Coinbase CEO Brian Armstrong has a prediction of what the future regulatory landscape for crypto might look like.
In a new interview on the All-in podcast, Armstrong says the crypto industry is unlikely to be exclusively regulated by the US Securities and Exchange Commission (SEC) as not all digital assets can be considered collateral.
“Here’s what I recognize. Crypto will be a lot of different things.
It won’t just be a regulator. Think of cryptocurrencies like bitcoin. It’s clearly a commodity. Or Ethereum. Many of them are products that should probably be regulated by products [regulator]or the CFTC.
If people want to raise money for their business as a security token, it should be regulated by the SEC as security. More clarity would be appreciated here…
Separately, there are also cryptocurrencies that will be currencies like stablecoins, and perhaps the Treasury should regulate them. Eventually there will be cryptocurrencies that are none of the above. They are works of art or something that probably shouldn’t even be regulated.
According to Armstrong, regulating the crypto industry requires a balance between protecting investors and being open to new innovations that are accessible to everyday people.
“We want to balance protecting people, but we also want the government not to be in a position where it picks winners and losers. Just because something is legal doesn’t mean it’s a good investment…
I think we all want to get rid of fraud, so if you commit fraud, meaning you lied to investors, it should be a crime. I want to work with everyone in government to make sure that doesn’t happen. The danger is that we’ll ever get into a situation where we say only the rich can invest now because there’s some sort of accredited investor test. It is inherently exclusive. I don’t like accredited investor laws.
If we ever get to a place where the government says, “You have to have XYZ criteria and a person with that many years of experience on your resume,” then we’re going to get into the government that’s sort of drafted by a committee, to pick winners and losers, and that’s inherently flawed because a lot of real breakthrough innovations look like bad ideas at first glance.
It’s the kind of thing that a government agency would never invest in or put money into, so we have to worry about the inherent tension. We protect people, but we don’t give government the role of picking winners and losers. »
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