On October 14, the cryptocurrency exchange Coinbase released a document titled “Digital Asset Policy Proposal,” calling on Congress to create a new agency to oversee the cryptocurrency industry. The representatives explained the need to improve the regulatory framework and adapt it to the industry.
Coinbase regulatory proposal
Today we're launching our Digital Asset Policy Proposal (dApp) which we hope will help chart a course for clear regulation of cryptocurrency and web 3.0 in the US. It's critical to bring clarity to this space and ensure America remains a financial leader. https://t.co/LYEMpmS99T— Brian Armstrong (@brian_armstrong) October 14, 2021
The world’s first public crypto exchange, Coinbase , has proposed to the US authorities to create a regulator at the federal level that will have powers in the area of cryptoassets. The company spent several weeks drafting the document, discussing the advanced standards with a wide range of experts from various industries.
The idea of Coinbase is that it is impossible to apply the laws of the pre-computer age to innovations that need urgent help from lawmakers, otherwise regulators will stop the development of blockchain technologies. For example, the SEC refers to securities laws that are intended for stocks and bonds. Coinbase believes that crypto assets are fundamentally different from them and incompatible with the existing regulatory framework.
The management of the exchange is convinced of the need to create a separate body that will develop a new process for registering cryptocurrency companies and trading platforms. The regulatory project includes four main axes:
1. Regulate cryptoassets under the new structure.
2. Designate the regulatory authority and the creation of a self-regulatory body.
3. Empower and protect the owners of crypto assets.
4. Promote interoperability and fair competition – crypto asset markets must interact with the products and services of the crypto economy .
Coinbase Policy Director Faryar Shirzad described the current cryptocurrency regulatory regime as “a legacy of the paper age.” He believes that Bitcoin (BTC) and Ethereum (ETH) should be exempt from regulation given their decentralized nature.
“A single authority is needed to ensure effective regulation. There is no point in giving regulatory powers to outdated authorities that don’t have the time to develop the technologies that underpin digital assets, ”said Shirzad.
Later, Coinbase CEO Brian Armstrong expressed his personal opinion on the current regulation of the crypto industry in the United States. The current system of financial regulation does not work for open decentralized networks, he said. The regulation revolves around centralized financial intermediaries who do not participate in crypto transactions.
Implementing Coinbase’s proposal is not an easy challenge, as it requires support from Congress and the White House. However, Coinbase actively interacts with the US government. Recall that in September, the crypto platform signed an agreement with the US Department of Homeland Security on the use of the Coinbase Analytics analysis tool.