While the US has long been known as a hub for innovation and new technology, the nation's regulatory bodies seem at a loss for what to make of the cryptocurrency industry. The United States is lagging behind countries in Europe and Asia in setting crypto regulations, and it's not because the industry is broadly resilient. In fact, crypto experts would appreciate, and are asking for, clear and consistent guidelines.
Still, one of the benefits of being late to the party is being able to learn from what works in regions that have moved on. Next, 11 members of Cointelegraph Circle of Innovation discuss some of the most important things US regulators can learn from actions taken in other countries as they begin to establish cryptocurrency laws and guidelines.
Accept cryptocurrencies as a genuine good
The regulatory moves in the crypto fields in Indonesia and Turkey should serve as a lesson for US regulators. Innovation and investor safety are promoted by the acceptance of cryptocurrencies by other countries as a genuine asset when there are clear regulations and consumer protection. The goal is to adopt a balanced strategy while focusing on the adoption of the digital economy. – Myrtle Anne Ramos, lock tides
Consider a "sandbox" approach
US regulators can learn from the "sandbox" approach seen abroad, particularly in the UK and Singapore. Sandboxes allow companies to test innovative fintech and blockchain products live but with regulatory leniency. This model drives innovation while guiding future regulation, striking a balance between growth and stability. – Maksym Ilyashenko, My NFT Wars: Rift Guardians
Focus on the dissemination of information.
Ask yourself why the Securities and Exchange Commission was created in the first place. It was made in the 1930s, before the internet, as an information resource and recourse mechanism to counter bad guys raising capital for scams. Today, some jurisdictions are rightly focusing on disseminating information about potential new token sales and projects to lessen risk and create investor protections. – Jag Deep Sidhu, syscoin foundation
Recognize cryptocurrencies as a different asset class
The older rules were created for the operation of old economy assets and impede the innovation and growth of a new economy. Recognize cryptocurrencies as a different asset class and establish new regulations, guidance and clarifications to help innovation and invention thrive. Technology cannot be reinvented: it must be well understood and an environment must be created to thrive. – Nitin Kumar, z-blocks
Take a balanced and innovation-friendly approach
US regulators can learn from the UK's Web3 regulatory actions by taking a balanced and pro-innovation approach. The UK framework, highlighted by the Financial Conduct Authority's Regulatory Sandbox programme, promotes experimentation, consumer protection and supervision. By fostering an environment that is supportive of new businesses and emerging technologies, US regulators can promote innovation and address risks in the Web3 ecosystem. – Vinita Rathi, systango
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Develop a transparent set of rules
Make regulations as transparent as possible. European Web3 hotspots like Switzerland and Liechtenstein have seen an influx of investment due to their clear regulatory frameworks. Instead of interpreting the law on a case-by-case basis, US authorities need to realize that having a transparent set of rules is the best way to support blockchain innovation while protecting against bad actors. – Wolfgang Ruckerl, ENT Technologies AG
Consider the EU MiCA
Despite embracing cryptocurrencies, the US has yet to come up with a concrete legal framework that adequately addresses the digital asset class. Regulators could consider the recent Markets in the vote on the Cryptocurrency Law, which defined terms and set expectations for merchants, businesses, and builders operating within its borders. Until a similar consensus is reached in the US, participants risk being left in the dark. – Oleksandr Lutskevych, CEX.IO
Ensure that new legislation serves the needs of society.
Regulation by enforcement rather than legislation is a bad idea. Laws must be in place to serve the needs of society, not the other way around. If we are simply following laws that don't make sense, those laws should be repealed immediately. Obviously, other countries have made their peace with cryptocurrencies. Only the United States has not. – Zain Jaffer, zain companies
Make sure regulators don't issue conflicting guidance
Communication is key! US regulators, including the SEC, Commodity Futures Trading Commission, Federal Trade Commission, and Treasury, add to the confusion by contradicting each other. The Monetary Authority of Singapore works as a proxy, communicating with regulators and creating consistency for all. The US must spend time and effort communicating with all regulators to reduce chaos, protect investors and the public, and nurture the market. – Hugo Lee, haru invest
Do not be afraid that the creation of regulations will push cryptocurrencies abroad
US regulators need to realize that regulation will not drive innovation abroad; it will actually foster technological advances in space. Projects need clear guidelines to abide by. It is the fear of reprisals without warning that drives projects away. – antonio georgiades, pastel net
Start now
The speed of communication is of paramount importance. As we have seen, the communication and regulation lag is preventing many innovators from moving forward with the growth and development of blockchain-related businesses in the US, giving other regions an advantage. – megan nyvold, BingX
This article was published via the Cointelegraph Innovation Circle, a vetted organization of top executives and industry experts in blockchain technology who are building the future through the power of connections, collaboration, and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.
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