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Wednesday, April 28, 2021

Why Regulation Won't Harm Cryptocurrencies?

Though I imagine they could.

Why Regulation Won’t Harm Cryptocurrencies   From Knowledge @ Wharton,  Apr 27, 2021 


Wharton’s Brian Feinstein speaks with Wharton Business Daily on SiriusXM about the regulation of cryptocurrencies.

Audio Player

The confirmation on April 14 of Gary Gensler as chairman of the Securities and Exchange Commission has fueled worries that increased regulation of cryptocurrencies would hurt trading volumes and prices and stifle innovation in the nascent segment, and prompt industry participants to flee to less stringent jurisdictions. However, those fears are unfounded, and tighter regulation could purge the industry of bad actors and engender trust, which in turn would help it grow, according to Brian Feinstein and Kevin Werbach, Wharton professors of legal studies and business ethics.

The day of Gensler’s confirmation coincided with the $85 billion IPO of Coinbase, the largest cryptocurrency trading platform in the U.S. The Coinbase IPO was “a watershed moment for an industry that began a decade ago as an experiment in digital money,” according to The Wall Street Journal. Cryptocurrencies will be high on Gensler’s agenda. He had described them as “catalysts for change” in his confirmation hearings, but also said they raise “new issues of investor protection.” In the least, he promised that the SEC would provide “guidance and clarity” on regulating the cryptocurrency market.

“With the confirmation of a new SEC chair who has his eye on cryptocurrency, we can expect the imposition of securities law framework onto cryptocurrencies in the U.S. and new investor protection measures,” Feinstein said in an interview on the Wharton Business Daily radio show on SiriusXM. (Listen to the podcast above.)

A Wall Street Journal editorial titled “The SEC’s Cryptocurrency Confusion” echoed the concerns raised by critics who are worried about regulatory overreach, stating that “regulators are creating danger for currency developers and retail investors” in the cryptocurrency market, the size of which it estimated at $2 trillion in market capitalization.  .... " 

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