Coinbase Proposes a New Agency To Regulate The Cryptocurrency Industry
Coinbase, the leading exchange in America, wants to take the relationship with the U.S. government to the next level, issuing a fairly comprehensive proposal on how it believes the cryptocurrency markets and industry should be regulated in the country.
In a presentation titled “Digital Asset Policy Proposal,” the company explains that the ecosystem has grown so much that today it is imperative to improve the regulatory framework, adapting it to the needs of modern society.
For Coinbase, the crypto ecosystem has diverged so much from the world of modern finance that it is not possible to apply legal analogies. It is necessary to create a new regulatory body focused exclusively on controlling the crypto ecosystem.
Forcing the full spectrum of digital assets into supervisory categories codified before the use of computers risks stifling the development of this transformational technology, thus pushing offshore the innovative center of gravity that currently sits in the United States.It is time for a clear and comprehensive approach to regulating digital assets and for regulation that is fit for purpose … This requires establishing new laws and oversight structures for digital asset trading and disclosure.
What is Coinbase Proposing?
For Coinbase, the American cryptocurrency industry does not need a law but a new, more complex legal system.Coinbase’s proposal consists of 4 “Regulatory Pillars.”
Instead of adapting traditional laws to an industry as young as cryptocurrencies and decentralized products, the US Government should work on a specific legal framework for cryptocurrencies and digital assets that separates them from the rules that already exist and apply to traditional markets.
Similar to the previous point, Coinbase explains that instead of trying to achieve a synergy between various institutions (e.g., SEC, CFTC, IRS, etc.), the government should create a dedicated self-regulatory organization (SRO) in charge of regulating the cryptocurrency industry.
Coinbase asserts that in addition to regulating crypto, the government should create mechanisms to increase the security and confidence of users of decentralized products. The proposals name protection against market manipulation, promote greater efficiency of markets and increase their transparency.
For Coinbase, the Marketplaces of Digital Assets or MDAs should be interoperable with other protocols and platforms to promote a sustainable grwoth of the crypto ecosystem as a whole.
Coinbase Has Merits to Talk About Crypto With US Regulators
Coinbase has a long history with the US Government. It is one of the oldest regulated exchanges in the United States, founded in 2012 on the heels of Kraken’s success.
However, Coinbase has the honor of being the first North American exchange to go public, a feat that has yet to be replicated by any other company.
Moreover, Coinbase has been a strong proponent that exchanges should have a cordial relationship with regulators and maintains juicy contracts with law enforcement agencies, offering them tools for tracking crypto transactions and other confidential purposes.
But as much merit as it has, it is hard to think that the Biden administration could take Coinbase’s proposal seriously. The bureaucratic process of creating a new agency is too lengthy and expensive, and such a decision would likely give rise to political chess throughout the process, with agencies trying to protect their powers – and their budget allocations.Source