Key Takeaways
- Coinbase initiates processes towards regulating the cryptocurrency market in the US.
- Need for a distinct regulatory institution for Cryptocurrencies.
- Need for the US government to focus more on ensuring the safety of cryptocurrencies hodler.
Coinbase has taken cryptocurrency collaboration with the government to an entirely new height after it released a detailed plan to govern the country's cryptocurrency activities.
The crypto company claimed in a briefing titled "Digital Asset Policy Proposal" that the legal framework governing cryptocurrencies must be robust to meet modern society's demands.
From the Coinbase perspective, the world of cryptocurrencies has moved so far from the conventional finance system that legal references are no longer applicable.
Therefore, developing a distinct body saddled with regulating the cryptocurrency universe is key to progress.
Rather than imposing existing laws on a green industry like cryptocurrencies and blockchain-based products, the government should focus on developing a distinct system of laws for cryptocurrencies that differ from the prevailing law currently enforced in exiting markets.
In line with pillar one, coinbase proposes that the government instead of focusing on creating a symbiotic relationship between regulatory bodies like the SEC, IRS, and others, establish a distinct self-regulatory organization to oversee cryptocurrency activities.
Aside from instituting legal systems to govern cryptocurrencies activities, coinbase proposes that the government should also focus on ensuring that hodlers and users of cryptocurrencies are safeguarded.
The proposal also itemised market manipulations, promotion of market transparency and efficiency as grey areas where the government needs to create laws to protect users.
To ensure economic sustainability in the cryptocurrencies space, the company proposes that there should be interconnective and intercommunication between exchanges of cryptocurrencies or MDAs with other protocols.
The relationship between the US government and Coinbase is quite old. Being one of the first cryptocurrency exchanges to be regulated in the US, it was established sometime in 2021.
Coinbase is also the first North American exchange to become a public company. A feat yet to be replicated by any other exchange.
Aside from that, coinbase has been a convert of the schools that believe exchanges should develop symbiotic relationships with regulatory bodies.
It has demonstrated its faith by furnishing authorities with tools to identify cryptocurrency transactions.
Notwithstanding its numerous trophies, it is still doubtful to say Coinbase's proposal will be honoured by Bidens administration.
This is because the processes of building up the acceptance of the proposal are quite rigorous and expensive.
So lots of parties will focus more on the game of political interest than the overall benefit of the proposal.
In light of how cryptocurrencies have grown, do you agree with Coinbase that the US cryptocurrencies space is due for a robust regulation?
