Coinbase’s Policy Chief: ‘We Have the Most Pro-Crypto Congress Ever’

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As a seasoned analyst with years of experience navigating the complex world of financial regulations and digital assets, I find Faryar Shirzad’s optimism about crypto legislation under the next U.S. administration quite plausible. The proposed bills, FIT21 and the Clarity for Payment Stablecoins Act of 2024, if passed, could indeed bring much-needed clarity to an industry that has been grappling with regulatory uncertainty.

In a chat with CNBC, Faryar Shirzad, who serves as the Chief Policy Officer at Coinbase, expressed his positive viewpoint on the future of cryptocurrency regulation within the United States.

Shirzad expressed his belief that crypto legislation might be swiftly approved by the U.S. Congress, particularly since both houses are currently under Republican control, following Donald Trump’s presidency.

He told CNBC at a crypto event in London last week:

With a highly supportive Congress for cryptocurrency, and a pro-crypto president soon to take office, it seems that the rights and opinions of the approximately 50 million American crypto owners will at last be acknowledged and addressed in policy matters.

Two pieces of crypto legislation that Shirzad was presumably talking about are the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Clarity for Payment Stablecoins Act of 2024.

The legislative initiative known as FIT21 is a substantial attempt at establishing a unified legal structure for digital assets within the United States. This bill, which was passed by the U.S. House of Representatives on May 22, aims to clarify the roles of two key regulatory bodies: the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Specifically, it outlines their responsibilities with regard to digital commodities and securities respectively.

This legislation requires digital asset intermediaries such as brokers, dealers, and platforms to register with either the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC), based on their categorization, and comply with certain disclosure standards. Moreover, it sets up a joint advisory panel between the SEC and CFTC to provide guidance for digital asset regulation. However, the bill, known as FIT21, encounters obstacles in the Senate, mainly due to resistance from the Biden administration, which contends that it lacks sufficient protections for consumers.

The Clarity for Payment Stablecoins Act of 2024, proposed by Senator Bill Hagerty, aims to set clear rules for the regulation of fiat-backed stablecoins. This bill suggests that stablecoin providers must hold real assets equal in value to their digital currencies (1:1 ratio), ensuring transparency and market stability. It differentiates between smaller issuers, who can function under state laws if they issue less than $10 billion in stablecoins, and larger issuers, who need federal supervision.

This legislation delegates regulatory duties to various government bodies: the Federal Reserve takes charge of bank entities that issue stablecoins, while non-bank issuers come under the control of the Office of the Comptroller of the Currency (OCC). Additionally, it requires monthly disclosures of reserves by issuers to promote transparency and shield consumers by maintaining separate accounts for their funds and those of the issuer. Stakeholders are currently providing feedback on this proposal, suggesting ongoing negotiations about its specifics before potential passage into law.

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2024-12-02 21:31