“Digital assets and decentralized financial technology have grown beyond the sandbox,” said Rostin Benham, chairman of the Commodity Futures Trading Commission.
This is an interesting comment, considering they’re not really doing anything, at least at the federal level. He had said the same thing in his February.
In a Brookings Institution webcast on cryptocurrency regulation on Monday (July 25), Venham told the policy think tank that the regulator LabCFTC has been upgraded into a full technology innovation office, with a director reporting directly to him. said.
But LabCFTC was more like a sandbox that the federal government had. There, innovators in the cryptocurrency and blockchain industry will have more freedom to experiment with financial products, test them in the wild, and test them in a larger environment of regulators who can learn more and provide advice. can do. It doesn’t just threaten enforcement.
While many states have FinTech sandboxes, the Securities and Exchange Commission (SEC), which has long declared itself the main cryptocurrency regulator in the United States, has said that virtually all digital assets are securities. SEC Commissioner Hester Peirce, known in the industry as “CryptoMom” for his early support, has long called on authorities to create a formal crypto sandbox. .
In this regard, it lags far behind both the UK and the EU, both of which have crypto sandboxes. In the UK, the Treasury Department announced in June his plans for a sandbox focused on blockchain’s underlying distributed ledger technology (DLT). This is in addition to the Financial Conduct Authority (FCA), which has worked with over a dozen cryptocurrency companies over the last year.
See: UK Government Pushes Crypto Sandbox, Stablecoin Regulation
The EU was the first to announce plans for a cryptocurrency and blockchain sandbox in 2020.
safe harbor
In February 2020, Perth proposed a three-year “safe harbor” for new cryptocurrencies to develop to the point where they were definitely not securities. This means that its value lies in trading utility rather than speculation. This applies to Bitcoin.
See: Weekly Crypto Regulations: Congress May Challenge Controls, SEC Seeks in Ripple Lawsuit
Peirce updated it with the Token Safe Harbor Proposal Proposal 2.0 last April and added a few addenda. This includes adding exit reports for companies that have issued cryptocurrency tokens, providing guidance on whether it is a security and how to make it well. Decentralized and non-secure.
Read more: SEC Considers Cryptocurrency and Security Conundrums
That said, Perth has long been wary of sandboxes, and by bringing together innovators and regulators, “regulators grabbed shovels and buckets,” part of the disruption projects developers are trying to accomplish. said they were afraid of suppressing
Advance
At the same time, the idea of crypto sandboxes is gaining momentum both in the United States and abroad.
Last October, Rep. Patrick McHenry (R-N.C.), a minority member of the House Financial Services Committee, proposed a Digital Token Clarification Act.
The bill will provide the legal certainty needed when digital asset projects are launched, McHenry said. This will enable “entrepreneurs looking to build decentralized networks where tokens act as a medium of exchange or provide access to network functionality to pass tokens into the hands of other people.”
This is the basic point of sandboxes, giving cryptocurrency developers a way to build blockchains, issue tokens, and start projects aimed at disrupting traditional finance.
A prime example is the cross-border payment company Ripple, which the SEC has accused of illegally selling unregistered securities (XRP tokens) since 2013.
Also Read: Weekly Crypto Regulation: Congress May Challenge Controls, SEC Seeks in Ripple Lawsuit
Another is the $100 million settlement that a group of government agencies and state securities regulators pulled from crypto lender BlockFi, effectively how the SEC announced it had problems with its business model. However, he threatened to sue Coinbase if they launched a similar program earlier than planned, but he angered Coinbase by refusing to explain the reasons behind the threat.
READ MORE: SEC Campaign Against Crypto Lending Expands Beyond Coinbase
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New PYMNTS Survey Finds 3 in 4 Consumers Have Strong Demand for Super Apps
about: A new PYMNTS study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” in collaboration with PayPal, collected responses from 9,904 consumers across Australia, Germany, the UK and the US. Analyzed. It also showed a strong demand for a single multifunctional super app instead of having dozens of separate apps.
