The regulation of digital currencies should be coordinated by the major global economies according to Jeremy Allaire.
Speaking in an interview with Reuters, Allaire who is the CEO of Circle, a $3 billion company backed by Goldman Sachs said that this has become essential to prevent the entropic discordant tunes emanating from the industry.
Allaire stated that it is rather curious that a novel industry that is blossoming would operate at the grey area of the law unsupervised. According to him, the risk posed to investors cannot be quantified.
He emphasized that billions of dollars left unprotected is a recipe for calamity and recommended that the G-20 countries should spearhead the drive to regulate the crypto industry.
“Ultimately there needs to be normalization at the G20 level of critical crypto-related regulatory matters,”
The Circle CEO spoke at a time that it has become clear that regulators are no longer keeping up with the rate of innovation in the sector. This realization has made many agencies seem bereft of ideas on how to approach most issues regarding the industry.
At times, there have been policies that border on desperation, effectively throwing away the bath water with the baby as recently seen in India where the Reserve Bank has moved to end all cryptocurrency-related transactions with the country’s banks.
He also made reference to the fact that the Securities and Exchange Commission is still being guided by a 72 year old law which has not given the agency the liberty to adjudge the industry in proper light.
Speaking of the need for reviews of relevant existing laws, Allaire said that the classification of most initial coin offering tokens as securities stems from the absence of guiding laws for regulators.
Despite the slow pace of regulatory appropriation, progress has been made in some areas. CCN reported that,
“The Paris-based Financial Action Task Force (FATF) last Friday announced that it would introduce the first set of rules for crypto criminals by mid-2019. The global AML watchdog stressed that jurisdictions worldwide would have to license or regulate crypto exchanges to curb money laundering and terrorist financing.”
Although it falls below expectations of a globally synergized action on the industry, it is still a positive step that would bring a level of confidence to the industry, knowing that action is being taken to ensure that there are no conflicts with regulatory policies of governments.
Allaire said that he is in support of the agency’s move stating that it may be classified as first steps in harmonization of the differences and gaps existing in efforts. He also said that the task force should come up with a policy on initial coin offering, which is an area that has conflicted with many authorities due to its seeming diverging objectives with national monetary policies.
“When it comes to token offerings, how should they be treated? Which token offerings are securities, which are not?”
“The trading venues – are they like spot commodity markets that need to have rules in place around market manipulation?”
With the bear cryptocurrency market quieting things, this may be the right time for legislators to act as seen from the recent call from South Korean Legislator Min Byung-Doo.