Mark Weaden
Coinbase has laid out a proposal for the U.S. government to regulate digital assets in a policy paper
The U.S. government has continually faltered when it comes to the regulation of cryptocurrency. While there are many in the community that believe regulation would go against the principles of crypto, the reality is that regulation would drive the industry forward and into mainstream adoption.
Coinbase’s proposal warns against the possibility of the U.S. government falling “behind” other nations if they don’t act and regulate digital assets appropriately. The call for regulation has been ongoing for some time now. But, now with one of the major players in the industry laying out a roadmap for the government, we may now see some progress
What does the proposal say?
The new policy proposes that the U.S. create a new regulator dedicated to overseeing digital assets. The industry is so large and unique that requires an exclusive regulatory body, even more so as the industry evolves and grows in its own way.
Coinbase has suggested that the government base their regulatory structure based on four major pillars. Those being to create a framework for regulating digital assets that are separate from the traditional financial system. Pass regulatory responsibilities to a federal as well as a nongovernment self-regulatory organization, as we see in traditional financial regulation. With the main goal of protecting digital assets from holders and market manipulation, while promoting fair competition and interoperability between products.
The proposal was released just a day after one of the company’s main investors, Andreessen Horowitz, published its own vision for blockchain and digital asset regulation. While there are clear differences between the two proposals, there are also some crossovers.
A statement from Coinbase’s Chief Policy Officer Faryar Shirzad told CNBC “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 said. “And then 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.”
