US Crypto Developers Are Moving Abroad and Experts Give Their Opinion

The United States has long been a beacon of technological innovation, but in recent years it has witnessed a worrying trend in the cryptocurrency sector.

A combination of strict regulations led by SEC Chairman Gary Gensler and increasing international competition has led to a notable decline in the United States’ share of global crypto development.

Regulatory Hurdles: The Decline of Crypto Innovation in the United States

According to a recent report According to Coinbase, since 2018, the proportion of US-based crypto developers has declined by 26%, highlighting the ongoing challenges the industry faces under the current regulatory framework.

Industry experts including Bill Morgan and Paul Grewal have spoken out on platforms like strict regulatory measures.

Grewal particularly emphasized that maintaining global leadership in technological innovation depends on the U.S. government’s commitment to improving its regulatory approach.

In response to this, Morgan suggests that the actions taken by the SEC, particularly under Gensler’s leadership, have not only stifled innovation, but also discouraged the market as a whole. Morgan note:

I warned you all in March 2021 about what Gensler would do. You all thought that the attack on Ripple and XRP would not affect you. He acted against all cryptography.

Notably, the ripple effect of these US SEC regulations clearly indicates the potential long-term consequences for the United States’ position as a leader in the crypto space.

The push for reform

In response to growing concerns about America’s competitive advantage in technology, there have been recent efforts in legislative circles to adapt and revise regulatory approaches.

While initially opposing bills such as HR 4763 that sought to change digital asset regulations, the Biden administration has expressed a desire to work with Congress develop a balanced and comprehensive regulatory framework.

This framework promotes responsible innovation while ensuring adequate protection of consumers and investors.

Recent legislative actions, including the Senate’s decision to rescind the SEC’s Staff Accounting Bulletin 121 (SAB-121), reflect a growing recognition of need for regulatory reform.

SAB-121, which requires financial institutions to treat crypto assets as liabilities, has been criticized for imposing an unsustainable financial burden on the industry.

The potential passage of the Financial Innovation and Technology for the 21st Century (FIT21) Act further highlights a bipartisan effort to establish a more favorable regulatory environment for cryptocurrencies in the United States.

The value of the global market capitalization of digital currencies on the daily chart. Source: TOTAL market capitalization TradingView.com

Featured image created with DALL-E, chart from TradingView

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