Fidelity Investments, Square, Coinbase, and Paradigm are establishing a cryptocurrency trade group. The Crypto Council for Innovation aims to shape the way bitcoin and other cryptocurrencies are regulated.
This could be a big step for cryptocurrency regulations. Among other things, the Council will lobby policymakers, as well as commission research projects. It hopes to serve as the nascent industry’s voice and champion digital currencies’ economic benefits and their underlying blockchain technology.
The council’s launch comes at a time when cryptocurrencies are starting to see some mainstream adoption. Fidelity is among several firms that recently filed with the SEC to offer a bitcoin ETF. Coinbase announced recently that the public offering of its shares would take place on April 14.
Advocates argue that blockchain technology has the potential to create jobs and extend financial services to consumers everywhere. However, policymakers are still wary of cryptocurrencies and could establish regulations that could stifle the industry’s growth.
Need for such a crypto council
This is precisely why these firms are establishing the crypto council now. “Crypto is at a mainstream inflection point,” said Fred Ehrsam, Coinbase’s former president and co-founder of Paradigm. He said:
“It’s in its very early stages and, much like the internet (once was), it’s very fragile while it’s in that stage.”
A handful of key policy decisions had a major influence on the significant development of the early internet. Ehrsam mentions those that legalized data encryption and resolved questions over sales taxes.
Other cryptocurrency advocates cited laws that postponed regulations to allow the nascent industry to develop. Specifically, the Communications Decency Act was ratified in the early days of the internet. It protected new tech companies and helped them compete with established competitors.
Ehrsam further explained:
“It’s challenging because policy makers want to balance risk and reward, and even people who spend time in this space would struggle to predict where this will go in the coming decade. (..) It was very hard to say where the internet was going to go.”
Earlier, Mark Cuban compared the current state of blockchain technologies to the early internet on The Defiant podcast. The billionaire established himself during the dot-com boom of the late 90’s/early 2000s. He said if he were starting a business now, it would center around blockchain technologies and cryptocurrencies.