Coinbase’s Legislative Priorities for Crypto Law Reform

Coinbase outlined six key priorities to address flaws in US crypto regulation. Through its chief policy officer, Faryar Shirzad, the largest US-based exchange urged Congress to act swiftly to provide clear and consistent rules for the industry.

This adds to Coinbase’s pro-crypto campaigns, which include fighting legal battles to expose regulatory misconduct and advocating for clear and consistent crypto banking rules.

Key Priorities

Faryar Shirzad detailed these priorities in a blog post. He emphasized the need for a balanced approach to innovation and consumer protection, warning that the lack of a clear legal framework leaves US innovation at risk and consumers vulnerable to fraud.

1. Define Digital Assets: Clearly define digital assets to distinguish between securities, commodities, and other tokens, ensuring investor protection and market integrity.
2. CFTC Authority: Grant the Commodity Futures Trading Commission (CFTC) authority over crypto spot markets, aligning with a lighter regulatory touch amid policy shifts.
3. Capital-Raising Rules: Establish clear guidelines for blockchain fundraising without classifying every token as a security.
4. Stablecoin Regulations: Implement regulations to ensure stablecoins are fully backed and subject to oversight.
5. Protect DeFi and NFTs: Ensure DeFi platforms and NFTs remain free from excessive regulation to encourage innovation.
6. Clarity for Centralized Entities: Provide clear federal or state-level guidelines for exchanges and custodians for accountability.

Shirzad emphasized that without legislative action, the US risks falling behind in blockchain innovation, leading to possible offshore relocation of developers and businesses. Inaction could leave consumers unprotected and hinder America’s leadership in the digital economy.

Coinbase urges lawmakers to create a regulatory framework that balances innovation with consumer protection, aligning with the exchange’s predictions for a favorable regulatory environment that could drive market growth by 2025. The company has been active in legal battles against regulatory overreach, including taking on the FDIC and reinforcing its commitment to fair regulatory practices through testimonies before Congress.