Brian Armstrong, co-founder and CEO of cryptocurrency exchange Coinbase, argues that Crypto should be grouped with commodities and infrastructure essential to the US economy.
The reason for his impassioned plea could be related to the SEC’s recent crackdown on cryptocurrencies, including an investigation into whether Coinbase itself improperly allowed Americans to trade digital assets that should have been registered as securities. “One of the strongest political arguments about cryptocurrencies is that it’s a matter of national security,” he tweeted in an effort to draw renewed attention to the legal gray area cryptocurrencies inhabit.
Armstrong said the industry shouldn’t go the path of microchips, whose advanced processors found in Apple devices are manufactured exclusively in Asia, or the 5G mobile networking equipment dominated by China’s Huawei, Sweden’s Ericsson or Finnish group Nokia.
The US has lost semiconductors and 5G, which are now largely offshore products. They cannot afford to move cryptocurrency overseas as well,” he wrote, adding that this was true for every country.
Over the years, Coinbase and others in the industry have called for institutions to implement specific rules for how securities laws apply to the crypto industry. For years, the SEC has refused to do so, instead using an uneven approach called “regulation by enforcement,” leaving companies to guess what their bodies will do.
Enforcement regulation has a chilling effect and words matter,” Armstrong wrote. “We’ve seen a lot of crypto talent, asset issuers and startups offshore. ”
Coinbase’s CEO might make sense, as many countries would envy the opportunity to attract business from Wall Street. The strength of the dollar depends not only on its role as a global reserve currency, but also on the deep financial markets where it absorbs excess capital from abroad.
The City of London, the only financial district to rival Manhattan, has also struggled to prevent a mass exodus of money or talent as the new government under Prime Minister Liz Truss proposes to lift limits on bankers’ bonuses.
High-paying jobs in financial services are not the only attractive sector that has proven essential not only to economic productivity, but also to help expand the government’s tax base. Governments are also beginning to understand the need for onshore semiconductor manufacturing, as Coinbase’s CEO pointed out.