Coinbase Urges Swift Crypto Regulation: U.S. Risks Falling Behind

Coinbase's Chief Policy Officer, Faryar Shirzad, has called on the U.S. Congress to take swift action on cryptocurrency regulation, emphasizing the urgent need for a balanced framework that fosters innovation while protecting investors. In a two-page statement, Shirzad highlighted the economic opportunities, financial inclusion, and innovation that blockchain technology and digital assets offer. However, without clear rules, developers face uncertainty, and consumers lack proper protection.

Shirzad warned that the United States risks losing its leadership in blockchain technology as companies seek friendlier regulatory environments abroad. He outlined several key priorities for legislation aimed at establishing a balanced regulatory framework for digital assets. These include clear definitions that differentiate between securities, commodities, and other types of tokens, granting the Commodity Futures Trading Commission oversight of the crypto spot market for major digital assets classified as commodities, and establishing definitive guidelines that allow blockchain projects to raise capital without categorizing every token as a security.

In terms of stablecoins, regulations should ensure transparency, full backing, and oversight that promote competition and innovation while preserving consumer confidence. Shirzad argued that effective legislation must be simple and accessible while integrating with existing financial regulations. Lawmakers should encourage innovation by providing clear pathways for developers to build decentralized systems without unnecessary restrictions. At the same time, centralized exchanges and custodians must be held to high transparency and security standards to protect consumers.

Shirzad stressed that consumer protection does not mean overregulation. Excessive restrictions could drive blockchain development offshore, weakening the U.S. economy and limiting consumer access to crypto markets. Instead, Shirzad calls for a framework that safeguards investors while allowing DeFi and other innovations to thrive. Without swift action, the United States will continue falling behind in the global blockchain race, with developers and businesses looking to other jurisdictions with clearer policies, and consumers remaining exposed to fraud and systemic failures.

Passing comprehensive cryptocurrency legislation, Shirzad argued, will protect consumers, encourage responsible innovation, and position the United States as a leader in the digital economy. By providing regulatory clarity, the U.S. can foster a thriving crypto industry that benefits both consumers and businesses, while maintaining its competitive edge in the global blockchain landscape.