During a recent Twitter Spaces discussion hosted by American law firm BakerHostetler, Cardano ($ADA) founder Charles Hoskinson talked about his frustration with the lack of regulatory clarity in the U.S.
Hoskinson, who is Co-Founder and CEO of Input Output Global (“IOG), the blockchain technology firm behind Cardano’s R&D, told Perianne Boring, who is the Founder and President of the Chamber of Digital Commerce, that the problem with the crypto bill (“Digital Commodities Consumer Protection Act”) proposed by U.S. senators Debbie Stabenow and John Boozman is that it does nothing for asset classification (i.e. make it easy to determine whether a particular cryptoasset is considered a commodity or a security for regulatory purposes):
“I just had a meeting with the CFTC Chairman and two of the CFTC commissioners a few weeks back. And he actually did mention the Stabenow bill, and I was surprised because it was the first time I’ve heard someone talk about it, and there’s actually a lot of buzz right now in D.C. about it. The word on the street is it seems to have better political prospects than potentially RFIA [ed: “Responsible Financial Innovation Act”] does.
“The issue is, as you just mentioned, is that while the bill does expand the scope of authority of the CFTC and give it more budget and certainly more powers, the issue is that the bill does nothing for asset classification…The issue is that we don’t know how to get over the fence and when you are and when you’re not and then facts and circumstances change. And US law doesn’t give you the ability to change with it.
“So, for example, Ethereum used to be a proof of work system, and there seems to be consensus among some of the commissioners that at that moment [ed: i.e. June 2018, when William Hinman gave his famous speech] Ethereum was not a security or at least didn’t have enough security-like properties so that no policy consideration could be satisfied by pursuing, but that now, it’s a proof of stake system and facts and circumstances of its operation are different and then perhaps now it is a security. Who knows?
“You know, they’re not going to actually take an official position one way or the other. And so we need some form of guidance from lawmakers about how we’re going to decide this one way or the other. This has been a core deficiency in all proposed legislation outside of some bills that were proposed much earlier, like the The Token Taxonomy Act or other things, but those don’t have any political prospects behind them.
“So, it’s frustrating for me because I just want to know what the standards are and how to adhere to them and what to do and if those are sustainable standards and the issue’s I’m still living in a regulation by enforcement environment and a ‘rust us’ environment when we have radical differences in policy every two to four years due to political changes.“
On October 13, Hoskinson explained the importance of having regulation that appreciates the benefits offered by cryptocurrencies.
According to a report by The Daily Hodl, the IOG CEO said:
“It’s necessary for us to get [to] the next level. As many of you know, we want Cardano and cryptocurrencies in general to become the financial operating systems of the world. And my big passion in life has always been banking the unbanked and giving the unbanked economic identity that they control, that’s self-sovereign and ultimately global in nature, and ensuring human rights, the freedom of association, commerce and expression.
“To accomplish that there needs to be a regulatory regime that acknowledges the existence of cryptocurrencies, views them as positive things and appreciates the liberty that they provide people.“
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