Coinbase offers recommendations on the global crypto regulatory framework

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Leading US-based crypto exchange, Coinbase, is responding to the Financial Stability Board (FSB) regarding its proposed international regulation of crypto assets, which the regulator is expected to reveal in the coming months.

Authored by Coinbase Chief Policy Officer Faryar Shirzad, the exchange identifies several key areas that he believes should be considered in any global regulatory framework.

Coinbase names stablecoins as the foundation for a “new era of innovation in financial services.” However, Shirzad writes that Coinbase has some issues with the FSB’s perspective on stablecoins.

“We are, however, concerned about the extent of the FSBs’ use of the term ‘stablecoin arrangement’. As used in the Reports, this term encompasses a wide range of activities, many of which are well within outside the typical framework of financial market infrastructures, such as the validation of transactions on a blockchain network. We recommend that the FSB clearly exclude from the scope of a “stablecoin agreement” all validators, block builders, relays , pool operators and other blockchain technology infrastructure providers who have no involvement of any kind in a stablecoin agreement other than to support the blockchain network on which a stablecoin can operate.

Coinbase also covers the importance of decentralized finance (DeFi) and recommends that the FSB seek to promote innovation in the sector rather than attempt to stifle it completely.

“Governments and regulators have encouraged the early development of the internet, and they should also encourage base-layer DeFi innovation to thrive. DeFi developers only develop and release code; they do not directly facilitate financial transactions for customers or hold their assets, and we believe it would be inappropriate to regulate developers as if they were intermediaries in the crypto-asset market.

You can read Coinbase’s full response here.

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