{"id":337513,"date":"2021-09-10T19:14:00","date_gmt":"2021-09-10T16:14:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/slow-to-start-crypto-regulators-lagging-behind-blockchain-industry\/"},"modified":"2021-09-10T19:14:00","modified_gmt":"2021-09-10T16:14:00","slug":"slow-to-start-crypto-regulators-lagging-behind-blockchain-industry","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/slow-to-start-crypto-regulators-lagging-behind-blockchain-industry\/","title":{"rendered":"# Slow to start: Crypto regulators lagging behind blockchain industry"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a284c8d0736a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a284c8d0736a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/slow-to-start-crypto-regulators-lagging-behind-blockchain-industry\/#A_growing_realization\" >A growing realization<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/slow-to-start-crypto-regulators-lagging-behind-blockchain-industry\/#US_and_Europe_Different_concerns\" >U.S. and Europe: Different concerns?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/slow-to-start-crypto-regulators-lagging-behind-blockchain-industry\/#Is_harmonization_really_needed\" >Is harmonization really needed?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Slow to start: Crypto regulators lagging behind blockchain industry  <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvNTk4ZmM4MzgtMmEyZi00MTQ1LWEyZjUtOGM4N2Q3M2U4MmNiLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>As if he didn\u2019t have enough to do, Gary Gensler <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>eared before the European Parliament on Sept. 1 to share his policy <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/news\/speech\/gensler-remarks-european-parliament-090121\">recommendations<\/a> regarding the regulation of crypto assets and other matters. While the United States Securities and Exchange Commission Chair made clear that he was presenting his own views \u2014 not those of the Commission \u2014 his (virtual) appearance necessarily raised questions.<\/p>\n<p>Does Gensler, regarded by some as America\u2019s most crypto-savvy regulator, believe that cryptocurrency and blockchain policy has to be harmonized globally? If so, can he make common cause with the Europeans \u2014 or do the U.S. and the European Union have different priorities? More <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly, are globally harmonized regulations even feasible, particularly in areas such as decentralized finance?<\/p>\n<p>The questions didn\u2019t end when the New York Times made cryptocurrency the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/2021\/09\/05\/us\/politics\/cryptocurrency-banking-regulation.html\" data-amp=\"https:\/\/www-nytimes-com.cdn.ampproject.org\/c\/s\/www.nytimes.com\/2021\/09\/05\/us\/politics\/cryptocurrency-banking-regulation.amp.html\">lead story<\/a> in its Sunday, Sept. 5 edition, observing that \u201cthe boom in companies offering cryptocurrency loans and high-yield deposit accounts is disrupting the banking industry and leaving regulators scrambling to catch up.\u201d<\/p>\n<p>It all begs the question: <em>Wherefore the regulators<\/em>?<\/p>\n<p>\u201cI think it is very telling to have the SEC chief over in the EU Parliament in the midst of the recent surge in cryptos,\u201d Pablo Agnese, lecturer in the department of economy and business organization at the Universitat Internacional de Catalunya Barcelona, told Cointelegraph, adding, \u201cNot only are they [i.e., regulators] playing a catch-up <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>, they are also trying to reach a political consensus, at least in the U.S.\u2013EU relationship.\u201d<\/p>\n<p>Patrick Hansen, until recently head of blockchain at Bitkom \u2014 an association of German companies in the digital economy \u2014 opined that Gensler is undoubtedly aware of how decentralized and global the crypto community is, telling Cointelegraph, \u201cWith DeFi projects coming primarily out of the U.S. and Europe, he probably wants to ensure that both regions align on these issues in order to prevent regulatory arbitrage.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_growing_realization\"><\/span>A growing realization<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cI\u2019m not convinced that the recent high-profile meetings between U.S. regulators and their European counterparts represent a policy shift,\u201d Geoffrey Goodell, a research associate at University College London and deputy executive director of the UCL Centre for Blockchain Technologies, told Cointelegraph. He added:<\/p>\n<blockquote><p>\u201cThere is a growing realization on both sides of the Atlantic that digital currencies are here to stay and could potentially introduce systemic risk, not only to investors searching for new sources of uncorrelated returns but also to monetary sovereignty.\u201d<\/p><\/blockquote>\n<p>In his remarks before the EU parliament\u2019s Committee on Economic and Monetary Affairs, Gensler noted that \u201cthis $2.1-trillion asset class is truly global. It has no borders or boundaries. It operates 24 hours a day, seven days a week.\u201d <\/p>\n<p>While affirming that he was \u201c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>-neutral,\u201d Gensler emphasized that \u201cI am anything but public policy-neutral.\u201d A sound public policy entails protecting consumers, curtailing illicit activity, and ensuring financial stability, he said, adding, \u201cFor those who want to encourage innovations in crypto, I\u2019d like to note that financial innovations throughout history don\u2019t long thrive outside of public policy frameworks.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"US_and_Europe_Different_concerns\"><\/span>U.S. and Europe: Different concerns?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Still, crypto regulatory harmonization requires some agreement around the goals. Do European policymakers have different priorities from Americans? For example, Europeans might be more worried about the environmental harm caused by Bitcoin (BTC) mining while U.S. policymakers could be more focused on whether stablecoins are truly stable.<\/p>\n<p>\u201cEnvironmental damage is definitely a bigger concern in the EU, especially the EU Parliament,\u201d where some political groups like the Greens want to ban proof-of-work consensus protocols, noted Hansen. As for stablecoins, most are denominated in U.S. dollars, so this is understandably an American preoccupation, he added, but they could become a concern for the EU if all decentralized finance (DeFi) activity becomes USD denominated.<\/p>\n<p>Agnese sees the environmental issue as a bit of a red herring \u2014 possibly even a way to denigrate the technology by its detractors \u2014 and he referenced a May 2021 Galaxy Digital report that claims the Bitcoin network uses less than half the energy employed by both the banking system and the gold industry, \u201carguably the two closest competitors if we think of cryptos as a potential <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a> of exchange,\u201d he told Cointelegraph. <\/p>\n<p>Surely, though, U.S. and European policymakers share mutual interests with regard to crypto, like ensuring Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures are universally adhered to. \u201cThe most important short-term common ground has to be the regulatory standards for centralized crypto custodians, exchanges, brokers, etc. on the matters of KYC, AML, taxation and consumer protection,\u201d said Hansen. <\/p>\n<p>Stablecoins are also a valid area of common concern in Agnese\u2019s view, \u201cas many such cryptos, which are pegged to major currencies like the USD, have not been audited or, when they have, they have left many questions still unanswered.\u201d<\/p>\n<p>In his Sept. 1 remarks, Gensler noted that \u201cnearly three-quarters of trading on all crypto trading platforms occurred between a stablecoin and some other token\u201d in July, and he suggested that stablecoins could be facilitating those seeking to sidestep financial regulations, including AML and sanctions rules. \u201cEuropean regulators are certainly aware of the counterparty risk intrinsic to stablecoins,\u201d noted Goodell, adding: <\/p>\n<blockquote><p>\u201cWhen a private-sector stablecoin issuer fails to fulfill its promise to maintain a peg, would the European Central Bank bail out holders of stablecoins? If the answer is definitely yes, then the issuer is effectively doing the central bank\u2019s job by creating a central bank digital currency on its behalf. If the answer is possibly no, then the stablecoin isn\u2019t so stable and should trade at a discount.\u201d<\/p><\/blockquote>\n<p>Goodell disputed the notion, however, that U.S. regulators are necessarily late to the game with regard to crypto assets. \u201cI think the full story is more nuanced,\u201d he told Cointelegraph, explaining that the largest digital asset exchanges settle their trades in U.S. dollars, while the largest stablecoins are pegged in USD, too, \u201cso arguably, the threat posed by cryptocurrencies to monetary sovereignty is less acute in the U.S. than in other countries.\u201d <\/p>\n<p>In addition, many large U.S. financial institutions have a stake in the crypto space \u2014 i.e., \u201care stakeholders in infrastructure and services that underpin digital assets \u2014 and regulators might prefer to be patient rather than upset the delicate balance,\u201d he added.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_harmonization_really_needed\"><\/span>Is harmonization really needed?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the end, is a globally harmonized crypto regulatory structure even necessary? Agnese urged a hands-off approach with regard to crypto regulation \u2014 allowing the technology to evolve and show what it can do \u2014 adding:<\/p>\n<blockquote><p>\u201cMoney laundering, the environment, and a lack of serious auditing efforts are not unique to the blockchain ecosystem. It would be a pity to see a concerted overreaction by major governments that would stifle innovation and hamper the growth of this sector and thus deprive society at large of all the benefits to come.\u201d <\/p><\/blockquote>\n<p>But the powers that be may not be so patient. As the New York Times reported, \u201cTop officials from the Federal Reserve and other banking regulators have urgently begun what they are calling a \u2018<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.occ.gov\/news-issuances\/congressional-testimony\/2021\/ct-occ-2021-79-written.pdf#page=13\">crypto sprint<\/a>\u2019 to try to catch up with the rapid changes and figure out how to curb the potential dangers from an emerging industry whose short history has been marked as much by high-stakes speculation as by technological advances.\u201d <\/p>\n<p><strong><em>Related:\u00a0Project Giant: Nigeria\u2019s CBDC set for pilot rollout on Independence Day<\/em><\/strong><em><\/em><\/p>\n<p>Goodell, for his part, was skeptical about a global crypto regulatory regime absent central bank digital currencies. \u201cGlobally harmonized regulations on digital assets will be difficult if not impossible,\u201d he said, but with the right approach to a government-issued digital currency, \u201cwe can mitigate the systemic risk associated with digital assets and might avoid the requirement for global consensus.\u201d<\/p>\n<p>Meanwhile, Hansen told Cointelegraph that \u201cignoring a $2-trillion-plus market that has existed for over a decade is no longer an option. Regulatory frameworks for centralized crypto companies \u2014 exchanges, lenders, etc. \u2014 are just around the corner,\u201d though actions regarding DeFi and perhaps some other issues \u201care way more complex and will require more discussions and time.\u201d<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/slow-to-start-crypto-regulators-lagging-behind-blockchain-industry\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Slow to start: Crypto regulators lagging behind blockchain industry &#8221; As if he didn\u2019t have enough to do, Gary Gensler appeared before the European Parliament on Sept. 1 to share his policy recommendations regarding the regulation of crypto assets and other matters. While the United States Securities and Exchange Commission Chair made clear that&#8230;<\/p>\n","protected":false},"author":1,"featured_media":337514,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvNTk4ZmM4MzgtMmEyZi00MTQ1LWEyZjUtOGM4N2Q3M2U4MmNiLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74894,28340,72705,70934,67874],"class_list":["post-337513","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-blockchain","tag-europe","tag-european-union","tag-regulation","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/337513","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=337513"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/337513\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/337514"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=337513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=337513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=337513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}