Coinbase has listed six main areas of focus to address deficiencies in US crypto regulation. The chief policy officer, Faryar Shirzad, from the largest US-based exchange, has called on Congress to take prompt action in establishing clear and consistent rules for the industry.
This move underscores Coinbase's pro-crypto initiatives, which involve battling legal disputes to uncover regulatory misconduct and advocating for unambiguous and consistent cryptocurrency banking regulations.
The focal points for Crypto Law Reform by Coinbase:
In a detailed blog post, Faryar Shirzad outlined these priorities, stressing the importance of striking a balance between innovation and consumer protection. The lack of a defined legal framework, as mentioned in the blog, puts US innovation at risk and exposes consumers to fraudulent activities.
Coinbase suggested a precise definition of digital assets. Shirzad explained that this step would assist Congress in categorizing securities, commodities, and other digital tokens, ultimately ensuring investor safeguarding and market integrity.
Furthermore, the well-known exchange is pushing for the Commodity Futures Trading Commission (CFTC) to be given regulatory authority over crypto spot markets instead of the SEC. This realignment coincides with reported policy adjustments under the Trump administration, emphasizing a lighter touch from the CFTC.
Coinbase also advocates for clear guidelines on capital-raising activities. The SEC should be responsible for developing transparent rules for blockchain fundraisers without indiscriminately labeling all tokens as securities. It also looks to introduce regulations for stablecoins to guarantee their full backing and subject them to proper oversight for financial stability.
Another significant aspect is shielding decentralized finance (DeFi) and digital commerce from overly burdensome regulation. Coinbase believes maintaining a hands-off approach towards DeFi platforms and non-fungible tokens (NFTs) would foster innovation.
Lastly, Coinbase stresses the importance of providing clarity for centralized crypto entities to operate under transparent federal or state-level guidelines for accountability.
Shirzad warns that without legislative action, the US could lose ground in blockchain innovation, potentially driving developers and companies offshore. Failure to act could leave consumers vulnerable and impede America's standing in the digital economy.
Therefore, Coinbase urges policymakers to capitalize on this moment to establish a regulatory framework that balances innovation and consumer protection. These priorities sync with the exchange's projections for 2025, where a favorable regulatory landscape is expected to fuel market expansion.
Coinbase has been actively challenging regulatory overreach through legal battles, including taking on the FDIC for allegedly withholding crucial documents related to crypto oversight. Its Chief Legal Officer, Paul Grewal, recently testified before Congress on crypto debanking, reaffirming the exchange's commitment to fair regulatory practices. Additionally, Coinbase anticipates that a constructive regulatory environment will drive market growth.