Cryptocurrencies are a novel form of financial transaction that is new for even the top experts in the industry. Therefore, many technical experts have claimed that the government can’t monitor and regulate digital assets with the set of skills and legislative bodies that are designed for stocks and commodities. Charles Hoskinson, the CEO of IOG, seems to agree with the idea, and he shared his thoughts with journalists in a recent interview.
The statement from the Thinking Crypto podcast indicates some interesting ideas that Hoskinson holds regarding cryptocurrency regulations. He claimed that the US government needs to review the existing financial regulatory instruments and tools at their disposal. He further added that there is a requirement for moving from a definitional system to a functional system for digital asset regulation.
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Reflecting on the matter of cryptocurrency regulations, Hoskinson claimed that the current regulatory tools that are available to the government are outdated and they are not sufficient for sizing up the digital asset market. He further added that current regulators are looking to classify the different types of cryptocurrencies through the laws that are made for stocks and trade commodities.
He explained that there is no real legal definition for ascertaining if a digital asset is a security or a commodity within the current regulatory framework. Hoskinson pointed out that the regulatory agencies are specialized and operate without transparent sharing of information. He presented the example of CFTC that is dedicated to the matters of regulating commodities, and the SEC that only has authority over securities and stock trading.
Charles Hoskinson’s New Crypto Regulatory Proposal
Hoskinson pointed out during the interview that current regulating agencies like SEC and CFTC depend on their intermediaries for reporting any illegal activity. He further claimed that the IRS is unable to detect any issues with a financial transaction channel unless a bank or any other financial intermediary reports it first.
He, therefore, concluded that the government needs to upgrade and look for a regulatory protocol development that can be added to the blockchain transactions directly. Therefore, it will remove the need for middlemen, and the state will be able to conduct direct surveillance on the digital transactions. However, some cryptocurrency experts claim that such an idea goes against the autonomy and decentralization ideology that the blockchain is founded on.