Coinbase, a cryptocurrency trading platform, wants to guide any emerging regulation on exchanges. In an interview with TechCrunch Editor Matthew Panzarino at TechCrunch Disrupt 2021, Brian Armstrong, Coinbase CEO, stated that Coinbase is currently preparing a draft regulatory framework which federal lawmakers will be able to review and it hopes to distribute within the next month.
Armstrong stated that Coinbase is looking to serve as an advisor and advocate for the US in order to create sensible regulation. Actually, we have a proposal that we will be putting out this month or early next month. It is our proposed regulatory framework.
When forming new regulations, regulators often seek feedback from the industry, especially in industries where technological advances have outpaced the development and modification of existing regulation. Armstrong stated that he was asked for this proposal multiple times.
He said that he met with many people from government when I visit DC. They often ask him questions like "Do you have a draft?" or "Do you have a proposal?" to see if there is any way to get this federally regulated. Coinbase currently has 50 state regulators for money transmission licenses and 50 for lending licenses.
Armstrong would prefer to see a federal framework that could eliminate the need for dealing with state-by-state agencies and rules. He did however acknowledge that the proposal they presented would only be one piece of a larger puzzle. This will include input from other crypto industry entities as well as guidance provided by existing regulation.
He said that they have a proposal we want to make public that might help create some ideas about how to move forward. This will require input from many people and the willingness of legislators to engage with private industry to learn more about the opportunities.
Coinbase clashed recently with the SEC after it teased the launch of a Lend product which would allow users to stake crypto holdings in return for a return of yearly interest. Coinbase threatened to sue the SEC over the product after signalling that it would be considered a security and therefore must be regulated. Coinbase quickly retracted its plans to launch the product, shortly after making public its threat to the SEC and explaining its incomprehension about any regulatory backlash.
