it is focused on digital assets.
Although a16z believes that there should be collaboration between the various regulatory agencies, Coinbase’s policy brief argues that there should be a single regulatory body charged with overseeing digital asset markets.
Faryar Shirzad, Coinbase’s chief policy officer, revealed that his team is planning a bold strategy to open these discussions.
"We started where a lot of people start, which is taking the existing multiplicity of regulators and trying to figure out what minimal surgery you could do to make things work," Shirzad told CNBC.
He then indicated that “there was a point at which, maybe three to four weeks ago, where we just kind of looked at each other [and] we said it takes more effort to try to adapt the current system which is predicated on an old market structure — more intellectual effort, I would say — than it does starting from scratch.” Despite being aware that the creation of a new regulatory agency would not be easy, he pointed out that this in itself provides a good starting point for the discussion.
In previous statements to the media Shirzad said:
"I think at the end what we thought, because our proposal is just a beginning of a conversation, that it made sense for us not to compromise on the core points of principle that we think people, that policymakers, should think about".
Lobbying in Washington
Coinbase executives have already held meetings with lawmakers in Washington with the intention of addressing the issue, and comments and opinions from legislators have been welcomed, Shirzad said. The firm has also held discussions with certain regulatory agencies to discuss the content of the proposal.
Coinbase wants there to be a “clear and comprehensive approach to regulating digital assets, and for regulation that is fit for purpose.” In its policy brief, the company stressed that regulation must recognize the benefits that technology brings to the public.
At the same time, he warned that the U.S. is already “behind” other governments with respect to comprehensive regulations around digital assets. Coinbase believes that the U.S. should adopt similar measures to those of the European Union, the United Kingdom and Singapore on a “unified approach” to digital assets.
"The United States runs the risk of becoming a 'taker' of regulation rather than the primary 'shaper' of modern financial services, a position the United States has long held," the firm underlined.
Coinbase’s proposal is divided into four main lines of action:
On The Flipside
- Coinbase recently had to abandon its loan plans to avoid further clashes with the SEC.
- The agency has taken on a government spokesperson to testify for the convenience of digital assets, so it is believed that it would be in charge of such regulation.
- The company has expressed frustration regarding lawsuit threats launched by the SEC, which could perhaps explain their eagerness for a separate regulatory body.
Why You Should Care?
- The issue of regulation in the U.S. continues to grow in importance, driven this time by companies within the crypto industry that want to play a relevant role in the discussions.
- The regulatory issue has served to help institutional investors to take the risk of investing in cryptocurrencies and other digital assets.
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