Yellen’s call for ‘responsible’ crypto-innovation is right

Pennsylvania Congressman Glen Thompson has offered a thoughtful and well-articulated plan for “cryptocurrency regulation,” consistent with the U.S. Treasury Department’s proposal.

Janet Yellen, who recently spoke at American University, made some scientific and thought-provoking remarks about the right approach to currency and digital asset regulation, innovation, and the policies surrounding them.

The US Treasury Secretary noted the industry’s explosive growth from $ 14 billion to $ 3 trillion in just five years and its origins, even citing the original Bitcoin White Paper solution to prevent the same digital assets from being used twice, a major criticism of systems , which precedes Bitcoin.

Yellen said: “The role of government should be to ensure responsible innovation – innovation that works for all Americans, protects our national security interests and our planet and contributes to our economic competitiveness and growth. Such responsible innovation must reflect a thoughtful public-private dialogue and “Consider the many experiences we have learned throughout our economic history. This kind of pragmatism has served us well in the past, and I think that is the right approach today.”

Adelle Nazarian is the CEO of the US Blockchain PAC, which protects blockchain innovation and digital assets in the US and opposes legislation restricting the growth of cryptocurrency assets.

In a recent interview with the Huffington Post on cryptocurrency legislation, I observed that we need new rules, languages, and a more resilient framework for initial coin offerings (ICOs) that are compatible with Anti-Money Laundering (AML) and Know Your Customer (KYC) rules that will allow innovation to continue to flourish.

The U.S. Blockchain PAC, which I lead as CEO, welcomed Secretary Yellen’s strong guidance on a process to develop a legal and regulatory framework to protect the public while creating an environment conducive to innovation. As it happens, rep. Glen “GT” Thompson (R-Pa.) Moved this process significantly forward by offering a thoughtful and well-articulated “crypto-regulatory plan.”

The “Thompson Principles” provide a framework for digital commodity exchanges, voluntary registration and qualified depots of digital commodities. They also offer an enhanced process for creating digital products; ensure full accounting of stablecoin assets and liabilities; to protect customers using stablecoins and register users of digital asset-backed products. They would comply with and apply to pre-sold digital products.

These proposals follow the process prescribed by Secretary Yellen. Let us take the example of the proposed voluntary registration:

Trading places would choose [Commodity Futures Trading Commission] Digital commodity exchange regime or remains regulated under issuer licenses for individual state funds. Trading platforms will be encouraged to opt for CFTC regulation to reduce their regulatory burdens by facing only one regulator, being eligible to offer geared trading and being the starting point for new digital products to the retail public. »

According to the Congressional Research Service, 49 states require registration as money senders. It takes millions of dollars and years of work through bureaucratic mazes followed by cumbersome and ongoing compliance requirements to make it a reality. This process is unaffordable for most start-ups and reduces innovation without providing significant additional public protection. Allowing businesses to choose “one-stop shopping” respects Secretary Yellen’s advice on pragmatism.

Congress and the financial services industry finally understand that cryptocurrency is not just another extraordinary popular illusion or the result of mob insanity. The blockchain (from which cryptocurrencies are made) is fundamental to many important new technologies such as non-fungible tokens, Web 3 and metaverse.

And President Joe Biden’s Declaration on “Ensuring the Responsible Development of Digital Assets” calls for risk reduction, while acknowledging that “the United States has an interest in ensuring that it remains at the forefront of responsible development and design of digital assets and the technology that supports new forms of payments and capital flows in the international financial system.… »

The White House, the Secretary of the Treasury and members of Congress, including Representative Thompson and the Presidents of the Congressional Blockchain Caucus – Representatives Bill Foster (D-Ill.), Darren Soto (D-Fla.), Peter Schweikert (R-Arizona) and Tom Emmer ( R-Minn.) – are representatives of the booming distributed ledger industry, as well as the US Blockchain PAC.

The decisions of the public-private dialogue praised by Secretary Yellen have already been met. It is time for all these parties to meet in the secretary’s meeting room.

Such a conversation would promote President Biden and Minister Yellen’s respect for public safety, keep America at the forefront of responsible development, and shape the future of digital assets and technology.

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