Coinbase has called upon the U.S. Congress to grant the Commodity Futures Trading Commission (CFTC) sole jurisdiction of the crypto spot markets.
If enacted, the action would cut the SEC’s role significantly in the crypto market. In a two-page document calling for immediate legislation, Coinbase’s Chief Policy Officer, Faryar Shirzad, introduces the vision.
The proposal also reinforces the need for clarification of the regulator. Shirzad emphasized that blockchain technology can deliver paradigmatic financial inclusion and economic opportunities.
However, the absence of well-defined regulations within the U.S. has suppressed innovation while leaving consumers vulnerable to danger. Coinbase is of the opinion that the U.S. Congress is uniquely positioned to develop a paradigm that harmonizes innovation with protection of the consumer.
The key priority of the proposal is to provide the CFTC with the responsibility of overseeing the crypto spot market. It would make the CFTC the central regulator of Bitcoin and Ethereum, among other commodities. Shirzad also urged the establishment of definitive digital asset definitions to separate the token status of being a security or a commodity to avoid confusion.
Another major focus is on stablecoins. Coinbase suggests legislation ensuring stablecoins remain fully backed and transparent, fostering trust while promoting competition. It also highlighted DeFi and digital commerce platforms like NFTs as critical areas that need protection from overregulation.
Coinbase advocates for developers’ rights
The proposal advocates that the rights of the developers are to develop decentralized systems without unnecessary restrictions. Shirzad believed that the innovators need legal certainty to operate and to introduce blockchain ventures to the market within the U.S. Congress also needs to have definitive SEC guidelines to raise the fundraising to avoid blockchain ventures being wrongly labeled as securities.
Coinbase’s stance is a sign of increasing irritation within the industry with the SEC’s actions. Multiple crypto companies have grumbled about vague rules and enforcement actions that impede innovation. Coinbase thinks a well-balanced framework can improve the confidence of the investors, promote growth, and preserve the U.S.’s lead within the international crypto market.
According to Coinbase, time is of the essence. If no action is made, the U.S. will lose its head start as crypto-hostile jurisdictions are flooded by companies and developers. With the CFTC green-lighting the spot market while giving transparent rules, Congress can lead the way to a prosperous digital economy.
