Developers, investors and regulators can establish best practices and raise the quality of cryptocurrency development by working together.
Regulators are tasked with balancing between protecting consumers and creating environments where entrepreneurs and the private sector can thrive. When markets face distortions, perhaps due to an externality or information asymmetry, regulation can play an important role.
But regulation can also stifle entrepreneurship and business formation, leaving society and its people worse off. The United States Securities and Exchange Commission has been particularly hostile against cryptocurrency companies and entrepreneurs. For example, SEC Chairman Gary Gensler has remarked that he views Bitcoin (BTC) as a commodity but that many other “crypto financial assets have the key attributes of a security.”
He reiterated the line in an explosive Aug. 19 op-ed penned for The Wall Street Journal, arguing that “you could replace ‘crypto’ with any other asset” when talking about the regulation of securities.
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Christos A. Makridis is an adjunct scholar at the Manhattan Institute. He is also a research professor at Arizona State University and the chief technology officer and head of research of Living Opera, an arts and education technology startup.
This piece originally appeared in Cointelegraph