Coinbase CEO Brian Armstrong expressed his disappointment over the regulatory approach of the US lawmakers towards cryptocurrency. He warned that innovation is shifting to other countries, and restrictive US cryptocurrency policies will benefit countries like China.
The Effect of Restrictive Policies on Crypto-Innovation
Armstrong wrote in a MarketWatch opinion article that the enforcement of restrictive policies is driving crypto-innovation offshore. He added that this shift would compromise America’s legacy of groundbreaking technological advancements and weaken the country’s national security posture.
China’s Digital Yuan
Armstrong expressed concern over China’s digital yuan, which has processed over $14 billion worth of transactions to date. He warned that the recent launch of China’s digital yuan aims to challenge the US dollar and its role in global commerce. He also noted that Chinese financial service providers would soon allow citizens to pay for wealth products using the digital yuan.
The Global Trend of Central Bank Digital Currencies (CBDCs)
Eleven countries have launched a Central Bank Digital Currency (CBDC), including the Bahamas and Nigeria, according to the Atlantic Council, which tracks CBDCs in 120 countries. Armstrong warned that the US’s slow approach to CBDCs could cause the country to fall behind in the global trend.
Coinbase’s TV Campaign and Ongoing Feud with US Regulator
Coinbase has launched a TV campaign promoting the future of cryptocurrency, emphasizing that it is not going anywhere. However, the company is facing an ongoing feud with a US regulator after receiving a Wells notice in March over some of its products. The notice means that the US Securities and Exchange Commission is ready to recommend formal charges to its five-member commission.
SEC Chair Gary Gensler has called on exchanges to register and recently stated that they tend to be “rife with conflicts.” Although lawmakers in the nation’s capital are working on bills to regulate cryptocurrency, it remains to be seen what bills will come to fruition.
Armstrong emphasized that the US needs to approach cryptocurrency regulations carefully and create a clear regulatory framework to attract innovation and prevent the country from falling behind in the global trend of CBDCs.