The overwhelming majority of digital asset players want to be compliant and safe for consumers, said Caroline Malcolm, Vice President of Global Public Policy at Chainalysis. However, to do just that, they need clear regulatory guidelines that take into account the specifics of the underlying technology, and offer the certainty needed for further investment.
The U.S. is facing a growing threat of a ban by enforcement of cryptocurrency, which could put consumer safety at risk in the long-term. To protect American consumers and markets, a comprehensive regulatory framework is needed to provide clear regulatory guidelines and adequate guidance.
Chainalysis data shows that consumers continue to enter the market, and thus the importance of making progress on true regulatory and legislative reform. Such a framework should rest on three pillars: prudential regulatory requirements, market conduct regulation, and consumer protection safeguards.
Prudential regulatory requirements can help ensure that digital asset players are resilient to shocks, and can continue to meet their obligations to customers under stress. Market conduct regulation establishes standards around the behavior of market intermediaries and participants, in order to secure confidence and integrity in markets. Consumer protection safeguards are about ensuring that crypto users are treated fairly and that they understand the nature and risks of the activity in which they are engaging.
The longer the U.S. waits to do this work, the more progress other countries around the world will make, putting the country at a competitive disadvantage and putting consumer safety at risk in the long-term, said Malcolm.