Friday, January 22, 2021

No new regulator needs better crypto control – Kindesk

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Most crypto companies have complained that there are a large number of regulators around the world, and especially in the United States, and have protested against the growth and innovation of these overlapping and even reverse control systems. The “Alphabet Soup” of the U.S. regulatory agencies – SEC, CFTC, DOJ, FDIC, FTC and IRS, to name a few – is just the beginning.

At the state level, 50 attorney generals oppose them, not to mention the various state agencies and regulators that enact countless laws approved by the state legislature and enforced by the courts. Digital currencies have no boundaries and regulators can increase their regulatory reach if they influence the market, consumers and organizations in their jurisdiction.

Donna Parasi is the global head of financial services and fintech at the legal firm Shearman & Sterling. Sandra Rowe is a former derivatives banker and market infrastructure executive and CEO of the Global Blockchain Business Council, the next multi-trillion dollar non-profit building industry through a Swiss industry partnership, education and Okaz.

Some crypto startups and fintech leaders have suggested a new regulatory body that would allow regulators to overcome this myriad controls as a way to facilitate regulatory compliance and reduce overlap between competing firms. The Financial Conduct Authority (FCA) in the United Kingdom is often cited as an example of a central superseding agency that recognizes and promotes innovation through its policies, and many even support a parallel agency in the United States, with some Fintech leaders even Threatened to leave the entire United States, And transfer to a friendly regulatory system in the UK or elsewhere.

No question, navigating the matrix of federal and state regulations is painful and costly even for young crypto startups and even mature fintechs. But despite the seemingly chaotic and burdensome regulatory structure, the U.S. system provides confidence to both investors and consumers.

This method of controlling digital assets allows innovation to develop by preventing fraud, unhealthy speculation and asset bubbles. In order to innovate and stay competitive with other international markets, U.S. regulators need to reduce “gray areas” so that more fintech and entrepreneurs can clearly navigate the rules of the road. The problem is not so much regulation in the United States but this lack of clarity and overlapping rules.

Many U.S. regulatory bodies are the beasts of different laws that were passed in response to various national crises – the Civil War, securities and financial institutions were inseparable from developing a national banking system to finance a regulatory (OCC) Office Exchange Commission (SEC) and federal The Deposit Insurance Commission (FDIC) was established in the wake of the Great Depression, and the Financial Stability Monitoring Council was part of the reform under the Dodd-Frank Act. Inherited formulas that are a complex regulatory landscape of many regulatory and statutory orders. For example, the SEC and the Bureau of Consumer Financial Protection (CFPB) are primarily responsible for investor and consumer protection, with U.S. federal banking agencies focusing on the security and stability of banking institutions and the stability of the financial system itself.

Despite the seemingly chaotic and burdensome regulatory structure, the U.S. system provides confidence to both investors and consumers.

Bank regulators in 49 states have unveiled a plan Facilitate the flow of compliance testing of the Financial Services Business (MSB). This will save time and money for both agencies and regulators and makes it easier for MSBs to do business in the United States This model of a collaborative approach provides a roadmap for more effective and more efficient regulation across the United States. Applying this same collaborative attitude to other areas, such as the KYC process, raising capital and passport licensing, similarly reduces deficits and provides startups with complimentary, non-stop and less expensive ways to do business. A collaborative approach also makes it more likely that the political climate will change, for example, avoiding biased squabbling that disrupts the work of the CFPB.

We don’t need new super-regulators for digital currency. Instead, we need to improve communication and collaboration between regulators, entrepreneurs, investors and banks. Doing so will strengthen oversight, protect consumers, maintain market integrity and, most importantly, lead to a financial system that is better equipped to meet future challenges.



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