The U.S. government hasn’t set fintech and blockchain regulations thus far. In the past four years, cryptocurrency traders have been operating in limbo when it comes to developing and advancing crypto products due to the absence of any regulatory framework.
Innovators in the blockchain and fintech industries have the vision and ability to build products that solve real problems for everyone from individuals to large banks and governments. However, these products are unable to grow and scale to their full potential without a clear path forward.
The Securities and Exchange Commission declared in 2019 that Bitcoin and Ethereum aren’t securities. After that, the industry’s been at a standstill. Blockchain innovation will stay limited to just two coins without clarity, but the industry is much larger than this. Unfortunately, a lack of regulation stifles the enormous potential that crypto and blockchain offer.
Why is it paramount for the U.S. to set clear regulations?
The Biden administration has an opportunity to develop clear policies and regulations, thus enabling fintechs, corporations, and banks to custody and use cryptocurrencies and as a result, improve efficiencies or provide a better customer experience.
It’s clear that the adoption of digital coins and blockchain is on the rise. Major companies, such as Square, PayPal, and Robinhood, are leaning into cryptocurrencies and trying to push them to the mainstream. Thanks to the validation from these brands, interest in digital coins’ utility and crypto’s ability to better serve both businesses and their customers are growing.
Furthermore, leading crypto companies such as Coinbase, Ripple, Chainalysis, Gemini, and DCG are currently based in the United States. Despite that, new entrepreneurs have to keep from innovating in the United States due to unclear regulations. Meanwhile, other countries move forward with defined regulatory frameworks. So, new entrepreneurs may forgo setting up shop in the U.S. favoring jurisdictions with clear rules.
On the other hand, there’s a big opportunity for the Biden administration. They can influence new policies and new legislation. If they provide clear guidance that will accelerate innovation in crypto and fintech for many generations to come.