CEO of Coinbase Brian Armstrong Pens Editorial Telling Policymakers Crypto Offshoring is Bad for the Country

Brian Armstrong, CEO of Coinbase (NASDAQ:COIN) has published an Op-Ed on CNBC lambasting public officials that are standing in the way of digital asset innovation.

Coinbase, the only publicly traded crypto exchange in the US, may end up being collateral damage to the ongoing onslaught of regulation by enforcement impacting the crypto sector currently. The collapse of multiple crypto firms last year – first kicked off by the failure of TerraUSD/Luna – an erstwhile algorithmic stablecoin that was not very stable – has generated fear, uncertainty, and doubt for policymakers observing crypto markets. The aftershocks of Terra/Luna took down multiple firms as poor operational criteria in the digital asset sector were quickly revealed as contagion spread. To cap things off, FTX filed for bankruptcy following allegations of fraud – with both civil and criminal lawsuits filed.

More recent actions, like the SEC’s decision to charge Kraken with offering an unregistered security in its staking service, have generated another ripple of fear.

Armstrong is keenly aware of the challenges ahead for his firm in the current environment. Yet understandably, he would prefer bright-line rules from which he can manage the budding digital asset ecosystem as opposed to the more whimsical approach taking place today.

Armstrong stated:

“America is at a once-in-a-generation inflection point: we have the opportunity to be the leader in the digital currency space and reap the benefits this leadership enshrines, or we can concede our leadership role to geopolitical adversaries who are eager to take the mantle as the 21st century’s global heavyweight.”

He pitches digital assets as an upgrade to the traditional financial services ecosystem. As the US leads the world in this industry, Armstrong believes that the country is at risk of ceding its prominence in financial services to more innovative jurisdictions.

“While the consumer benefits that crypto could bring to the financial system are myriad, it’s also important to recognize the geopolitical benefits. The U.S. has long been the leader in global economic and political affairs, but its dominance is being challenged by other global superpowers. China, for example, has made significant progress in digital currencies and has already launched its own digital yuan. Additionally, the U.K., Japan, and EU have all made significant progress, with the EU most recently introducing MiCA which is intended to close gaps in existing EU financial services legislation by establishing a harmonized set of rules for crypto-assets and related activities and services.”

Whether you believe in blockchain or distributed ledger technology or not. Or maybe you question whether the future of assets is clearly digital; one thing is certain – innovation is messy, and change can be hard. And sometimes, the winners are not the ones you initially expect.

Amstrong asks the US government to provide a clear regulatory framework for digital assets that could have utility, may be securities or commodities, represent a currency, or perhaps a mix of characteristics. He states that no other country has spent as much time “trying to convince its citizens that crypto assets are securities. The U.S. is missing the forest for the trees.”

If the feds continue on this same path, they may be the cause for the demise of Coinbase, a company vetted and approved to become a publicly traded company by the SEC.

 



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