Cryptocurrency regulation in the United States had had its twists and turns. It has been evident that the US Government has had its hands full at both Federal and State levels on the issue of cryptocurrency regulation and how best to handle it.
E-Crypto News caught up with Ben Weiss, Chief Operating Officer (COO) at CoinFlip about this. CoinFlip and the Blockchain Advocacy Coalition (BAC) in California had pulled together their efforts to support a new resolution AB-2150 in the California assembly. The bill introduced by ASM. Ian Calderon is the start of a process that will create a new framework for cryptocurrencies and other digital assets. Here is what Ben had to say.
Ben Weiss, Chief Operating Officer (COO), CoinFlip
- In your opinion why do you think that the US Federal Government is slow in creating a regulatory framework for cryptocurrencies?
Right now, there is a somewhat justified skepticism of technology. Congressional hearings have shown us both that Americans cannot trust their data to the current reigning tech companies and that many people in Congress don’t have a deep understanding of how social media works. Given that digital assets are much more complex, it’s unsurprising they have been slow to develop a framework. The industry needs to work together to push for progress both at a state and federal level.
2. In a nutshell, what are the basic elements of the AB-2150 Bill?
This bill would require the Department of Business Oversight to conduct a study to determine the feasibility of enacting in California a measure equivalent to the Proposed Securities Act Rule 195 and report its findings to the Legislature. The bill would require the study to evaluate potential benefits and costs of the exemption to the state.
3. How can Creating a Statewide framework for the regulation for cryptocurrencies and their underlying technologies protect consumers and help cryptocurrency projects at the same time? How can a balance be struck?
The biggest issue with current regulations is a lack of clarity. By developing a straightforward framework, governments encourage investment and industry growth. Creating strong consumer protections will keep bad actors from competing with legitimate products and help the crypto industry gain legitimacy in the general public’s eyes.
4. How has the current uncertainty concerning digital assets within the United States affected progress and innovation?
According to research done by the Blockchain Advocacy Coalition, the United States has lost nearly half its market share of the crypto industry since 2012. Companies have been choosing to domicile in Switzerland, Singapore, Malta, and other countries. Anywhere with a more straightforward regulatory framework.
5. In your opinion do you think that the Chinese are ahead of everyone else when it comes to creating a framework for digital assets?
The Chinese Government has undoubtedly made growing their native blockchain industry a considerable priority.
The CCP recently unveiled their digital yuan. However, this digital currency represents a much more centralized approach to implementing blockchain technology. The nationwide implementation of a distributed ledger to improve their financial sector still leaps and bounds ahead of the current U.S. initiatives. Along with their native digital currency, China has made substantial investments into mining operations for more decentralized cryptocurrencies like Bitcoin, notably removing mining operations from the CCP’s list of “undesirable activities.”
6. What benefits do you think digital assets and their technologies can bring to the California economy?
It’s a multibillion-dollar market that can provide better financial services. So really, two things. The first is an economic benefit the industry can bring if adequately regulated, including jobs and tax revenue. The second is for consumers. Institutional finance has not provided access to everyone and is still discriminatory. We provide financial services to unbanked or underbanked customers and believe that is the future of crypto- empowering more people with greater access to services by removing intermediaries.
7. In your opinion do you think that we will be seeing greater adoption of digital assets and their technology? Please state your reasons why?
Yes, and it’s happening right now, digital assets and blockchain technology are in the process of being integrated with legacy systems.
U.S. legislators have been discussing the implementation of a digital dollar throughout the year because of the bungled COVID-19 stimulus rollout.
In March, while debating what became the CARES Act, Congressional leaders considered creating a federally regulated digital currency and sending payments to digital wallets held at the Federal Reserve. It is easy to see why the idea was appealing: Digital payments are fast and safe. Setting up no-fee digital wallets for consumers could help get stimulus funds into the hands of all Americans more efficiently than the current banking system can.
The digital dollar was stripped from the final version of the CARES Act, but the idea is not dead. Congresswomen Rashida Tlaib (D-MI) and Pramila Jayapal (D-WA), included mention of a “digital public currency wallet system,” which could be developed by 2021, in another stimulus bill they introduced recently.
The technology has clear benefits, such as speed, transparency and immutability. New products like P2P loans on the blockchain and decentralized financial services create options outside the traditional banking system. Currently, we’re just at the beginning of the adoption cycle, and we look forward to seeing further participation.
8. What do you think is the way forward for the Commodity vs. Security dilemma for certain digital assets? How can this be resolved?
There needs to be a taxonomy, with clear definitions for what is a security and whats not. That’s why we are proud to support AB-2150, which would help California create a clear regulatory framework and give the state time to study these products and create clear definitions.
9. In your opinion do you think that other states within America be able to look past political differences and copy California’s model should the AB-2150 proposal get passed?
Yes, I hope the work we’ve been doing here serves as a template for other states.
10. Do you think that the United States will still lead in the digital assets field in the next three years? Please explain your reasons?
I think we will continue to lose businesses and innovation to places like Singapore and Switzerland unless we create a better regulatory environment here. We are definitely at risk of falling behind globally, and other countries have invested time and money in growing their crypto industries. I think we can still lead, but we need to start working with our policymakers to make that happen.