Crypto Doesn't Need a Whole New Set of Laws
For nearly eight years, Congress has been trying to create special rules for digital assets and their markets. Despite industry lobbying, a bill known as the Clarity Act failed this month due to conflicts of interest among federal officials.
The crypto industry had hoped for a new legal framework that would allow blockchain-based tokens and business models to grow more easily. However, it's worth asking whether these rules were truly necessary.
Many see the industry's value as providing familiar financial services like loans, payments, and securities trading with real advantages such as instant trade settlement and automated interest payments. Industry leaders argue that existing regulations are incompatible with crypto technology, but some experts disagree.
Digital-asset startups have been granted banking charters and broker-dealer licenses, while traditional banks are rewiring their businesses to incorporate blockchain capabilities. The SEC and CFTC can provide limited exemptions or regulatory sandboxes for innovative products and services.
Congress should focus on providing regulators with the resources they need to supervise these new business models rather than creating a special set of rules for crypto. Industry leaders like Michael Saylor, a Bitcoin evangelist, recommend showing the public that crypto can provide useful products at lower costs.