Coinspeaker Coinbase Chief Warns against Crypto Politicization, Calls for Bipartisan Support in Policy
At the recent Bitcoin Nashville Conference, the cryptocurrency community erupted in cheers. Republican candidate Donald Trump pledged to remove Securities and Exchange Commission (SEC) chair Gary Gensler. This pledge highlights a growing trend: crypto is becoming a political football in the US.
However, Paul Grewal, Coinbase Chief Legal Officer, warns against this trend. He advocates for bipartisan support for crypto regulation. “My biggest concern is crypto becoming politicized,” Grewal stressed in an interview at the Asia Blockchain Summit.
He believes this could significantly hinder, or even threaten, its continued growth and development. Grewal emphasized the need for both Democrats and Republicans to work together to modernize outdated regulations.
Outdated Rules Stifling Crypto Growth
One major hurdle in the US is the reliance on antiquated frameworks like the Howey Test, designed in the 1940s to regulate securities offerings. Grewal argues that applying this test “blindly” to the complexities of blockchain technology doesn’t make sense.
“There needs to be an understanding that the Howey Test was developed in the context of an Orange Grove real estate in Florida in the 1940s and 50s,” he explained that crypto assets are fundamentally different, and blindly applying this test stifles innovation.
Grewal advocates for a more nuanced approach, recognizing historical precedent while adapting to new technologies. “Precedents can provide valuable insights,” he said, “but they need to evolve with emerging technologies and economic realities.”
Unlike the US, Asian regulators are taking a more innovative approach. Countries like Hong Kong are crafting crypto regulations from the ground up, incorporating industry feedback. This stands in stark contrast to the US SEC, which has repeatedly denied applications for Bitcoin Exchange-Traded Funds (ETFs) that allow in-kind redemptions (a feature permitted in Hong Kong).
“What’s inspiring about Asia is the focus on practical issues, not ideology,” Grewal observed. “There is an interest in understanding the technology, where the industry is headed, and our experiences…because they want to learn and take the best, while avoiding the worst.”
Bipartisan Vision for Crypto’s Future
While acknowledging the current challenges within the US, Grewal remains optimistic. He sees growing awareness of crypto’s potential across both political parties. “At its core, crypto is code,” he concluded. “There are many other issues where we can disagree, but we should be able to find common ground on how code works and its potential applications.”
Grewal’s call for bipartisan collaboration highlights a crucial step towards establishing a clear and supportive regulatory framework for cryptocurrencies in the US. By moving away from political divides and embracing innovation, the US can position itself as a leader in the future of finance.
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Coinbase Chief Warns against Crypto Politicization, Calls for Bipartisan Support in Policy