Coinbase has identified six priority areas to correct the flaws in US crypto regulations. Faryar Shirzad, the company’s chief policy officer, has urged Congress to move quickly and offer clear and consistent regulations for the industry.
This is part of Coinbase’s efforts for a healthier crypto ecosystem, which include litigating to expose regulatory malpractice and pushing for clear and consistent crypto banking standards.
In a blog post on Wednesday, Coinbase’s policy point man laid out these priorities, arguing that an attuned approach to innovation and consumer protection is necessary. He said a lack of a clear policy guide leaves US innovations and consumers open to fraud-related threats.
Coinbase pushes for clearer crypto definitions and stronger oversight
Coinbase’s top priority is clarity on the definitions of tokens and transactions. It states that over 52 million Americans owning crypto need regulatory clarity. Congress should come up with a standard definition of digital assets, separating digital assets, securities, commodities, and other types of tokens, as this will protect investors and foster market integrity.
Shirzad added that the Commodity Futures Trading Commission (CFTC) should be granted spot market authority. He clarified that digital assets like Bitcoin and Ethereum are commodities, not securities, and it’s important to empower the CFTC to oversee their market. He says this will enhance transparency and protect consumers.
Coinbase acknowledges the struggles of fundraising and advises Congress to direct the Securities and Exchange Commission to develop rules that promote responsible fundraising while considering the welfare of the investors.
Stablecoins are important in bridging the gap between traditional currency and digital assets
Shirzad argues that a stablecoin framework is needed as it plays an important role in bridging crypto and fiat currencies. He calls on Congress to ensure stablecoins are safe, fully backed, and transparent. Such a legal guide could make stablecoins more competitive and innovative.
The policy specialist also urged Congress to safeguard DeFi and digital commerce. He called overloading them with regulations potentially stifling. While DeFi protocols, smart contracts, and digital commerce such as NFTs are the underpinnings of the blockchain, they should be exempt from regulatory overreach.
On the sixth pillar, he recommends that Congress prioritize providing clarity to centralized entities, according to Shirzad, centralized platforms that custody consumer funds/assets should be regulated at the Federal level.
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