TL;DR Breakdown
- Coinbase exchange makes good on its promise, publishes proposed regulatory framework for govt.
- The proposal is to make the public engage in conversation and spark debate, Coinbase says.
- Coinbase call for one regulator to improve innovation in crypto space.
Top American crypto firm, Coinbase exchange has published a Digital Asset Policy Proposal: Safeguarding America’s Financial Leadership (dApp) which provides a conceptual framework for justification and comprehensive regulation of digital assets in the US.
Coinbase exchange published the proposed framework after Brian Armstrong, the CEO of Coinbase, alleged that the United States Securities and Exchange Commission threatened to sue his company if they offered a crypto yield program that the SEC considers a security. The crypto firm experienced firsthand the lack of regulatory clarity.
During an interview with TechCrunch, Armstrong also said that Coinbase exchange wants to be an advisor and a helpful advocate for how the US can create that sensible regulation.
Faryar Shirzad, Coinbase chief policy officer who authored the proposal, wrote that the goal of Coinbase’s proposal is to “engage in the public conversation about the future of our financial system.” The company believes that the conversation should focus on “The blockchain-driven and decentralized evolution of the internet” and “The emergence of a distinctive asset class that is digitally native and empowers unique economic use cases.”
Coinbase exchange proposed regulatory framework
It broke down the approach down to a new framework of four pillars; regulate digital assets under a separate framework, designate one regulator for digital asset markets, protect and empower holders of digital assets and promote interoperability and fair competition.
The proposal also contained the benefits of the emerging system of digital finance for both consumers (democratization of financial markets) and regulators (more transparency and new ways to combat illegal activity).
Coinbase noted that laws drafted in the 1930s are a poor foundation for regulating the internet-native asset class and that forcing digital assets into the legal framework developed before the computer age could lead to stifling crypto innovation in the US.
Notably, Coinbase asked for only one regulator to avoid fragmented and inconsistent regulatory oversight of the innovative space. Coinbase suggested instilling consumer confidence “by providing robust customer protection.” Shirzad noted, “This can be achieved through enhanced transparency processes, including tailored disclosures to inform purchasers of digital assets.”
In conclusion, Coinbase exchange called for feedback on its proposal, noting that its communication lines are open for further debate.
