"Elements of past laws do not accommodate the efficiency, seamlessness and transparency of digital asset markets," the exchange says.
Coinbase is calling for one regulator to be made responsible for digital asset markets — and for cryptocurrencies to fall under a separate framework.
The exchange says it has embarked on a “rigorous consultative process” that involved months of discussions with regulatory experts and government officials.
It argues that cryptocurrencies and blockchain “do not neatly fit into the current structure” set up to regulate financial activity — and that confusion reigns because a number of agencies currently have oversight over this fast-moving sector.
Although Coinbase’s demands would be a significant coup for the industry, not least because it could embolden financial institutions to gain exposure to digital assets, getting congressional approval for the plans may be a different matter.
Coinbase’s chief policy officer, Faryar Shirzad, said:
“Elements of past laws do not accommodate the efficiency, seamlessness, and transparency of digital asset markets, and thus risk serving as an unintended barrier to current innovations in the digital asset economy. We hope our ideas serve as a helpful starting point for shaping a U.S. regulatory system that adequately reflects the evolving cryptoeconomy and its extraordinary potential.”
Four Pillars, Five Core Principles
The other two fundamental pillars in Coinbase’s plan include protecting and empowering those who own digital assets — as well as promoting interoperability and fair competition. This is accompanied by five core principles that include delivering strong investor protection, giving businesses legal certainty, promoting innovation and technology neutrality, and ensuring robust, effective supervision.
In a stark warning, the executive summary for Coinbase’s digital asset policy proposal warns that laws drafted back in the 1930s “could not contemplate” the technological revolution cryptocurrencies provide, adding:
“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. Doing this will have profoundly harmful economic implications and undermine the United States’ leadership at a time when technology is so critical to this country’s geopolitical strengths.”
“Millions continue to pay too much and wait too long to transfer funds to loved ones overseas or to invest their money directly in projects and ideas they care about.”
Crypto companies in the U.S. have long expressed exasperation over the lack of clarity they receive from regulators — including Coinbase.