Coinbase’s Chief Policy Officer (CPO) asked US lawmakers to establish a robust regulatory framework that benefits the crypto industry and American investors, suggesting six key priorities to protect users and develop the sector with clear regulations.
Coinbase Urges Congress To Unlock The Industry’s Potential
Coinbase’s CPO, Faryar Shirzad, shared a blog post on Wednesday urging the US Congress to act swiftly on crypto regulations, stating that it’s time to step away from the unwelcoming legislation that has harmed the industry’s potential in the US.
He pointed out that the lack of regulatory clarity has created an unfavorable, uncertain, and risky environment for innovators and consumers, which requires a new regulatory framework to “unlock the potential of blockchain while safeguarding the public.”
Shirzad suggests that Congress must design crypto legislation that empowers developers to build, protects customers through choice, fosters participation in the blockchain economy, and creates guardrails for centralized intermediaries.
Shizard on why Congress should act swiftly. Source: Coinbase
Coinbase’s CPO considers that Congress, under the new crypto-friendly administration, has the opportunity to “enact thoughtful legislation that provides clarity for innovators and businesses while protecting consumers.”
To reach a balance between innovation and protection, Shirzad advises Congress to keep the rules simple and intuitive, making them straightforward and accessible to everyone. Moreover, lawmakers should integrate crypto legislation seamlessly instead of “reinventing the wheel” and disrupting existing frameworks.
He added that protecting Decentralized Finance (DeFi) and digital commerce was crucial, as these cutting-edge innovation areas should remain free to develop without unnecessary restrictions. Additionally, Congress must focus on investor protection while evading overreaching, which could drive innovation offshore.
Congress Should Prioritize Clear Definitions
Shirzad outlined six key priorities for Congress to provide clarity and protect customers. First, US lawmakers should clarify the definition of digital assets, distinguishing between securities, commodities, and other types of tokens.
Second, Coinbase’s CPO considers that Congress should grant the Commodity Futures Trading Commission (CFTC) spot market authority, as digital assets like Bitcoin and Ethereum are commodities instead of securities. Per the post, the CFTC should be encouraged to oversee the crypto spot market, ensure transparency, and protect customers from fraud and manipulation.
Meanwhile, Shirzad proposed the US Congress should direct the Securities and Exchange Commission (SEC) to create rules allowing responsible fundraising, noting that developers “need clear pathways to raise capital for blockchain projects without every token being treated as a security.”
Other key priorities are establishing a Stablecoin framework that ensures stablecoins are fully backed and transparent and protecting DeFi and digital commerce, including DeFi protocols, smart contracts, and NFT platforms.
Lastly, Shizard considers that Congress must ensure clarity for Centralized entities. He suggested that centralized platforms that custody user funds should be regulated to ensure accountability and provide customers with confidence.
Coinbase’s blog post comes amid the company’s efforts to seek regulatory clarity in the US. The crypto exchange recently sent a letter to US regulators, asking for clarity on crypto banking barriers.
The exchange urged US regulators to confirm whether banks can offer services to crypto businesses. Shirzad explained that they “are very much of the view that we need a comprehensive ecosystem to support the crypto economy,” adding, “It’s beneficial to have broad participation in the crypto economy.”
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