Crypto regulations remained the hot topic across the crypto space for a long time now—perhaps went in tandem with its gaining popularity after emergence. There remained many different perspectives from people across the industry regarding the digital assets regulations. Recently CEO of leading crypto exchange Coinbase, Brian Armstrong also put his view over the issue in the wake of FTX collapse.
In a blog post published on 19th December, Coinbase CEO highlighted that centralized entities within crypto could be subjected to stricter regulations. However, he argued that decentralized protocols should be kept out of this and allowed to flourish.
Further he claimed that regulators could help in restoring the trust within the crypto market and then the moving industry would try to cope with the recent collapse of the Bahamian crypto exchange. While he advocated that decentralized platforms should be kept out of the equation.
Armstrong noted, “The role of financial regulators should be limited to centralized actors in cryptocurrency, where additional transparency and disclosure is needed. In an on-chain world, this transparency is built in by default, and we have an opportunity to create even stronger protections.”
In addition, he said “smart contracts, which power DeFi and Web3 apps, are public and open source by default. This means anyone can go audit the code to see if it really does what it claims to do. This is the ultimate form of disclosure.”
In his opinion, the centralized entities need to go through the checks seeking ‘additional transparency and disclosure.’ This is given that such firms consist of human involvement that leaves room for error. The most risk is involved with exchanges, custodians and issuers of stablecoins. They pose the risk of harm to consumers and citing this everyone could agree for regulations, he added.
About the stablecoin issuers, Coinbase CEO has thoughts that they do not need to act as banks if they do not proceed with fractional reserves or make investments in the riskier assets. However they should have to get through the ‘basic cybersecurity standards’ and also work towards establishing a blacklisting procedure.
While talking about Crypto Regulations Regulations exchanges and custodians, Armstrong suggested that a regime of federal licensing and registration should be implemented by regulators. This would enable the exchange firms and custodians to serve the people in compliance with the laws. Making consumer protection rules stronger and keeping the market manipulation like practise were said to along with this.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.