US needs to catch up on crypto regulation: Coinbase policy chief

Coinbase (PIECE OF MONEY) will serve as a guardian for many spot Bitcoin ETFs that have been approved by the United States Securities and Exchange Commission last week.

Coinbase Chief Policy Officer Faryar Shirzad speaks with Yahoo Finance Julie Hyman And Brian Sozzi regarding the approval of the annual meeting of the World Economic Forum in Davos, Switzerland.

Shirzad claims that the approval will attract new investors to the crypto community and that this “forms a formal declaration to the SEC that it has blessed an important crypto product.” He goes on to explain that “virtually all G20 economies” have adopted or are in the process of adopting a regulatory framework for crypto, adding that “in some ways the debate in the United States has made the United States less relevant” in regulatory negotiations. .

Watch the video above to learn why Shirzad hopes that one day crypto will be treated like money.

This interview is part of Exclusive coverage from Yahoo Finance of the World Economic Forum in Davos, Switzerland, where our team will speak with high-level policymakers as well as prominent leaders from business, finance and politics about the world’s most pressing issues and priorities to the year to come.

Editor’s Note: This article was written by Stephanie Mikulich

Video transcription

– The big news, of course, came last week on the crypto front, when the SEC approved a series of Bitcoin spot ETFs. The custodian for many of these ETFs is Coinbase and Faryar Shirzad, Coinbase’s Chief Policy Officer, joins us here in Davos. Thank you very much for being here. We appreciate that.

FARYAR SHIRZAD: Oh. Thank you for inviting me.

– So let’s say diplomatically that the SEC has sometimes been at odds with the crypto world. Do these approvals mark a new chapter, a new type of rapprochement, or not?

FARYAR SHIRZAD: Well, ultimately the courts had to intervene. And they said pretty definitively that the denial of Grayscale’s application was arbitrary and capricious and an abuse of power. In reality, the agency didn’t have much flexibility other than approving applications.

But this is a big development. This does two things. First, it brings a whole new wave of investors into the crypto economy, which is really exciting.

And this symbolically indicates that the SEC has blessed an important crypto product. And I think both of those things are important.

– In light of this news, what type of questions are you receiving from world leaders here on the ground about crypto?

FARYAR SHIRZAD: Well, people are watching the developments. But the verdict on crypto has largely been delivered by the G20. Almost all G20 economies have adopted or are in the process of adopting a regulatory framework.

The story continues

So the EU, the United Kingdom, Australia, Brazil and Singapore. The global economy has grown. They are integrating cryptography into their economies and into their financial systems.

And in a way, the debate in the United States has made the United States less relevant in this debate. I think countries see an opportunity to lead in the next iteration of Web3 on the Internet. And they take advantage of it. And obviously, at Coinbase, we hope that the United States will catch up.

– I mean, along the same lines, you know, in Davos, some years, years past, when crypto was at a peak in its cycle, you had crypto stuff everywhere. Here crypto signaling, crypto companies.

Now there are fewer. But depending on your point of view, maybe it seems a little more settled. Where are we in this arc of institutionalization and adoption, of growth as it were?

FARYAR SHIRZAD: Yeah, I think that’s true. I think there are a lot more institutional players and traditional companies, financial and non-financial companies getting into crypto. It is therefore a less mysterious phenomenon.

The hype you saw a few years ago is less determinative of what the industry is. I think the verdict is that technology is definitely an improvement over the traditional financial system. And how that will be integrated is really the question for all of us.

Most central banks are therefore considering developing some sort of symbolic Fiat currency. Most economies are developing rules regarding the trading of cryptocurrencies. Many economies are integrating crypto as a payment mechanism.

And I think that’s the story of this Davos and the year to come. And I think it’s exciting, much more exciting than what we’ve seen in the past. So you mentioned that the United States was lagging behind in this area.

So will this continue to be an obstacle for the US crypto industry? Do you see any signs of progress in this area?

FARYAR SHIRZAD: Well, the crypto market in the United States is large, even with this uncertainty. The 52 million Americans owning cryptocurrencies represent a huge segment of the population. More people have crypto that own electric vehicles than have union cards. So this is a large portion of the American electorate.

And in Congress, you have bipartisan support for very constructive crypto legislation. So you’ve asked two committees to pass important legislation that is expected to be introduced probably in the first quarter. We expect this measure to pass the House.

So there are big, significant bipartisan efforts to provide regulatory clarity. And I think we will get there. Maybe it’s this year, maybe next, but it will happen.

– I had a Davos. I spoke with IMF Managing Director Kristalina Georgieva. And I think she was open in considering crypto as a good payment mechanism, but stopped short in saying that it should be considered like money. Do you think this should be considered money? And if not, do you think we’re getting there?

FARYAR SHIRZAD: There is no doubt about it. The ability to transfer value electronically as easily as sending a text message is already adopted by hundreds of millions of people around the world. And governments are now exploring it.

So, as policymakers become interested in crypto, the public also becomes interested in crypto. And they vote with their feet.

A large part of the world’s population owns cryptocurrencies. You have billions of dollars of stablecoin base settlement every year.

– But it’s not that easy, but most of the time, isn’t it? I mean, even though it’s supposed to be frictionless payment, I mean, most of the time it’s still not…

FARYAR SHIRZAD: Yeah.

– –if you’re trying to buy or trade, or God forbid, pay for something in Bitcoin, right?

FARYAR SHIRZAD: Yeah.

– I mean, when are we going to get there?

FARYAR SHIRZAD: Yes, so the technology is certainly an advancement. Scalability, speed and cost are the foundations of all this development activity you see. So we at Coinbase are launching the base, which is our own proprietary protocol.

This is actually a giant step forward when it comes to all three factors. And you see huge amounts of development activity on base as developers try to create new applications that solve this trilemma in terms of scalability, security and speed. Innovation thus catches up with demand and needs.

And it’s exciting to see. It will happen. It happens quickly. But we’re not there yet, but we will get there.

– Over the next six months, where will you spend most of your time?

FARYAR SHIRZAD: Well, from a political point of view, it’s difficult to focus on one particular area. The United States obviously plays an important role. Legislation will take a lot of energy.

And this will be one of our very important objectives. But we are very active in all jurisdictions that are currently involved in rulemaking. So the regulation of mica in the European Union goes through what is called the Level 2 technical standard process. This will take about a year. We are very focused on that.

The UK is developing an excellent framework around cryptocurrencies and stablecoins. We are working on it. Australia has just launched a consultation.

South Korea is engaged in a consultation. Brazilians chair the G20 in their own consultation process. There is therefore no shortage of areas we can work on. And we are committed to participating in all these debates.

– Looks like you’ll be earning a lot of airline miles in the coming year. Faryar Shirzad from Coinbase, thank you very much.

FARYAR SHIRZAD: Very good, thank you both. Thank you for inviting me.

Fuente