Coinbase Issues Proposal for Crypto Regulation, Endorsing Four Key Recommendations

Exchange of cryptocurrencies Coinbase CEO Brian Armstrong stated that the company presented their proposal for cryptocurrency regulation after “more than 75 meetings with stakeholders in government, industry, and academia.” The firm suggests “four core pillars to inform future U.S. policy” in its Digital Asset Policy Proposal.

On Thursday, Coinbase released its Digital Asset Policy Proposal (DAPP).

Coinbase CEO Brian Armstrong tweeted:

“Today we’re launching our Digital Asset Policy Proposal (DAPP) which we hope will help chart a course for clear regulation of cryptocurrency and web 3.0 in the U.S. It’s critical to bring clarity to this space and ensure America remains a financial leader.”. He also added:

This is not about Coinbase — we completed more than 75 meetings with stakeholders in government, industry, and academia to help shape this proposal, and we feel it represents a consensus point of view. It’s inclusive and democratic by design.

Coinbase recently discovered the lack of regulatory certainty firsthand when it attempted to start a lending business. The business met with the Securities and Exchange Commission (SEC) of the United States to discuss the product. However, the SEC declared it a security and threatened to prosecute the firm if the scheme went through. Coinbase later abandoned its plans to launch the Lend product in favor of developing a proposal for crypto legislation.

Faryar Shirzad, Coinbase’s chief policy officer, stated on Thursday that the company’s plan aims to engage in the public discourse about the future of our financial system.  According to the firm, the discussion should center on “The blockchain-driven and decentralized evolution of the internet” and “The emergence of a distinctive asset class that is digitally native and empowers unique economic use cases.”

Four Key Recommendations:

Shirzad went on:

We recommend four core pillars to inform future U.S. regulation.

Firstly, “We need a new and digitally-native framework for how we regulate digital assets – one that doesn’t encumber innovation, inclusion, and financial empowerment for all sectors of society,” he stated.

Second, Coinbase’s chief policy officer went into detail:

End-to-end crypto services must be regulated by a single entity. Its jurisdiction would include establishing a new registration mechanism for digital asset marketplaces (MDAs).

Furthermore, Coinbase advised increasing consumer trust “by offering comprehensive client protection.” “This can be achieved through enhanced transparency processes, including tailored disclosures to inform purchasers of digital assets,” Shirzad said.

The fourth point is to “promote interoperability and fair competition.” Coinbase believes that “To realize the full potential of digital assets, MDAs must be interoperable with products & services across the cryptoeconomy.” Shirzad added that “This can empower and protect a thriving consumer and developer ecosystem.”

The firm also welcome anyone who want to comment on its crypto regulatory proposal.