While the US has long been known as a center of innovation and new technology, the country’s regulatory authorities don’t seem quite sure what to do with the crypto industry. The US is lagging behind countries in Europe and Asia in implementing crypto regulation, and it is not because the industry is generally resistant. Indeed, crypto insiders would welcome – demand – clear and consistent guidelines.
Still, one benefit of being late to the party is that you can learn from areas that have advanced. Below, 11 Cointelegraph Innovation Circle members discuss some of the most important things US regulators can learn from actions taken in other countries as they begin drafting laws and guidelines for crypto.
Accept cryptocurrency as a real commodity
Cryptocurrency regulatory moves in Indonesia and Turkey should serve as a lesson for US regulators. Innovation and protection for investors is fueled by other countries adopting cryptocurrencies as a real commodity when there are clear regulations and consumer protections. The goal is to pursue a balanced strategy with a focus on the adoption of the digital economy. – Myrtle Anne Ramos, Blocking Tides
consider sandbox approach
Regulators in the US could learn from the “sandbox” approach used abroad, notably in the UK and Singapore. The sandbox allows companies to test innovative fintech and blockchain products, but with regulatory leniency. This model drives innovation and guides future regulation, striking a balance between growth and sustainability. – Maxim Ilyashenko, My NFT Wars: Riftwardence
focus on spreading information
Ask yourself why the Securities and Exchange Commission was created in the first place. This was done in the 1930s, pre-Internet, as an information source and prevention mechanism to combat bad actors raising capital for scams. Today, few jurisdictions rightly focus on disseminating information about potential sales of new tokens and projects in order to mitigate risk and create investor protection. Jagdeep Sidhu, Syscoin Foundation
Recognize crypto as a separate asset class
Outdated rules have been put in place for the assets of the old economy to function, and they hinder innovation and the growth of the new economy. Recognize crypto as a separate asset class and create new regulations, guidelines and clarifications to help innovation and ingenuity flourish. Technology cannot be re-invented – it must be properly understood and created an environment to thrive. – Nitin Kumar, Zblox
Choose a balanced and innovation-friendly approach
US regulators can learn from UK Web3 regulations by taking a balanced and innovation-friendly approach. The UK framework, highlighted by the Financial Conduct Authority’s regulatory sandbox programme, promotes experimentation, consumer protection and oversight. Fostering an environment that supports startups and emerging technologies will help US regulators foster innovation and address risks in the Web3 ecosystem. – Vinita Rathi, Sistango
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Develop a transparent set of rules
Make the rules as transparent as possible. European Web3 hotspots such as Switzerland and Liechtenstein have seen an influx of investment thanks to their clear regulatory frameworks. Instead of interpreting the law on a case-by-case basis, US officials should realize that a transparent set of rules is the best way to support blockchain innovation while protecting against bad actors. – Wolfgang Ruckerl, ENT Technologies AG
Think about the EU’s MICA
Despite embracing crypto, the US has yet to create a solid legal framework that adequately addresses the digital asset class. Regulators may want to consider the recent vote on the EU Markets in Crypto Act, which defines the rules and expectations for traders, companies and builders operating within its borders. Until a similar consensus is reached in the US, participants risk being left in the dark. – Alexander Lutskevich, CEX.IO
Make sure the new law meets the needs of society
Regulation through enforcement rather than legislation is a bad idea. The law should be to meet the needs of the society and not the other way around. If we only follow laws that have no meaning, then those laws should be repealed immediately. It is clear that other countries have made peace with cryptocurrencies. Only America does not have this. -Jain Jaffer, Jain Ventures
Ensure regulatory authorities are not issuing conflicting guidelines
Communication is key! US regulators – including the SEC, the Commodity Futures Trading Commission, the Federal Trade Commission and the Treasury – add to the confusion by contradicting each other. The Monetary Authority of Singapore acts as an agent, communicating with regulators and ensuring stability for all. The US must spend time and effort communicating with all regulators to minimize chaos, protect investors and the public, and feed the market. -Hugo Lee, Haru Invest
Don’t Be Afraid That Regulation Will Promote Crypto Abroad
Regulators in the US need to realize that regulation is not a driver of innovation overseas, but will spur technological progress in the space. Projects need clear guidelines to follow. It is the fear of retaliation without warning that drives away projects. – Anthony Georgiades, Pestle Network
The speed of communication is of utmost importance. As we have seen, the slowdown in communication and regulation has prevented many innovators from moving forward with blockchain-related business growth and development in the US, giving the edge to other regions. -Megan Nivold, BingeX
This article was published via Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connection, collaboration, and thought leadership. The opinions expressed do not necessarily reflect the views of Cointelegraph.
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