Congress Wants Cryptos Regulated
The United States government is factoring cryptocurrencies into its future.
Members of Congress have reached out to Jay Clayton, the chairman of the U.S. Securities and Exchange Commission (SEC).
Fifteen Congress members wrote to Clayton asking for a proper, clear statement on the SEC’s stance on cryptocurrencies and other digital assets.
In the letter to the SEC, lawmakers requested a few things. First, Clayton was asked to provide clear guidelines on which digital tokens can be considered securities and which can’t.
Currently, the SEC labels most cryptos as securities, which means they’re under the same rules as stocks. Ether and Bitcoin are labeled as commodities, however.
Clayton has mentioned that the SEC will not change those labels but can provide more clarity on their existing guidelines.
Second, Congress wants Clayton to lay down the groundwork for crystal-clear regulations on cryptos.
Currently, the SEC has uncertain guidelines on cryptos, which is affecting how blockchain companies operate in the U.S. Also, the average American investing in cryptos has reservations, not wanting to break any laws and regulations.
The letter to Clayton was likely brought on as a result of a recent meeting between lawmakers, members of Wall Street, and the cryptocurrency market that lasted several hours. During the meeting, over 50 members of the industry pleaded for cryptocurrency regulations.
Mike Lempres, Coinbase’s CPO, was at the meeting and had this to say about regulation in the cryptocurrency industry:
We all want a fair and orderly markets, we want all the same things regulators do.
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What Does This Mean?
Congress wants a clear statement on cryptos from the SEC because it’s worried about falling behind other countries.
You see, the U.S. doesn’t want capital stemming from cryptos to migrate to other parts of the globe that embrace cryptos and blockchain technology.
During the meeting with lawmakers, members of Wall Street, and crypto leaders, there was anxiety that a lack of regulation would make the U.S. unappealing for blockchain companies to operate in.
Cryptocurrencies are not tied down by government, so companies have plenty of freedom to choose where they want to set up shop.
They’d most likely choose a location that is not only friendly to cryptos but also has clear guidelines and regulations surrounding them.
Take Malta, for example. The country is very welcoming and accommodating to cryptocurrencies and blockchain technology. Even Malta’s prime minister, Joseph Muscat, has put faith in cryptos and blockchain technologies. When Binance set up shop on the island in early 2018, Muscat personally welcomed the company.
BitBay is also planning to operate in Malta.
On September 27, 2018, Muscat declared to the United Nations that cryptocurrency and blockchains are “the inevitable future of money.” He added that if adopted and regulated, the technologies could “do so much more” for society.
It’s no shocker that the small European island is now known as Blockchain Island.
If Clayton meets Congress’s request, companies and innovators could favor operating in the U.S., since there would be clearer legalities surrounding cryptos and blockchain technology.
That would keep capital within the country, while also helping the U.S. become a global leader in crypto and blockchain.
Whatever Clayton decides to do, cryptocurrencies will still perform in their niche. The only difference would be the U.S.’s level of involvement.
John Butler, Jr.
Contributing Editor, The Token Authority