The president of Web3 investment firm CoinFund is the latest to urge lawmakers to pass crypto laws that encourage sector growth, noting that potential legislation around stablecoins — which he said could come first — presents a big opportunity.
Chris Perkins of the CFTC Global Markets Advisory Committee also highlighted a proposal made by SEC commissioner Hester Peirce years ago to encourage crypto entrepreneurs to build more decentralized networks.
Perkins also added that the legislation should be at the core of any digital financial policy in the whitepaper. In an email, he told Blockworks that he was not combative in supporting nuanced regulation for the digital financial sector.
“At a time when regulation seems unclear at best to industry practitioners, we hope to lend our expertise to help drive clarity and the principles-based outcomes that are imperative to catalyze responsible innovation,” Perkins explained.
As regulators have focused on this space, they are not shying away from enforcement.
CoinFund’s president, John McKinney was appointed in January to the CFTC Global Markets Advisory Committee. This group was formed in 1998 as a way to provide advice on issues affecting the competitiveness of US firms and markets abroad.
Support for SEC commissioner’s proposal
Perkins also calls on lawmakers to give priority to sandboxes, safe harbors and similar programs. This proposal is similar in nature from Peirce.
Peirce’s so-called “token safe harbor proposal” looks to give network developers a three-year grace period during which they could participate in or develop a decentralized network — all while exempted from the registration provisions of federal securities laws.
“Experimentation, exploration and, at times, failure are important components of innovation,” Perkins tells Blockworks. “Entrepreneurs should be encouraged to innovate thoughtfully without fear of regulatory reprisal. Sandboxes allow this to happen.”
Peirce published an updated version of the proposal on GitHub, a web hosting service in April 2021.
The update was made just days before Gary Gensler was sworn in as chair of the SEC — “the perfect time for the commission to consider afresh how our rules can be modified to accommodate this new technology in a responsible manner,” She said it in a press release at the time.
Status of the proposal remains unclear. Unable to respond immediately, a spokesperson for the Commissioner did not return an inquiry for comments.
Which legislation would be first to come?
Many industry participants have called for a heightened regulatory approach “regulation by enforcement” Both parties’ lawmakers have stated that the focus of crypto law is on near-term.
Legislation should be based on core principles such as client asset protections, disclosures, cost-efficiency and privacy, Perkins asserts in the white paper — adding it should be clear and predictable and rather straightforward to comply with.
Decentralized technologies, however, should not be subject to regulation, according to him.
Perkins, Blockworks’ Perkins, told Blockworks that the regulation of stablecoins could be next. The draft legislation was released by lawmakers last week. They are still working on the disagreements.
After Gensler’s oversight hearing at the House Financial Services Committee, Wednesday saw the House Subcommittee on Digital Assets meet.
French Hill, R.-Ark. Subcommittee chair, called on the ongoing “turf war” Between the CFTC & SEC is unhelpful & unsustainable.
Perkins added that the regulators’ jurisdiction should not be a factor. “the same principles are advanced with processes that are nuanced and evolve with technology.” On Wednesday, he called the meeting. “a positive step forward.”
“At a time when adversaries are working to displace the dollar, stablecoins can further solidify the US dollar as the global reserve currency, while delivering utility, reducing costs, mitigating risk and driving demand for government debt,” He said. “I remain hopeful that our policymakers will recognize this opportunity.”
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
