Coinbase calls on Congress to address crypto regulation to prevent innovation drain
Coinbase Chief Policy Officer Faryar Shirzad is calling on the US Congress to pass clear crypto regulations, emphasizing that without action, innovation could move overseas and American consumers may be left vulnerable.
In a policy letter titled “Why Congress Must Act: Clarity for Crypto and Consumer Protections,” Coinbase outlined the urgent need for legislative clarity in the digital asset space, stressing the impact of blockchain technology on the global economy.
The exchange urged lawmakers to develop a framework that supports innovation while also protecting consumers. According to Shirzad:
“The absence of clear legislation in the United States stifles potential, leaves consumers exposed, and drives innovation overseas.”
Key legislative priorities
Coinbase’s letter highlighted key legislative priorities, such as defining digital assets, giving the Commodity Futures Trading Commission (CFTC) oversight of crypto spot markets, and establishing clear rules for stablecoins and capital raising.
The company also advocated for a regulatory framework that differentiates between securities and commodities, which has been a point of contention with the Securities and Exchange Commission (SEC).
Among its policy recommendations, Coinbase emphasized the need to protect DeFi and digital commerce from excessive regulation while ensuring that centralized platforms holding customer funds meet high transparency and security standards.
The company argued that blockchain networks should allow users to control their digital assets without unnecessary restrictions, warning:
“The risks of inaction are clear. Without regulatory clarity, the US will continue to lose its edge in blockchain innovation.”
As lawmakers debate crypto-related proposals, Coinbase’s appeal for clear guidelines aligns with industry advocates’ calls for enforceable regulations.
Shifting tides
Under the Biden administration and former SEC Chair Gary Gensler, a strict stance on digital assets was maintained, with some tokens considered securities. However, the regulatory landscape has shifted positively under the new administration.
Industry leaders see an opportunity for balanced regulatory discussions as lawmakers show a growing willingness to engage with crypto firms and consider legislation that promotes innovation rather than solely focusing on enforcement actions.
Coinbase emphasized the importance of legislative action to maintain US leadership in the global digital economy, pointing out that over 52 million Americans hold crypto assets.
Shirzad stated:
“Passing thoughtful legislation will protect consumers while empowering them to participate fully in the blockchain economy.”
With the regulatory landscape evolving, lawmakers are faced with a crucial decision: embrace a framework supporting responsible growth or risk pushing the industry abroad.
Coinbase believes that thoughtful regulation can empower developers, protect consumers, and position the US as a global leader in digital assets. However, hesitation could be costly in a competitive global market.
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