On Monday, the CEO of Coinbase exchange shared what he says is a “realistic blueprint” for crypto regulation and urged crypto companies, including policymakers and regulators, to pursue it “instead of waiting to get something comprehensive and perfect.”

Centralised Crypto Companies Should be Regulated First, Says Coinbase’s CEO

Armstrong said centralized entities like stablecoin issuers, exchanges, and custodians constitute the most risk to consumers, as seen over recent years. Hence, regulators must focus more on creating regulatory clarity for centralised crypto companies rather than their decentralised counterparts or DeFi in general.

Among other things, Coinbase’s CEO said a reasonable stablecoin law should require issuers to register as a state trust or OCC national trust charter and undergo thorough reserve audits on a yearly basis. Armstrong urged regulators to establish a federal license that permits such companies to serve customers nationwide, including mandating AML and KYC laws for exchanges and custodians.

“In places like the U.S., it’s fine to preserve the option for states to issue their own licenses as well, but there should be a federal option that allows the US to be a single market,” Armstrong said.

Crypto May Need Congress to Enforce Regulatory Clarity

Coinbase’s CEO also explained that the cryptocurrency industry needs clarity from the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on which digital currency qualifies as a commodity or security.

Given both regulators have scuffled for jurisdiction over cryptocurrency in recent years, Armstrong says US Congress may have to step in and pass legislation on the matter.

“Congress should also require the CFTC and SEC to clearly publish their categorisation of the top 100 crypto assets by market cap within 90 days of the above legislation being enacted, declaring whether each asset is a commodity, security, or “other” (such as a stablecoin),” Coinbase’s CEO added.

(By Ibiam Wayas)