- Charles Hoskinson told Congress he should set rules for cryptocurrency but leave enforcement to software developers.
- Hoskinson believes that regulations for the crypto industry should be better defined.
- Hoskinson believes that compliance should come from the industry itself, not from regulatory authorities.
Cardano co-founder Charles Hoskinson testified before US Congress about cryptocurrency regulation. He explained to the representatives why he thinks transparency is an important value in the industry.
The idea, as Hoskinson explains, is that crypto regulation should follow the banking self-regulation model. During a June 23 congressional hearing, he compared the ideal system of crypto regulation to that of banking self-regulation, telling lawmakers “it’s not the SEC or the CFTC that does KYC/AML; it’s banks. They are the ones on the front line. »
Hoskinson went on to say that similarly, “exchanges are going to be the ones doing KYC/AML” for cryptocurrency. He added that self-regulation would help ensure the industry “follows best practice” and is more efficient than a “group of different agencies” trying to regulate the space.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are two of the financial regulators vying for authority in the cryptocurrency space.
Hoskinson’s testimony comes as Congress considers how to approach regulation of the cryptocurrency industry. The hearings are part of an effort by lawmakers to understand the technology and its implications for investors, consumers and the financial system.
Hoskinson told the committee that because cryptocurrencies can store and transmit data, they could perform much of this regulatory function automatically. He also cited it as a reason for allowing the crypto industry to create self-regulatory organizations (SROs) like the private banking industry, which serves as a model for regulatory compliance.
According to June 23 testimony from Hoskinson posted on the IOHK website, he was interested in working with federal regulators to create new regulations. “Compliance with regulations and legislation coming from the United States must be a driving value for the blockchain industry.
Hoskinson’s calls for clearer boundaries in the crypto regulatory environment mirror those made by other industry figures in the United States. In December last year, SEC Commissioner Hester Peirce said a lack of regulatory clarity was responsible for the SEC’s continued rejection of spot Bitcoin ETFs from entering the US market. . Peirce said the Bank of New York Mellon’s (BNY Mellon) crypto plans make it more pressing for U.S. regulators to take action to gain more clarity.