A list of regulatory directions has been proposed by Coinbase, which is a portion of the DAPP (Digital-Asset-Policy-Proposal). In the very proposal, it has been demanded by the exchange that there should be a regulatory certainty to be availed by everyone. The exchange called it the most broad-based and dynamic period of innovation in American finance.
The things being proposed
Behind the vast-level adoption of cryptocurrency and a great extent of uncertainty in the regulation across the crypto space, an approach consisting of four pillars has been outlined by the exchange by which it intends to bring better regulation to the world of cryptocurrency. Initially, the exchange has demanded the regulation of digital assets through a unique framework. After that, it has been recommended that a single regulator should be designated for the management of the virtual asset markets. Additionally, Coinbase has proposed that the empowerment and protection of the asset holders should be given prime importance. Moreover, the exchange has endorsed the regulators to propagate fair competition as well as the interoperability being prevailed in the sector.
The reason behind the proposal
As per Coinbase, the 1930’s drafted laws which were designed to assist the efficient observation of the financial system were not strong enough to have an appropriate implication over the contemporary technological revolution. Although the proposal targets to provide good-faith recommendations, it comes during a sequence of crackdowns by the U.S. SEC. During the recent month, the exchange terminated the launch of the Lend product thereof as the Securities Department threatened to file a lawsuit to prosecute it because, according to it, the product was an interest-bearing kind of security.
The securities’ definition has been legally a very contentious topic along with being the heart of the lawsuit between the SEC and Ripple. Thus, the prominent concept in the proposal is to incorporate evolution into the present frameworks. Although Coinbase has a status of a public and legal entity in the United States, various regulations such as the U.S. BSA (Bank-Secrecy-Act), the difficulties emerge when multiple regulators such as the U.S. Treasury Department, the CFTC (Commodities-Futures-Trading-Commission), Federal Reserve, and SEC (Securities-and-Exchange-Commission) become simultaneously involved in the regulation. While admitting the risks being faced by the crypto sector, the exchange has also required an enhanced safeguard against fraud, increased clarity, and further development in the sector of cryptocurrency to allow for fair competition in the future.