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Brain Armstrong, The CEO, and founder of Coinbase, in a series of tweets mentioned what could be the ideal crypto regulations.
He says that first the centralized actors in the crypto market should be regulated. It is from where the most risk related to consumer harm is attached. He also claims it to be a ‘low-hanging fruit.’ Stablecoin issuer regulation is an excellent place to start because it will generate interest in DC and give some momentum.
A level playing field enforcement
In the second point in his blog, he mentions getting regulatory clarity and enforcing a level playing field. He points out that the major challenge is the regulatory authority looks out only for domestic markets. They should increase their focus on international markets. A modern-day Howey test can be created. He points out FTX being based in the Bahamas and serving the U.S. If the authorities had a keen eye on what it is doing internationally, probably the debacle would have been avoided.
Also read: Amid FTX Contagion, Crypto Traders Now Face Another Massive Risk
The decentralized aspects of crypto should come up with new innovations so that a stronger consumer base could be created. Customers can store their own cryptocurrency in self-custodial wallets without having to put their trust in a third party. Technology advancements like social recovery and multi-party computing will make it simple for everyone to hold their own cryptocurrency securely without having to rely on third parties.
How to manage the two aspects of crypto?
He says self-custody, DeFi, and Web 3 are the future. Also, calls out the decentralized platforms to introduce self custody wallet, which will make transactions more transparent and automatic. The centralized aspects should have stricter regulations, as these platforms are not transparent and disclosure is needed.
He is optimistic about these changes being made in the coming year, 2023. Cryptocurrency may assist the world greatly if there is legislative clarity for centralized entities, a level playing field, and decentralized crypto innovation safeguarded.
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