Coinbase has officially launched its draft regulation for crypto.
It is called dApp, an acronym that stands for Digital Asset Policy Proposal.
Crypto regulation: “It’s not just about Coinbase”
The exchange led by Brian Armstrong has been working for some time to ensure that the US adopts cryptocurrency regulation that contributes to innovation and is not a brake on the industry. This is what dApp will be about.
Brian Armstrong explained via Twitter:
“Today we’re launching our Digital Asset Policy Proposal (dApp) which we hope will help chart a course for clear regulation of cryptocurrency and web 3.0 in the US. It’s critical to bring clarity to this space and ensure America remains a financial leader”.
This is not a project that benefits Coinbase alone, but will benefit the entire industry. The CEO adds in this regard:
“This is not about Coinbase – we completed more than 75 meetings with stakeholders in government, industry, and academia to help shape this proposal, and we feel it represents a consensus point of view. It’s inclusive and democratic by design”.
The point is that the world is changing and innovations must be seen as opportunities. For Brian Armstrong:
“Web3 is upon us, and represents an enormous opportunity for America to not just retain its status as a financial hub, but also to encourage innovation, create jobs, and grow the economy.
We can do this all with sensible regulation that protects consumers and creates a level playing field if we work together”.
The contents of the proposal
Coinbase Chief Policy Officer Faryar Shirzard explains the contents of the draft.
The text is based on two principles:
- The evolution and decentralization of the internet-driven by blockchain;
- The emergence of distinctive, digital-native asset classes with unique economic use cases.
Four pillars are then listed:
- A regulatory framework surrounding digital assets that does not hinder innovation, inclusion and financial empowerment for all sectors of society;
- A single regulator, with authority to register marketplaces for digital assets (MDAs);
- The protection of customers, which can be achieved by focusing on transparency and the information needed before buying digital assets;
- The promotion of interoperability and fair competition. This, according to Coinbase, would protect consumers and developers.
This is obviously a draft, so much so that even Coinbase’s CPO invites those who wish to replicate and give their views. In fact, the draft has also been published on Github where users can interact in their own way.
For Coinbase, this move seemed necessary. The largest exchange in the United States is struggling with several problems related to its relations with the SEC. The Securities and Exchange Commission in recent weeks blocked the launch of Lend, a Coinbase product that would have allowed users to lend and borrow. What shocked the exchange the most is that the SEC never came up with any clear arguments to justify the denial. All that came was a threat of a lawsuit.
With a clear regulatory framework, such episodes can no longer happen in the cryptocurrency industry, or at least will be minimal.