Pennsylvania Congressman Glen Thompson has offered a thoughtful and well-articulated plan for “cryptocurrency regulation” that aligns with the US Treasury Department’s proposals.
Janet Yellen, speaking recently at American University, made some scholarly and thoughtful remarks about the right approach to regulating currencies and digital assets, innovation, and the policies around them.
The US Treasury Secretary noted the industry’s explosive growth from $14 billion to $3 trillion in just five years and its origins, even referring to the original Bitcoin white paper’s solution to prevent the same digital assets from being spent twice, a key criticism of systems preceding Bitcoin.
Yellen said, “The role of government should be to ensure responsible innovation — innovation that works for all Americans, protects our national security interests and our planet, and contributes to our economic competitiveness and growth. Such responsible innovation must reflect thoughtful public-private dialogue and consider the many lessons we have learned throughout our financial history. This kind of pragmatism has served us well in the past and I think it’s the right approach today. »
Adelle Nazarian is the CEO of the American Blockchain PAC, which protects blockchain innovation and digital assets in the United States and opposes legislation that limits the growth of cryptocurrency assets.
In a recent interview with the Huffington Post on cryptocurrency legislation, I observed that we need new rules, language, and a more elastic framework for initial coin offerings (ICOs) compatible with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations that would allow innovation to continue to thrive.
The U.S. Blockchain PAC that I lead as CEO welcomed Secretary Yellen’s strong guidance for a process to develop a legal and regulatory framework to protect the public while creating an environment conducive to innovation. As it happens, Rep. Glen “GT” Thompson (R-Pa.) has moved this process forward significantly by offering a thoughtful and well-articulated “crypto-regulatory blueprint.”
The “Thompson Principles” provide a framework for digital commodity exchanges, voluntary registration and qualified custodians of digital commodities. They also offer an improved process for creating digital products; provide full accounting of stablecoin assets and liabilities; to protect customers using stablecoins and register users of digital asset-backed products. They would comply with and apply to pre-sold digital products.
These proposals follow the process prescribed by Secretary Yellen. Let’s take the example of the proposed voluntary registration:
“Trading venues would opt for the [Commodity Futures Trading Commission] Digital commodity exchange regime or remain regulated under individual state funds issuer licenses. Trading platforms will be incentivized to choose CFTC regulation to reduce their regulatory burdens by facing only one regulator, be eligible to offer leveraged trading and be the entry point for new digital products for retail audiences. »
According to the Congressional Research Service, 49 states require registration as money senders. It takes millions of dollars and years of work through bureaucratic labyrinths followed by onerous and ongoing compliance requirements to make it a reality. This process is prohibitive for most startups, reducing innovation without providing significant additional public protection. Allowing companies to choose “one-stop shopping” honors Secretary Yellen’s advice for pragmatism.
Congress and the financial services industry finally understand that cryptocurrency is not just another extraordinary popular illusion or the result of the madness of mobs. The blockchain (from which cryptocurrencies are made) is fundamental to many important emerging technologies such as non-fungible tokens, Web 3 and the metaverse.
And President Joe Biden’s Executive Order on “Ensuring Responsible Development of Digital Assets” calls for risk mitigation while acknowledging that “the United States has an interest in ensuring that it remains at the forefront of the responsible development and design of digital assets and the technology that underpins new forms of payments and capital flows in the international financial system. … »
The White House, the Treasury Secretary and members of Congress, including Rep. Thompson and the chairs of the Congressional Blockchain Caucus — Reps. Bill Foster (D-Ill.), Darren Soto (D-Fla.), Peter Schweikert ( R-Arizona) and Tom Emmer (R-Minn.) – are representatives of the booming distributed ledger industry, as is the American Blockchain PAC.
The constituents of the public-private dialogue hailed by Secretary Yellen have already met. It’s time for all of these parties to come together in the secretary’s conference room.
Such a conversation would foster President Biden and Secretary Yellen’s respect for public safety, keep America at the forefront of responsible development, and shape the future of digital assets and technology.
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Yellen’s call for ‘responsible’ crypto innovation is right | Cryptocurrency
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