Washington D.C. officials presented two futures to the American public in the past two weeks regarding digital assets. The first leads to American job growth and innovation. The other leads to a dead end in a town with only one road.

The U.S. Securities and Exchange Commission made it clear last week that crypto shouldn’t exist in America. The SEC’s decision to not issue a crypto-specific security framework is the only reasonable conclusion.


John Rizzo, senior vice president for public affairs at Clyde Group, is a member of the

The SEC, while legal professionals argue the current law is largely silenced on the classification crypto assets, has decided enforcement by regulation as an acceptable method to achieve its desired policy outcome.

Democrats and Republicans have made progress in a bill that would establish crypto market structure regulations. The “discussion-draft” legislation uses of a bipartisan act, the Jumpstart Our Business Startups Act (JOBS Act), to establish a way for token issues to raise funds for their offerings, while maintaining powerful investor protections.

U.S. Opinion

The draft will also allow companies to register appropriately with government agencies, as SEC Chairman Gary Gensler claimed was always possible. It also settles the debate over whether commodities or securities will be regulated by the federal securities regulator. (Gensler who said that all cryptos except bitcoin are securities, , used to believe most were commodities.).

The discussion draft released by the chairs of the Financial Services Committee, Patrick McHenry of NC and Glenn Thompson of PA are slightly left of an ideal Republican bill and slightly right of what the Democrats would prefer. It’s the perfect amount of compromise.

Imagine that Republicans and Democrats could move from a discussion draft to a law and then enact the legislation. The crypto market would then have a stabilizing clarity, which will encourage innovation and protect consumers while protecting investors.


It’s the perfect compromise

It’s good news for financial stability that the U.S. is catching up to the rest of world in terms of crypto asset regulation.

Even those who are skeptical about crypto assets should take pause when it comes to the SEC’s regulatory by enforcement spree. Crypto doesn’t disappear even if the SEC succeeds. Crypto just moves elsewhere, perhaps beyond the U.S. and its regulators.

It’s for this reason that lawmakers must make significant progress on a crypto-market structure bill.

The more crypto assets are removed from U.S. regulatory boundaries, the less the domestic regulators will be able to manage the risks associated with crypto assets.

Are you concerned about the fraudsters who fleece investors and the bank runs that threaten to destabilize our financial system? You’ll have a hard time getting someone to listen to your views if you call another country. Do you believe blockchain technology can benefit U.S. Society and do you want our innovators to be the leaders? Please try again. This innovation will happen in Dubai, Paris or Beijing.

The only rational path forward for our country is to end the crypto wars, and reach a regulatory framework that has been negotiated. There’s reason to think that rationality might not prevail.

Opinion

Chair Gensler, in a round of valedictory interviews last week following his enforcement action, may have made a classic gaffe. Gensler, who appeared to be exasperated in response to the interviewer’s query, said that the U.S. does not need any more digital currency. This is a remarkable admission by a chair of a “merit neutral” organization that doesn’t put a finger on the scales when it comes the wisdom of an investment.

No matter what Gensler says or does, it’s impossible to ignore the fact that trying to smother crypto in the U.S. is going kill the technology. Cryptography is a 21st-century technology that can’t be controlled or even extinguished.

U.S. policymakers have two options: either they can find a solution to making crypto and blockchain work in the U.S., or they can follow Gary Gensler down the fast track to nowhere.

Daniel Kuhn is the editor.