Washington Needs Smart Regulations - Article Review
As blockchain assets continue to integrate into the global economy, many countries have already developed laws and regulations on the national level. Some policymakers are concerned that overlooking the industry may put the financial system at risk, including Democratic Rep. Juan Vargas, who has gone on record as saying “Most of the people that I know that have invested in cryptocurrencies (have done so)…because they think they can get rich quick. We’ve seen this before, unfortunately, and it led to the financial crisis.”
He is correct that, as blockchain-based financial instruments become more widely adopted as an investment class, there is a greater risk of financial instability that could result from the unregulated use of such assets in U.S. financial markets. However, an adequate set of regulations compiled smartly could ensure both a high level of investor and consumer protection while ensuring market integrity and promoting innovation.
It is certainly worth leveraging the most beneficial regulations from other successful frameworks for the U.S. blockchain ecosystem. This would bring the industry in line with similar regulations legacy financial institutions have been subject to for decades without changing the inherent benefits of decentralized finance (also known as DeFi). A set of laws regulating digital assets would also bring greater stability to the U.S. economy while consumers would enjoy greater protection. This would help ensure that the government and U.S. citizens would get all the benefits that crypto and blockchain are offering.