For crypto’s “fault”, Coinbase is willing to talk to regulators

The US government’s increased actions against the crypto industry recently. On a Twitter mailcrypto exchange Coinbase addressed the Paxos-BUSD and Securities Exchange Commission (SEC) case and other important items regarding the regulatory landscape for the industry.

For investors, the recent enforcement actions by the SEC raised concerns in the crypto industry. These actions need clarity for future digital assets in the US jurisdiction for the various service exchanges to offer users.

After the New York Department of Financial Services (NYDFS) ordered the US-based Paxos blockchain infrastructure to stop issuing the US dollar-backed stablecoin BUSD, Coinbase stated that these assets are not securities. Bitcoinist reported that the crypto exchange would take the matter to court and fight for its stake products.

What is the role of Stablecoin in Crypto

Stablecoins are cryptocurrencies whose value is linked or linked to another commodity, currency or financial institution; in this case, most stablecoins are used as a medium of exchange, backed by the US dollar and designed to remain equal to the value of their bond.

Stablecoins are more valuable to crypto as a medium of exchange. These digital assets pursue price stability by maintaining reserve funds as collateral.

Coinbase states that for customers, stablecoins like USDC transcend banking hours and global borders, something centralized finance “must provide to investors.”

The use of crypto transfers has grown in recent years. According to Coinbase, nearly a quarter of US consumers reported using crypto. Coinbase says:

Stablecoins help bridge the gap from traditional finance to a more efficient and fair financial system. As more global cash is digitized, the US will have a huge advantage if the USD remains the most trusted and used global reserve currency for fiat-backed stablecoins.

For this reason, stablecoins continue to come under regulatory scrutiny, given the growth these digital assets have experienced in recent years, with over $136 billion in the crypto market at press time, according to data compiled by DeFillama.

Coinbase notes that stablecoins are already regulated. Paxos, which has been investigated by the SEC, is regulated as a trust company in New York by the NYDFS. USDC is regulated as a stored value instrument.

For Coinbase, getting this right means a “real dialogue” between regulators and the crypto industry that could lead to clear rules for the crypto space and paths for the various regulators themselves.

This can ensure the promise of greater financial accessibility and efficiency and allow more innovation and development for assets such as stablecoins that can offer solutions for many crypto users in the US Coinbase concludes:

Coinbase welcomes dialogue with regulators, policymakers and the public about the best way to regulate our industry, including stablecoins.

COIN stocks have reacted positively despite the adverse inflation data released on February 14th. COIN is trading at $64.25 on the Nasdaq, representing a gain of 5.5% over the past 24 hours, continuing its upward trend since the beginning of 2023.

Featured image from Unsplash, chart from Trading View.