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- Brian Armstrong enlightened about crypto staking’s vitality for the industry
- Banning crypto staking for retail investors has stayed a rumor until now
Crypto regulations remain a burning issue and are liable to grow along with the burgeoning asset class that tends to expand. Both opponents and proponents of the notion of regulating the crypto industry have their arguments. Though the experts believe regulating the burgeoning class is crucial, it should not stifle its growth. Coinbase CEO recently showcased similar concerns pointing out the rumors of US financial watchdog taking action against crypto staking.
Armstrong’s Twitter Thread Shows Concern
Chief executing the office of leading US crypto exchange Coinbase, Brian Armstrong went on to Twitter on Thursday, February 9. He noted hearing rumors that the United States Securities and Exchange Commission is likely to sanction retail investors’ exposure to crypto staking to “get rid of crypto staking in the US for retail customers.”
By the time of writing, there is no confirmation from the financial regulator, though Armstrong hopes it should not be the case. He believes that if done, “it would be a terrible path for the US.”
The common concern of many financial regulators worldwide is that the cryptocurrency-born idea of decentralized finance and crypto poses a threat to the traditional financial system hence needing regulations. In contrast, proponents used to think of regulations likely to stifle the market’s growth in its nascent phase. Amidst the discussion, the ideal way would be to consider all the concerns and ensure the growth of innovation, ending up making the systems better and smoother.
According to Armstrong, developing financial services and Web3 technology in the United States is the subject of national security. There is a need to ensure the promotion and growth of new technologies in the country and that innovation should not be “stifled by the lack of clear rules.”
No Recent Take of the Financial Regulator
Recently there has been no indication of putting crypto staking under any regulation from the SEC. The last statement over the same was from September 2022, when SEC Chair Garry Gensler made a statement. He indicated at the time to classify the cryptocurrencies offering staking as securities according to the Howey test. This would apply to crypto assets, although Commodity Futures Trading Commission (CFTC) would have considered some a commodity. However, Gensler later clarified that he was not referring to any particular asset.
In the Twitter thread, Coinbase CEO further explained the importance of staking as an innovation as it allows users’ direct participation in “running open crypto networks.” He argues that the crypto industry can have positive efficacies due to staking from bringing scalability and security to the reduction in carbon footprints.
Citing the example of crypto exchange FTX, he argued that forced regulation does not work as it makes companies bring their operations offshore.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
