Brian Armstrong, Coinbase CEO is setting out what he calls a “realistic framework” for future crypto regulations.
Armstrong states in a new blog post that policymakers should regulate central entities to provide clarity and regulation, and start the process with stablecoin issuances.
According to the CEO, companies don’t have the right to issue stablecoins if they aren’t a bank. However, they can register as a national trust charter or state trust with the OCC [Office of the Comptroller of the Currency].
He recommends that they undergo rigorous annual audits, set up governance controls, and adhere to basic cybersecurity standards.
Armstrong believes that policymakers should adopt robust know-your-customer (KYC), and anti-money laundering (AML) regulations, establish a federal licensing and registration regime, ensure solid consumer protection rules, set minimum safeguarding standards, prohibit market misconduct, and require strong consumer protection laws.
He believes regulators should also clarify what crypto assets count as securities and what are considered commodities.
Armstrong explains that regulators need to ensure a level playing field.
It means that if your country publishes laws that all cryptocurrency companies should follow, then you must enforce them not only within your country but also with foreign companies who serve your citizens. Don’t believe every company.
Go check whether they are targeting your citizens even though you claim that they don’t. If you don’t have enough authority to stop the activity, you’ll need international law enforcement.
Additionally, he believes that regulators should allow decentralized crypto projects to remain innovative since they can guarantee customer protection independently. The CEO points out that self-custodial accounts, such as those held in self-custodial vaults, do not require trust in a third party. Smart contracts can be audited because they are open-source.
Self-custodial accounts should be treated just like financial services businesses. Because they don’t take over customer funds, self-custodial ones shouldn’t be regulated. Decentralized protocols, or hosting a website using IPFS [interplanetary file system], should be treated the same as publishing open-source codes, which are protected by freedom of speech in the US. These are financial services businesses that people may use to send money online. However, they don’t have the same regulatory authority as financial service providers.”
Armstrong states that he is “optimistic” that progress can be made next year on all these fronts, despite any public obstacles the crypto sector faces at the end of 2022.
Crypto can bring immense benefits to the globe if it has regulatory clarity for centralized players, equal playing fields, and preserves decentralized crypto innovations. Too many bad actors are distracting us from what is right now. We must all take responsibility for making this better. I believe that we can make significant improvements to the above by 2023 and get crypto legislation.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
