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Coinbase Says US Should Create New Cryptocurrency Regulator


Coinbase Founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown on May 15, 2019 in New York City.

Steven Ferdman | Getty Images

The United States is expected to create a new regulator to oversee digital asset markets, Coinbase said in a new policy proposal released on Thursday. He warned that failure to properly regulate could leave the country even further “behind” other governments.

The proposal comes a day after one of its investors, venture capital firm Andreessen Horowitz, released his own take on how next-generation internet services, including blockchain and digital assets, should be. regulated. Executives of a16z, as the company is known, are scheduled to meet with leaders from across government this week.

Coinbase’s vision overlaps that of Andreessen Horowitz, but includes nuanced differences and focuses more narrowly on digital assets. While a16z has argued for collaboration between regulatory agencies, Coinbase said in its policy report that there should be only one regulator for digital asset markets.

Coinbase policy director Faryar Shirzad told CNBC that his team is deliberately keen to put together a bold plan to spark discussion.

“We started where a lot of people start, which is taking the existing multiplicity of regulators and trying to figure out what minimal surgery you could do to make things work,” Shirzad said. “And then there was a point where, maybe three or four weeks ago, we kind of looked at each other [and] we said that it takes more effort to try to adapt the current system which is based on an old market structure – more intellectual effort, I would say – than to start from scratch. “

He acknowledged that forming a new agency was certainly not the “least resistance” route.

“I think in the end what we thought, because our proposal is only the beginning of a conversation, that it made sense for us not to compromise on the fundamental points of principle that we think that people, that policymakers, should be thinking, ”he said. said in a previous call with reporters.

Shirzad said on the previous call that the company has already met with around three dozen lawmakers’ offices as well as several agencies to discuss aspects of the proposal. He said Capitol Hill’s comments have so far been “welcome”.

In general, Coinbase said in the policy report that it wants a “clear and comprehensive approach to regulating digital assets and regulation fit for purpose.” He said regulation must recognize how technology can benefit the public and warned that the United States is already “behind” other governments when it comes to creating comprehensive regulation of digital assets.

“Failure to take similar action,” Coinbase wrote, referring to the “unified approach” to digital assets taken by the UK, EU and Singapore, “the US risks becoming a” “Regulator as opposed to the primary” “shaper” of modern financial services – a position the United States has long held. “

The company has divided its suggestions into four main pillars:

  • Create a new regulatory framework for digital assets separate from that of the traditional financial system.
  • Give the responsibility for regulating digital markets to a new single federal authority, in addition to a non-governmental self-regulatory body, similar to that which exists in traditional markets.
  • Protect holders of digital assets from fraud and market manipulation, and demand disclosures to promote transparency.
  • Promote fair competition and interoperability between products.

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