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While no one can be sure of how the market will break out, it would seem that the blockchain technology – and the myriad of cryptocurrencies that have developed concurrently – will likely survive.
Their advent has the potential to reduce the cost of undertaking various financial transactions, which would be an advantage for investors and the US economy, as its financial markets would become more competitive than foreign competitors.
At the same time it is worth noting that the current environment, with its lack of regulatory certainty, also presents risks to its users: for example, no one can be sure which of the countless currencies will survive a potential shakedown of the market, that could make their cryptic investments worthless.
Cryptocurrencies also represent potential problems for the government: not only would it take measures to protect investors from putting their money in dubious assets, but would also like to make sure that encrypted transactions are not used for illegal activities. To do this, the government must not only decide how to regulate these assets, but also which government agency will take the lead role in doing so.
The latter may seem of interest only to those who delight in the arcana of bureaucracy, but in reality it is the determining factor for the definitive form of a future regulatory framework.
For example, the Securities and Exchange Commission recently announced that would soon provide more guidance on when it considered an initial currency offering an offer of securities, as well as some iinformation on how it would deal with secondary market offers. The The director of the SEC Corporation, Finance Finance, William Hinman, stated that the law on existing titles suggests one a cryptocurrency can be defined as a safety if his register is "centralized."& Nbsp;However, The president of the SEC Jay Clayton has declared that Bitcoin, which with its design is becoming increasingly centralized, is not a security.
Others in the regulatory space – in particular the former president of CFTC Gary Gensler–I opined that XRP, a digital tool for business applications used by companies like Ripple, could be a security, despite the fact that its registry is increasingly More decentralized. This incongruity could be a harbinger of future regulatory inconsistency.
There is simply too much diversity among the over 2,000 different cryptoassets in use to invite regulators to draw far-reaching conclusions without a structure that suits the realities of a very new technology, and we have not yet arrived.
While potential investors would no doubt appreciate greater clarity about the future regulatory oversight of the cryptocurrency market, it is worth asking whether these guidelines should come from the SEC or the Congress or the administration.
A wise senator for whom I once worked once told me that no one wins the election by solving a problem before voters realize that there is a problem that needs to be solved, so it may be imaginative to think that Congress has 39; appetite to provide clarity to this market.
However, the treasury department recently indicated who is studying the matter carefully and intends to propose a sort of guide soon, which would lead to the creation of a single regulatory framework for cryptocurrency. Ideally, this would include the contribution of the Financial Services Oversight Committee, which Treasury Secretary Steven Mnuchin chairs. Federal Reserve Chairman Donald Powell, SEC President Jay Clayton, Director of the Office for Consumer Financial Protection, and others also participate in the FSOC.
What we do not want is a battle between the Treasury, the SEC and other possible bureaucratic entities that potentially translate into redundant or excessive regulations and slow down the growth of blockchain and cryptocurrency.
It would be equally regrettable if this development delayed the development of weighted government regulatory actions, because without greater certainty in this regard new investors will be wary of making excessive commitments in this market.
I would like to suggest a possible normative path: in a paper I wrote at the start of this year with Robert Jennings and Julie Chon that we suggested that the United Kingdom consider pursuing a kind of financial regulatory coherence with the United States outgoing from the EU and contemplating its own financial regulatory context.
While the UK has had little to do to regulate its financial markets from the emergence of the EU, it has recently been very active in its regulatory oversight of cryptocurrency and the use of blockchain.
A potential path for the United States would be to pursue a regulatory framework similar to cryptocurrency / blockchain, starting with the current UK regulations.
In this scenario, the US government – presumably led by the Treasury – would coordinate the contribution of other agencies and stakeholders and use it to work with HM Treasury to arrive at a framework that both countries would find acceptable. This in turn would create a vast global financial market comprising two entire financial capitals, and its standards – for cryptocurrency regulation and much more – could serve as a basis for regulatory standards for other markets as well.
Regardless of the way in which it chooses to proceed, the government should create some sort of regulatory clarity in the environment of cryptocurrency and blockchain, and in this way one may be willing to receive input from the leaders in this technology. And the logical way to proceed would be for the Treasury to set a course and for the SEC – and other government agencies – to follow its lead.
abstract concept bitcoin electronic circuit bord gold backgroundGetty
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While no one can be sure of how the market will break out, it would seem that the blockchain technology – and the myriad of cryptocurrencies that have developed concurrently – will likely survive.
Their advent has the potential to reduce the cost of undertaking various financial transactions, which would be an advantage for investors and the US economy, as its financial markets would become more competitive than foreign competitors.
At the same time it is worth noting that the current environment, with its lack of regulatory certainty, also presents risks to its users: for example, no one can be sure which of the countless currencies will survive a potential shakedown of the market, that could make their cryptic investments worthless.
Cryptocurrencies also represent potential problems for the government: not only would it take measures to protect investors from putting their money in dubious assets, but would also like to make sure that encrypted transactions are not used for illegal activities. To do this, the government must not only decide how to regulate these assets, but also which government agency will take the lead role in doing so.
The latter may seem of interest only to those who delight in the arcana of bureaucracy, but in reality it is the determining factor for the definitive form of a future regulatory framework.
For example, the Securities and Exchange Commission recently announced that would soon provide more guidance on when it considered an initial currency offering an offer of securities, as well as some iinformation on how it would deal with secondary market offers. The The director of the SEC Corporation, Finance Finance, William Hinman, stated that the law on existing titles suggests one a cryptocurrency can be defined as a safety if his register is "centralized." However, The president of the SEC Jay Clayton has declared that Bitcoin, which with its design is becoming increasingly centralized, is not a security.
Others in the regulatory space – in particular the former president of CFTC Gary Gensler–I opined that XRP, a digital tool for business applications used by companies like Ripple, could be a security, despite the fact that its registry is increasingly More decentralized. This incongruity could be a harbinger of future regulatory inconsistency.
There is simply too much diversity among the over 2,000 different cryptoassets in use to invite regulators to draw far-reaching conclusions without a structure that suits the realities of a very new technology, and we have not yet arrived.
While potential investors would no doubt appreciate greater clarity about the future regulatory oversight of the cryptocurrency market, it is worth asking whether these guidelines should come from the SEC or the Congress or the administration.
A wise senator for whom I once worked once told me that no one wins the election by solving a problem before voters realize that there is a problem that needs to be solved, so it may be imaginative to think that Congress has 39; appetite to provide clarity to this market.
However, the treasury department recently indicated who is studying the matter carefully and intends to propose a sort of guide soon, which would lead to the creation of a single regulatory framework for cryptocurrency. Ideally, this would include the contribution of the Financial Services Oversight Committee, which Treasury Secretary Steven Mnuchin chairs. Federal Reserve Chairman Donald Powell, SEC President Jay Clayton, Director of the Office for Consumer Financial Protection, and others also participate in the FSOC.
What we do not want is a battle between the Treasury, the SEC and other possible bureaucratic entities that potentially translate into redundant or excessive regulations and slow down the growth of blockchain and cryptocurrency.
It would be equally regrettable if this development delayed the development of weighted government regulatory actions, because without greater certainty in this regard new investors will be wary of making excessive commitments in this market.
I would like to suggest a possible normative path: in a paper I wrote at the start of this year with Robert Jennings and Julie Chon that we suggested that the United Kingdom consider pursuing a kind of financial regulatory coherence with the United States outgoing from the EU and contemplating its own financial regulatory context.
While the UK has had little to do to regulate its financial markets from the emergence of the EU, it has recently been very active in its regulatory oversight of cryptocurrency and the use of blockchain.
A potential path for the United States would be to pursue a regulatory framework similar to cryptocurrency / blockchain, starting with the current UK regulations.
In this scenario, the US government – presumably led by the Treasury – would coordinate the contribution of other agencies and stakeholders and use it to work with HM Treasury to arrive at a framework that both countries would find acceptable. This in turn would create a vast global financial market comprising two entire financial capitals, and its standards – for cryptocurrency regulation and much more – could serve as a basis for regulatory standards for other markets as well.
Regardless of the way in which it chooses to proceed, the government should create some sort of regulatory clarity in the environment of cryptocurrency and blockchain, and in this way one may be willing to receive input from the leaders in this technology. And the logical way to proceed would be for the Treasury to set a course and for the SEC – and other government agencies – to follow its lead.
abstract concept bitcoin electronic circuit bord gold backgroundGetty
