Crypto Regulation In 2018: Hold On!
2018 was touted to be the year of regulation in the crypto space. Some market reports shared the view that the gaze of major countries will be on the industry to make their assessment and proffer ways to clear several issues usually associated with the evolving space. However, not much has been seen realized thus far. A major confirmed event in this direction is the proposed debate on “The Future of Money: Digital Currency” later today (July 18).
Though inconclusive, this Subcommittee on Monetary Policy and Trade one-panel hearing may not achieve much, immediately, but it is going to help bolster the change of tone towards the space and may affect other areas with time. They want to “examine the extent to which the United States government should consider cryptocurrencies as money and the potential domestic and global uses for cryptocurrencies.” They will also evaluate the merits of “any uses by central banks of cryptocurrencies, and discuss the future of both cryptocurrencies and physical cash.”
Discussing these critical issues with the invited witnesses to the event – who are not new to cryptocurencies – will be quite interesting. Dr. Rodney Garratt, a Professor of Economics from the University of California Santa Barbara is an advisor to Blockchain Industries which invests and develops in a broad range of blockchain technologies; while Dr. Norbert Michel, the Director for the Center for Data Analysis, The Heritage Foundation, is an expert on financial regulation who has once called for an evaluuation of what cryptocurrencies can do for the US economy. Dr. Eswar Prasad, a Senior Fellow at The Brookings Institution, has written on how digital currencies like Bitcoin can transform central banking; and Mr. Alex Pollock, a Distinguished Senior Fellow at the R Street Institute, who thinks Bitcoin would be taken over by the government if it becomes a threat to the monetary order.
The outcome of the hearing may have an impact on the SEC’s decision to approve (or not) a pending ETF filing whose outcome is expected the earliest on August 10. So far, over 90 individuals have submitted comments to the SEC – 10 times more than the messages the SEC received for a similar Bitcoin ETF listing back in April.
The hearing today is coming as the Financial Stability Board (FSB) released a report that found Bitcoin and cryptocurrencies as not posing any current risk to the global financial system. Relatively, the CFA Institute which is a global association that has helped train more than 150,000 financial professionals, is adding topics on cryptocurrencies and blockchain to its Level I and II curriculums for the first time next year.
Coinbase has been approved to as one of the first federally-regulated venues for trading digital coins deemed to be securities. It can now let users trade Cardano, Basic Attention Token, Stellar, Zcash and Ox but may not list the tokens. Who knows what may come next?