Cryptocurrency exchange Coinbase has proposed a new regulatory regime for the digital asset industry under the oversight of a single agency.
Coinbase released a document called “Digital Asset Policy Proposal” urging Congress to create a new agency to oversee the cryptocurrency industry. Coinbase executives have expressed dissatisfaction with the “patchwork” of regulators that control cryptocurrencies. These include the Securities and Exchange Commission (SEC) and the United States Commodity Futures Trading Commission (CFTC).
Coinbase believes that agencies are using outdated methods to regulate cryptoassets that are only suitable for traditional financial instruments. For example, the SEC refers to securities laws that target stocks and bonds. Digital assets are fundamentally different from them and incompatible with the existing regulatory framework, Coinbase said.
The management of the exchange is convinced that it makes sense to create a separate body that will develop a new process for registering cryptocurrency firms and trading platforms, according to which issuers of digital assets will be required to disclose relevant information to market participants. This body should also oversee the digital asset market and ICOs in order to protect investors from fraud and market manipulation.
According to the Decrypt publication, during a briefing with reporters, Coinbase Chief Policy Officer Faryar Shirzad described the current cryptocurrency regulation regime as “a legacy of the paper and pre-computer age.” Therefore, for US companies and consumers to take advantage of blockchain and cryptocurrencies, the industry needs a digital-savvy regulator. Shirzad believes that Bitcoin and Ether should be freed from regulation given their decentralized nature.
Implementing the Coinbase proposal is not an easy task, as it requires the backing of Congress and the White House. It is also unlikely that the SEC and other agencies will want to relinquish their powers. Note that Coinbase is actively engaging with the US government. In September, Coinbase signed an agreement with the US Department of Homeland Security to use Coinbase Analytics.
