Downgraded

A brief dive into the major crypto policy actors in the US.

Aug 05, 2023

Weekly musing: regulation as an opportunity.

As BTC hovers below $30k for another week, with a possible test of $27k later in August, let’s put the markets aside and talk about crypto regulation. In particular, let’s understand the key US regulators and legal actors - because they do influence prices.

Back in 2018, Jake Chervinsky was right. But in 2023 we must add congressional committees to the plethora of major US regulators following the demise of Terra, Celsius and FTX. And, internationally, we can’t forget the US-dominated FATF.

Everything starts with the SEC, the Securities and Exchanges Commission. This migthy agency oversees securities markets, exchanges and even funds. Recently it tried to control all of crypto except BTC, but the move is clearly backfiring.

That’s because the CTFC is trying to get jurisdiction over all of crypto spot trading, adding to its current control of crypto derivatives, thus becoming the principal regulator over the space and bringing some much-needed clarity with it.

The issue is that there’s no strategic policy to regulate the new digital economy, hence all the in-fighting. While in Europe there’s MiCA, a comprehensive framework, the US is only now starting to discuss how to better approach it.

Enter Congress and its committees, scrambling to keep the USA relevant within the ever-more global crypto ecosystem - given the constant attacks from regulators and certain politicians who insist on misunderstanding technology.

And it’s not only this Financial Innovation and Technology for the 21st Century Act that is moving towards a floor vote, but also the Clarity for Payment Stablecoins Act and the Blockchain Regulatory Certainty Act. Isn’t it great news?

I believe so, as crypto’s impact will be significantly larger once there’s regulatory clarity around it. And even if you prefer a more marginal crypto economy, at least it’s clear that this ambiguity harms the US. Has it definitely lost the race, though?

I feel the US still has a fighting chance if it acts decisively and fast. Meanwhile, all countries still need to worry about the FATF and its recommendations. Fighting crime is of the essence, but let’s fight it with technology instead.