Coinbase Founder and CEO Brian Armstrong will attend Consensus 2019 at the Hilton Midtown in New York City on May 15, 2019.
Steven Ferdman | Getty Images
Coinbase said the US should create a new regulator to oversee digital asset markets as part of a new proposal for a directive released Thursday. She warned that inadequate regulation could leave the country even further behind the curve.
The proposal comes a day after one of its investors, venture capital firm Andreessen Horowitz, released its own vision for regulating next-generation internet services, including blockchain and digital assets. A16z executives, as it is known, planned to meet with executives across the government this week.
Coinbase’s vision overlaps with Andreessen Horowitz’s, but includes some nuanced differences and is more focused on digital assets. While a16z advocated collaboration between regulators, Coinbase said in its policy report that there should be only one regulator for the digital asset markets.
Coinbase’s chief policy officer, Faryar Shirzad, told CNBC that his team was intentionally devising a bold plan to spark discussion.
“We started where a lot of people start, which is to take the existing plethora of regulators and figure out what minimal operations you can do to make things work,” said Shirzad. “And then there was a point where we just looked at each other maybe three or four weeks ago and said that it would take more effort to try to adapt the current system, which is based on an old market structure – more intellectual I would say effort – than starting from scratch. “
He admitted that setting up a new agency was certainly not the “least opposition” route, but said it wanted to initiate a broader discussion.
“I end up thinking what we thought because our proposal is just the beginning of a conversation that it made sense for us not to compromise on the key issues that we think people, the policymakers, should be thinking,” said he said on a previous call to reporters.
Shirzad said in the earlier call that the company had already met with about three dozen lawmaking offices as well as several agencies to discuss aspects of the proposal. He said feedback from Capitol Hill so far has been “welcome”.
In general, Coinbase said in the policy report that it wants a “clear and comprehensive approach to digital asset regulation and appropriate regulation”. It said regulation needs to recognize how technology can benefit the public and warned that the US is already “behind” other governments in creating comprehensive regulations for digital assets.
“Unless similar steps are taken,” wrote Coinbase, referring to the “unified approach” to digital assets by the UK, the European Union and Signapore, “the United States risks becoming opposed to the primary ‘regulators’ . Shaper “modern financial services – a position the United States has long held.”
The company divided its proposals into four main pillars:
- Create a new framework for regulating digital assets that is separate from the traditional financial system.
- Transfer responsibility for regulating digital markets to a new single federal agency in addition to a nongovernmental self-regulatory organization similar to that which exists in traditional markets.
- Protect digital asset owners from fraud and market manipulation and require disclosures to promote transparency.
- Promote fair competition and interoperability between products.
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