Coinbase CEO Elevates Crypto to a Matter of ‘National Security’
Brian Armstrong, co-founder and CEO of crypto exchange Coinbase, seems to think so, arguing that it needed to be considered in the same class as goods and infrastructure essential to the US economy.
The reason for his impassioned plea may have to do with the SEC’s recent crypto crackdown, including an investigation into whether Coinbase itself improperly allowed Americans to trade digital assets that should have been registered as securities.
“One of the strongest political arguments for cryptocurrency is that it is a national security issue,” he wrote on Twitter, in a potential attempt to once again draw attention to the legal gray area that crypto falls under.
Armstrong said the industry must not be allowed to go the way of microchips, whose bleeding-edge processors found in Apple devices are made exclusively in Asia, or for that matter fifth-generation mobile network equipment dominated by China’s Huawei, Sweden’s Ericsson or Finnish group Nokia.
“The US missed [out] on semiconductors and 5G, which are now largely produced offshore. It cannot afford to have cryptocurrency go offshore as well,” he wrote, adding that this was valid for all countries.
Clear rules
For years, Coinbase and others in the industry have begged the agency to offer clear rules for how securities laws apply to the crypto-kingdom. And for years, the SEC has refused to do so, instead pursuing an uneven approach known as “regulation by enforcement” that has forced companies to second-guess what the agency will do.
“Regulation by enforcement has a terrible chilling effect, and rhetoric is important,” Armstrong wrote. “We’ve already seen a huge amount of crypto talent, asset issuers and startups go offshore.”
The Coinbase boss may have a point as many countries will envy the chance to attract business away from Wall Street. The US dollar’s strength is not only a function of its role as a global reserve currency, but its deep financial markets that soak up excess capital from abroad.
London’s City, the only financial district to rival Manhattan, has also sought to guard against a large-scale exodus of money or talent, with the new government under British Prime Minister Liz Truss proposing to remove a cap on bank bonuses.
High-paying jobs in financial services are not the only attractive sector that not only proves to be crucial to economic productivity, but also helps to increase the government’s tax base. As the CEO of Coinbase pointed out, governments are waking up to the need for semiconductor manufacturing on land as well.
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