US lawmakers need help with crypto regulation: Circle CEO

Circle CEO believes that the United States regulators need to collaborate with industry experts to roll out and implement regulations guiding the cryptocurrency sector

US regulators will need help from industry experts to roll out and implement regulations guiding the cryptocurrency space effectively. These are the thoughts of Jeremy Allaire, CEO and co-founder of peer-to-peer payments firm Circle.

Allaire made his opinion known in an official letter sent to senior staff of the US Department of the Treasury yesterday. In this letter, Allaire asked the regulators to work with the industry in adopting cryptocurrency regulations that would lead to the growth and development of the emerging market.

He warned the regulators that some of the proposed rules pose direct risks to the United States’ competitiveness. If adopted, these rules could result in some unintended consequences around crypto and blockchain-related use cases in the country. This was in reference to a proposed rule to stop non hosted or self-hosted wallets.

According to the Circle chief executive, the proposal doesn’t address the cryptocurrency space’s actual risks. He stated that if the proposals don’t address the sector’s actual risks, they would significantly harm industry and American competitiveness. Thus, resulting in the United States giving up economic and industry advantage to Chinese firms. Overall, the rules would affect the use of blockchain and cryptocurrencies in the country.

Cryptocurrency regulation continues to be a wild card in several countries globally as the market doesn’t conform to the existing financial structures. Most countries are taking the time to understand this emerging market before rolling out regulations that would curb fraud without restricting growth and innovation.

Allaire argued that the cryptocurrency industry needs a year or two to develop technologies that would ensure best practices in the sector. He added that this would give the regulators time to collaborate with the industry experts to build the rule sets and supervisory schemes in line with the emerging market.

The Circle executive isn’t the only one strongly opposing the proposed ban on self-hosted wallets. Representatives Warren Davidson and Tom Emmer both opposed the US Treasury’s move as they believe it would hinder meaningful participation in the technological innovation currently going on throughout the global financial system.

The US is behind other leading countries in terms of cryptocurrencies. However, regulators have to put guidelines that would protect investors and citizens while promoting innovation in the new industry.