Cardano co-founder Charles Hoskinson told Congress that he should set the rules for cryptocurrencies, but leave enforcement to software developers.
Hoskinson compared the ideal regulatory framework for cryptocurrencies to how banking self-regulation works during a session of Congress on June 23. hearingtelling lawmakers, “It’s not the SEC or the CFTC doing KYC-AML, it’s the banks.”
“This is a public-private partnership. What needs to be done is to set those limits, and then, as innovators, we can write the software to help make that happen.”
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are two financial regulators vying for jurisdiction in the crypto industry.
U.S. Congressional Hearing on Digital Asset Regulation Focused on Disclosure
Republican Representative Austin Scott of Georgia said that neither the SEC nor the CFTC have the resources to oversee the thousands of cryptocurrencies in the market, stating that “it’s impossible to regulate all of these currencies.”
Hoskinson responded that the ability of cryptocurrencies to store and transfer data means they can do most of this regulatory work automatically. He also used this as a justification for allowing the crypto industry to create self-regulatory organizations (SROs) to enforce regulatory compliance, as the private banking industry does.
Hoskinson suggested that the industry could create a “self-certification system” that could automatically monitor compliance until an anomaly is found, at which point it would be reviewed by a financial authority.
Illustrating again why labor should not be an issue for cryptocurrency regulation, Hoskinson hypothesized that even quadrupling the size of the Internal Revenue Service (IRS) would not be enough to test every American.
Instead, Hoskinson told Rep. Scott that cryptocurrencies could be programmed to prevent transactions from settling until legally binding checks were completed.
June 23 Hoskinson testimonial published via IOHK. Web site demonstrated that he is committed to working with federal regulators to develop new regulations, stating that compliance with regulations and legislation originating in the US “should be a guiding value for the blockchain industry.”
“However, this is a new technology and a radical new asset class that cannot easily fit into the framework of laws and tests created almost a century ago.”
Hoskinson’s calls for clearer boundaries in cryptocurrency regulation echo those of other industry insiders in the U.S. last December. SEC Commissioner Hester Pierce recently blamed in part the SEC’s lack of regulatory clarity for the SEC’s persistent denial of the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in the US.
Credit : cointelegraph.com