In a recent statement, Coinbase – one of the largest and most popular cryptocurrency exchanges in the world – made a case for creating a whole new regulation department to oversee the processing of cryptocurrency transactions.
Coinbase Has Some Big Ideas Regarding Crypto Regulation
Right now, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are tasked with examining crypto activity and digital processes. However, these agencies are largely required to oversee divisions of the standard financial space. They are not as well versed when it comes to crypto, which is still a rather new industry, and Coinbase thinks a whole new department needs to be created to accommodate the changing and growing arena.
In coming up with a current plan, Faryar Shirzad – the chief policy officer of Coinbase – admits that the plan is bold and loud primarily because the exchange is working to boost discussion and policy debate. He stated in an interview:
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, and then there was a point at which, maybe three to four weeks ago, where we just kind of looked at each other [and] we said it takes more effort to try to adapt the current system which is predicated on an old market structure — more intellectual effort, I would say — than it does starting from scratch… I think at the end what we thought, because our proposal is just the beginning of a conversation, that it made sense for us not to compromise on the core points of principle that we think people, that policymakers, should think about.
The move differs quite a bit from the recent stance of Brian Armstrong, the CEO of Coinbase, who commented not too long ago that regulation of the crypto space could potentially limit innovation and harm the industry. The change appears to stem from the idea that crypto regulation is happening whether we like it or not. Thus, Coinbase would like to see the United States draft how regulation will happen in the future rather than simply accept whatever comes along.
In a statement, Coinbase explained:
The United States is at risk of becoming a ‘taker’ of regulation as opposed to the primary ‘shaper’ of modern financial services — a position the United States has long occupied.
What Should This Division Do?
The company believes the new regulatory division should be in charge primarily of keeping traders safe from fraud and scams and promoting “fair competition and interoperability” between various tools.
Coinbase is one of the most revolutionary crypto companies in recent years, having become one of the first exchanges to go public on the Nasdaq. The move is widely considered responsible for bitcoin hitting its new all-time high of $64,000 last April.