We in the industry might need to bite the bullet short-term and hope clearer policy can emerge from a calmer market.
Policy Head Takes Long-Term View
Jake Chervinsky, Head of Policy at Blockchain Association, outlined some silver linings he sees regarding regulation from a crypto market pullback. The Blockchain Association is one of the vital crypto lobbying groups in Washington DC, and both its membership and voice in DC have grown considerably in the last 18 months.
Let’s face it: the crypto prices have not been what we all wanted to begin 2022. In fact, it’s been down bad. But maybe there is a positive to a bearish start to the New Year? The ten-part thread from Chervinsky on January 9, sketches a United States regulatory portrait where “the short-term pain of a bear market could support long-term progress.”
The last 18 months in crypto have seen a considerable windfall to the users in the industry, while there is no denying the swell could appear like a bubble to outsiders. According to Chervinsky, this has left regulators and lawmakers in Washington weary of a repeat scenario from 2017. To regulators, the crypto industry is the “embodiment of 2022 irrationality,” Chervinsky writes.
“So from a regulatory perspective, it wouldn’t be the worst thing if the market cooled off for a while,” Chervinsky opines.
World leaders already have myriad problems to deal with on top of the growing climate crisis, covid instability, and more. However much we within the industry believe crypto to be a solution to many of these problems, tools we see as beneficial—like stablecoins and leverage—are a “big deal” to these regulators, says Chervinsky
“Regulators are definitely starting to see the genuine value & potential in crypto. But they have more important things to do in 2022 than figure out how to redefine the whole body of financial regulation for a decentralized ecosystem. This just isn’t top priority right now,” Chervinsky writes.
What if crypto had continued an accelerated expansion into 2022? Say if bitcoin hit $100k and Ethereum ran up to $10k, what do regulators do? Such an accelerated growth forces the hand on lawmakers, and this can lead to fast decision-making and when we see poor legislation like the brokerage clause in the 2021 Infrastructure bill.
With more big fish in the industry now than in 2017 and retail players set to make a shift in 2022, continued hasty regulation will not suffice. As the market grows and blockchain technology is recognized for its positive contributions, clearer regulation is needed.
Chervinsky concludes: “Ideally, we do that by a thoughtful process, not by rushed regulation or enforcement to pop a bubble.”
Source : bsc.news
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