Crypto Doesn't Need a Special Set of Laws
The latest attempt to create special rules for digital assets and their markets has stalled in Congress.
The Clarity Act, a 635-page bill, collapsed due to an attempt to limit conflicts of interest among federal officials.
Crypto entrepreneurs had lobbied and donated to legislators in hopes of winning a new legal framework for blockchain-based tokens and business models.
The industry's value has risen above $2.8 trillion, with trading turnover in related derivatives contracts reaching nearly $86 trillion last year.
Industry leaders argue that their software can provide real advantages, including instant trade settlement and automated interest payments, but blockchain-based startups struggle to comply with existing regulations.
However, experts point out that digital-asset startups have been granted banking charters, broker-dealer licenses, and even a limited-purpose Federal Reserve master account.
Regulators can work together to provide limited exemptions or regulatory sandboxes for innovative products and services.
Congress should focus on providing regulators with the resources they need to adequately supervise new business models.